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(Adds details on debt restructuring, Treasury comments, analyst comments)
By Janet Guttsman
NEW ORLEANS, March 28 (Reuters) - After months of negotiations and delays Ecuador has finally met the conditions to win a loan from the International Monetary Fund and payments should start next month, finance officials said on Tuesday.
Claudio Loser, the head of the IMF department dealing with Latin America, told a news conference that the IMF's board should meet to discuss a $300 million loan for Ecuador sometime before April 19.
``Ecuador has made tremendous progress in putting together a package of structural reform,'' Loser said. ``It deserves and will get support from the international financial community.''
The Inter-American Development Bank, hosting its annual meeting in New Orleans, said Ecuador would receive $78 million next week from previously approved loans. The bank plans to disburse $300 million to the cash-strapped country this year, IADB President Enrique Iglesias said.
Ecuador, mired in its deepest recession for decades, first asked the IMF for help almost a year ago. But negotiations were repeatedly bogged down in disputes about the reforms needed before the IMF could approve a loan.
Talks moved into a higher gear after Ecuador, which had already defaulted on some debt, announced plans to introduce the dollar and accompanied those plans with more serious and comprehensive reform efforts.
``Ecuador's ambitious economic program represents an important step toward restoring stability and laying the foundation for renewed growth, although Ecuador faces immense challenges that will require full and sustained implementation (of the reforms),'' a U.S. Treasury spokesman said.
He said the United States would back Ecuador's IMF loan and would also support the Latin American country as it moved to reschedule debts to the Paris Club of official creditors.
Finance Minister Jorge Guzman said he was confident that these reforms would continue. ``We are talking about concrete and specific actions to restore confidence in the whole country,'' he said. ``We are here to try to recover all the time that our country has lost in the past year.''
AMBITIOUS PLANS
He described economic stability as Ecuador's main priority and said the dollarization plans would bring lower interest rates, longer term credit and lower inflation. ``The support of the multilateral lending organizations will open the doors to the world that were closed to our country,'' he said.
Analysts said they were impressed by the coherence and clarity of the program put forward by Guzman and the rest of Ecuador's new economic team.
But Arturo Porzecanski, chief economist for the Americas at ING-Barings, said the ambitious reform program would not in itself guarantee Ecuador's success.
The government would have its work cut out to win support for its plans to raise energy prices, prevent money fleeing the country as bank deposits were unfrozen and sell off the firms slated for privatization this year, he said.
``Washington is expressing a major vote of confidence in Ecuador, but the implementation of the measures that have been approved will be very tough,'' he said.
Ecuadorean debt was not yet ``a buy'', he said.
The IMF, the World Bank and the Inter-American Development Bank promised earlier this month to provide Ecuador with $2 billion in loans over the next three years to back the Andean country's economic reform program.
Loser said the IMF's support was based on the reform program itself, rather than on the dollarization plans, and he forecast flat output for Ecuador in 2000 after what he said was an 8 percent slump in gross domestic product in 1999.
Other IMF officials said economic output would be flat this year, and a weak first half would be followed by a stronger second half.
Ecuador last September won the dubious distinction of being the first country to default on Brady bonds, which were set up to resolve a previous Latin American debt crisis, and Guzman said he expected talks with bank and country creditors to start at the end of next month.
The key issue to resolve was how much money Ecuador could afford to pay, he said. ``We are consolidating our economic program more and more, and we are confident that we are going to succeed,'' he said.
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