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Ecuador: Sovereignty Takes One Step Backwards

Ecuador: Sovereignty Takes One Step Backwards

by Toni Solo

Just as the long-standing political crisis in Bolivia hangs fire pending future elections, so too in Ecuador people await some serious attempt at a new political settlement. In both countries the fundamental cause of unrest is widespread popular rejection of "free market" economic policies that have resulted in deepening poverty for the majority. Former President Lucio Gutierrez was ousted in April by a combination of the urban middle classes and disillusioned indigenous rural people. In all the Andean countries, continuing political crisis stems from the refusal of entrenched traditional political classes to reject foreign influence and work for their peoples.

These internal Andean conflicts embody the wider drama of declining US power throughout Latin America. It may be true that as the United States government loses influence in one place it seizes it back elsewhere, as it has done recently with the immunity it won for its military personnel in Paraguay. But the trend is clear. Unless the US and its local allies implement repression across the continent at the levels prevalent in Haiti and Colombia, it is surely only a matter of time before Latin American countries finally realise the liberation so long postponed since the days of Simon Bolivar and Toussaint Louverture.

The predictability of US government reaction to developing change in Latin America is almost comical. They seem to think no one remembers the long, despicable record of US intervention and all its tawdry, disreputable and downright criminal techniques. The story is always the same, "do what we want, or else..." The formula has not varied since the days of Thucydides and before. US imperialism is as banal, dishonest, cruel, mean and dirty as every other variety. Anyone who gets in its way had better be well prepared.

Rafael Correa - managing the economy for the majority

Outright US bullying is ably assisted by direct, crude intervention by the international financial institutions, the International Monetary Fund and the World Bank. Among the latest victims of US and World Bank gangsterism is Rafael Correa, the Finance Minister of the government led by Alfredo Palacio that took over from Lucio Gutierrez. Correa, from the minute he assumed his portfolio, staked out ground for the Ecuadoran people, advocating policies to reduce poverty and enhance Ecuadoran economic sovereignty. The litmus test for his sincerity was to demand a revision of the negotiations of the bilateral "free trade" treaty with the United States begun under the previous Gutierrez regime.

From the minute he made that clear, it is likely Correa's days as a government minister were numbered. He certainly became a target for machinations from the US State Department and Southern Command and from the international financial institutions. It's important to realise that the US military's Southern Command has assumed many of the diplomatic functions formerly the preserve of the State Department. Ecuador was a consistently high priority for former SouthCom chief, General James T. Hill. [1]

Just before his forced resignation Correa was the only one of Palacio's ministers who enjoyed much credibility. Alfredo Palacio's own popularity had fallen by nearly 40% in July this year to 38%, according to one poll. In contrast, around 57% of people in the same poll trusted Correa. His relative popularity may also have contributed to Correa's demise. But various other factors pointed towards his early exit from ministerial duties.

Inside the Palacio governmnet, it seems pretty clear that some ministers favour submission to the United States while others favour the assertion of Ecuadoran sovereignty and solidarity with Venezuela. One area where this is very obvious is in relation to the Colombian civil war. Palacio is under heavy US pressure to cooperate with Colombia's narco-President Alvaro Uribe. But politicians like Correa and Foreign Minister Antonio Parra as well as many generals in the Ecuadoran armed forces have bolstered Palacio's refusal to cave in to US and Colombian demands.

Other ministers have stayed out of these kinds of foreign policy conflicts while arguing forcefully against Correa's economic policies. They want to go ahead with a free trade treaty with the United States. They want to continue corporate-friendly neo-liberal economic policies favoured by the IMF and the World Bank. Domestically, that means tightening the screws on the poor majority, abandoning food sovereignty, wrecking domestic agricultural production and selling off national economic and environmental resources cheap to foreign corporations. Internationally, it means avoiding closer ties with Venezuela,

Correa's resignation

Palacio's pretext for forcing Correa's resignation was Correa's alleged failure to consult about the sale of US$300 million of sovereign debt to Venezuela. Correa's published resignation letter to Palacio states, "I carried out this whole operation... (the purchase of Ecuadoran bonds by Caracas) with your due knowledge and I do not understand your displeasure at international commitments allegedly entered into without your knowledge."[2] Correa had promoted closer technical cooperation with Venezuela, for example, using Venezuelan refineries to add value to Ecuadoran oil products. He also pushed for joint marketing arrangements for those products so as to increase profitability.

In a press conference following his resignation Correa referred to strong foreign and domestic pressure to avoid moves towards economic cooperation and energy integration with Venezuela. He said he felt "a very strong pressure and a direct boycott to impede the operation with Venezuela ....the situation was unsustainable...the lack of support for the policies and work of the Minister were intolerable and I could not tolerate it. It's impossible for an economy minister to operate without the support of the President." [3]

From the viewpoint of the US and its local allies, among them officials in the Ministry for Energy and Mining, Correa's scepticism about the free trade deal with the United States and his willingness to seek cooperation with Venezuela were bad enough. His willingness to thumb his nose at the World Bank also served to guarantee his ministerial demise. In July this year he wound up a government debt reduction fund against the wishes of the World Bank as part of a program of measures to try and redistribute Ecuador's oil wealth more equitably. [4]

The World Bank promptly cancelled a scheduled loan of US$100 million tied to maintenance of the fund. Correa had already taken that into account. The World Bank money would have been replaced by funds resulting from the Venezuelan purchase of Ecuadoran government bonds. It was precisely Correa's determination to do things differently to improve conditions for the Ecuadoran majority that led to his forced resignation.

The Colombian complication

Correa's resignation has sharpened the popular perception that Palacio's administration is a false dawn with little new to offer. Palacio is isolated in terms of party political support and has now lost support in the popular and indigenous movements. The only area where Palacio's government seems to enjoy support is in its foreign policy. Despite US and Colombian pressure Palacio has refused to involve Ecuador in Colombia's civil war.

In reponse to Colombian demands for closer military cooperation against the Colombian guerilla resistance, Ecuadoran foreign minister Antonio Parra has stated, "It's disagreeable to say, and perhaps even imprudent, but what is being sought a bit is to implicate us, so that in some way we become part of that problem, a problem we are not going to become part would be madness for us to get involved in that problem. It is a shame for Colombia, we are going to protect our frontier, we ask Colombia to comply and also to protect its frontier and to exercise sovereignty in that zone.... Colombia also has to contribute its part in this. We understand that it has a very serious problem, that there is really a civil war, that the insurgents occupy more than half of Colombia throughout the Amazon region." [5]

Ecuador has over 600 kilometres of frontier with Colombia protected by more than 10,000 soldiers and police. Official estimates reckon about 450,000 Colombians live in Ecuador. Apart from the many problems involved in policing such huge numbers on such a long frontier, the Ecuadoran authorities also have to cope with chemical warfare in the form of glyphosate fumigations used against the Colombian guerrilla resistance by the Colombian government, affecting rural communities along the two countries' common border. So acute has human and economic damage from fumigations become that the Ecuadoran government is threaatening international legal action against Colombia should it refuse to stop these chemical warfare measures affecting Ecuadoran communities. [6]

Social justice - priced per barrel?

The combination of Colombia's narco-government hypocrisy and intransigence with crude pressure from the United States and its proxy international financial institutions is a volatile mix for politicians to handle in contemporary Ecuador. Rafael Correa tried to follow the example of creativity and resourcefulness in neighbouring Venezuela in order to benefit the poor majority in Ecuador. He was squelched by pressure from the United States and local appeasers in the sell-out Ecuadoran elite.

The US and its allies may have won a temporary respite from the popular advance in Ecuador by getting President Palacio to dump Correa. But as Ecuador's oil revenues increase with surging international prices, popular pressure for an equitable distribution of the benefits will increase correspondingly. Rafael Correa's forced resignation heralds a straightforward battle for Ecuador's sovereignty along with that of the other Andean countries. Are their resources to used to benefit their own people or are they to be sold off cheap by local quislings to inflate the profits of foreign corporations?


toni solo is an activist based in Central America - contact via


1. That may have resulted from the failure of diplomatic carnivorous sheep Colin Powell to defend his patch against politically omnivorous tyrranosaurus Donald Rumsfeld. In any case Southern Command has long been a kind of reserve pool for astute and capable former State Department diplomats like Barbara Moore, formerly US ambassador to Nicaragua.

2."Vínculos con Venezuela forzaron a renuncia de ministro ecuatoriano" Prensa Latina 05/08/0

3."Denuncia del ex ministro de economía Rafael Correa. Ecuador: "Por órdenes extranjeras boicotean los acuerdos con Hugo Chávez"" Panorama. 06/08/05

4."El Banco Mundial le niega un crédito al Ecuador" 30/07/2005

5."Tensas relaciones entre Colombia y Ecuador", Alejandro Gómez, Prensa Latina, 1 july 2005

6."Acudirá a la Corte Internacional de Justicia de La Haya por el tema de las fumigaciones", 24/07/2005

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