Cablegate: Palacio Outlines Plan for His Remaining Eighteen

This record is a partial extract of the original cable. The full text of the original cable is not available.



E.O. 12958: N/A

1. Summary: In public comments on May 24, President Alfredo
Palacio fleshed out his government's plan for its remaining
18 months, focusing on six points: politics, the economy,
foreign policy, infrastructure, health and education, and
security. The President set a timeframe of three to six
months for a Popular Assembly that will propose
constitutional reforms by popular referendum. Palacio
reiterated that he will respect existing international
agreements. End Summary.

Palacio's Six Points

2. POLITICS: Palacio said a priority would be the
re-establishment of the Supreme Court, Attorney General,
Comptroller General, and the Constitutional Tribunal, all
independent from partisanship. He proposed a complete review
of electoral laws, and consideration of representation by
district for Congressional deputies, a bicameral legislative
branch, and a modification of the laws governing political
parties and movements. Palacio said he would seek political
decentralization. A Popular Assembly would be formed to
propose constitutional reforms to be submitted to a national
referendum in the next three to six months.

3. ECONOMY: Palacio said Ecuador would honor its foreign
debt as long as he is able to continue investing in Ecuador's
productive capacity and social needs. A reform has been sent
to Congress to remove investment spending from the ceiling of
3.5% growth in government spending. Palacio would reallocate
the petroleum stabilization fund (FEIREP): 40% for national
productive reactivation and for debt repurchase, 15% for
health, 15% for education, 20% for oil stabilization, and 10%
for scientific research. The government intends to create a
Ministry of Science and Technology.

4. FOREIGN POLICY: Palacio said Ecuador would maintain its
respect for international law and its principles, as well as
for all international agreements, treaties, and contracts
signed by the State. Palacio asked the United States and
Canada to support change in its relations with the
International Monetary Fund and the World Bank, to permit
Ecuador to escape its underdevelopment. There was no
specific reference to the free trade agreement, though he
said Ecuador would negotiate commercial agreements with many
countries, including the United States.

5. HEALTH AND EDUCATION: Palacio said he would implement a
government-run universal health insurance policy. He said he
would seek to improve education and encourage private
scientific research to help reduce the high rate of migration.

6. INFRASTRUCTURE: Palacio said public and private savings
should be made available at low interest rates to invest in
communications and roads, telecommunications, natural
resources, the environment, and water. With funds from the
Ecuadorian Social Security Institute, Ecuador will fund a
project to better utilize oil resources, while benefiting

7. SECURITY: Due to an increase in crime, there must be a
consolidation of the judicial system, a review of the police
system, and clarification of the role of the Armed Forces in
security matters. In the long run, extreme poverty,
inequity, social injustice, and disease, must be reduced to
prevent crime.


8. Palacio announced his proposal in response to increasing
public pressure for his government to chart its path. With
just a year to achieve reforms before the next Presidential
campaign begins in July 2006, his plan could be faulted for
being over-ambitious, and on some issues, such as political
reform, ill defined. This was Palacio's first mention of a
Popular Assembly, for example, and no details were given on
how that would be structured. Until now, the GOE had flirted
with a serious of assemblies or dialogue roundtables, a key
demand of the protest movement. Although his plan does not
counter USG interests, it does have a more nationalistic
flavor, and we are concerned about the sustainability of
Ecuador's fiscal situation.

© Scoop Media

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