Ecuador: Clash of old and new

Federico Fuentes, Caracas

Green Left Weekly, 27 July 2007

Denouncing the congress as “rubbish” and a “national disgrace”, left-wing Ecuadorian President Rafael Correa called on the upcoming constituent assembly, for which there will be elections held on September 30, to dissolve the body, which is widely viewed as corrupt. The calls came after the opposition-controlled congress amended a number of recent laws introduced by the executive to curb unprecedented rises in the price of food.

Correa’s call also came in the wake of congress’s censure of finance minister Ricardo Patino over a scandal involving the secret filming of a discussion between the minister and figures from the banking sector. Patino is highly popular due to his hardline opposition to international financial institutions, recently stating that Ecuador should not pay its “illegitimate” foreign debt.

Reuters reported on July 25 that deputy economy minister Fausto Ortiz had been made Patino’s successor. The news wire reported that “Ortiz, who has said his role is to make sure the government avoids a default on its foreign debt, told Reuters Ecuador would not do anything that might jeopardize foreign financing”.

According to the July 22 edition of Venezuelan daily 2001, Correa made reference to the concerted campaign by big business to push prices up by 25%-50%, stating the “the groups of power are desperate and they will try to destabilise us by any means possible”. He threatened business owners with prison terms if they were found to be involved in speculation.

“We will give them until Monday [July 23] for prices to return to their normal level or we will take measures [via] decrees and we will put in prison the business owners, the intermediaries, who are speculating.”

He asked the population to be “prepared” because “this is only the beginning. Ahead of us are days which will be much more harder because the oligarchy, the partyocracy [a reference to the loathed traditional parties of the elite that dominate congress], certain media outlets, the banking sector, are desperate.”

Dispute over hegemony

According to Virgilo Hernandez — a candidate for Agreement Country, an alliance formed by Correa’s party Alliance Country to contest the constituent assembly elections — this clash was only the latest in an ongoing “period of confrontation” between Correa and “the oligarchic powers, financial powers, and large media corporations”.

“We are living through a dispute over hegemony between the oligarchic forces, those forces that have opposed change, and the process of transformation being pushed by President Correa and other forces that are supporting Correa”, he explained to Green Left Weekly during a visit to Venezuela in mid-July.

Correa contested the 2006 presidential elections with the stated aimed of bringing about a “citizen’s revolution”, uniting Ecuadorians behind a radical project aimed at moving Ecuador away from neoliberalism. Since day one of the Correa government, the international and local elites have been campaigning against the Correa government, which they see as a direct threat to their interests.

The congress has been one of the battle sites between the elites, represented in the form of the traditional political parties, and Correa’s project. While Correa won convincingly in the second round of the presidential elections, his party did not contest the concurrently held elections for the congress. This left control of this widely discredited body in the hands of parties tied to the Ecuadorian elites. Instead, a central point of Correa’s election campaign was to call a constituent assembly to do away with congress and rewrite the constitution to lay the foundations for a new Ecuador.

This is an idea shared by many in Ecuador. Blanca Chancoso, leader of ECUARUNARI, the largest indigenous organisation affiliated to the Confederation of Indigenous Nationalities of Ecuador (CONAIE), told GLW that congress had lost all credibility, and that “it is the problem”.

“The people are demanding its dissolution; it is not just a policy of the president. I believe that after the new constitution is approved, a new congress should be installed”, she added. This was reflected in the strong show of support for Correa in April, when over 80% of Ecuadorians voted in favor of convening a constituent assembly, giving a massive boost to his popularity and his political project.

While Hernandez is not a member of Correa’s party, his organisation, Democratic Alternative, has decided to come behind Correa’s project, running candidates on his slate for the constituent assembly. Hernandez believes that Correa has a “clear conviction to create a homeland for all” and to construct a more democratic Ecuador. Through the constituent assembly, Ecuadorians will be able to work out “what we want our ’socialism of the 21st century’ to look like”.

For Hernandez, such a society requires “a democracy without end” with the extension and deepening of democracy “in the economic sphere, in the political sphere — [for example,] how can we democratise the right to education, health, housing, which until now have been in the constitution only in a rhetorical form”.

Indigenous movement

On the other hand, Chancoso explained that CONAIE would be supporting the candidates of Pachakutik, the political arm of the Ecuador’s powerful indigenous movement. “In the political, electoral sphere, Pachakutik is calling on different social sectors to converge, with a strong indigenous identity — which does not mean a movement or party that is exclusively indigenous, but rather that clearly identifies itself with the indigenous people.”

Through the constituent assembly, Chancoso argues that Ecuadorians could begin to “lay the foundations of a new country that brings together the indigenous and non-indigenous population”.

“We [the indigenous people] are more than 40% of the population. We have being putting forward our proposal of a plurinational state. Our country is not made up of just one people, but rather is comprised of many millenary peoples with different cultures, which existed long before the Spanish invasion.”

Chancoso explained that for indigenous people, the demand of a “plurinational” state was a call for “unity based on diversity”. This diversity allow for the self-determination of the indigenous peoples “as communities, as nations”, but seen from within a “political process of identity, on the basis of a common political agenda, an agenda of sovereignty of the country”.

“Our slogan is ’Never again a country without us’. Even if we do not gain a majority of delegates, we believe that we will be fighting inside [the assembly] to enshrine in the constitution real changes, a real restructuring to refound the country …”

Even though there are different lists that will represent different sections of the left in the upcoming elections — Agreement Country, Pachakutik and the Maoist-influenced Movement for Popular Democracy (MPD) — Hernandez said that there was an important need “to make the effort to have a common project. We [Agreement Country] are making an effort to find points of agreement to transform the country and to deepen democracy, which we characterise as part of this new socialism of the 21st century.”

From: International News, Green Left Weekly issue #719 1 August 2007.

Ecuador’s Quest For A Coherent Foreign Policy

Quito’s Rocky Foreign Relations: Two Separate Issues Point in One Direction

COHA, July 27, 2007

Ecuador is currently handling two major foreign affairs questions – recent proposals to join OPEC and a contentious flap over UNITAS Pacific, a naval exercise that has been hosted annually by the U.S. Navy since 1959. The naval exercise involves Peru, Panama, Colombia and Chile, and is staged to encourage positive inter-American military ties and to augment naval cooperation. UNITAS Pacific is part of phase one of Partnership of the Americas, a 6 month naval mission sponsored by the Pentagon.

Almost simultaneously with the deployment of UNITAS Pacific, the twelve member nations of the Organization of Petroleum Exporting Countries (OPEC) were discussing the possible return of Ecuador to its fold, after Quito submitted an official request to rejoin the organization in June. Ecuador was a member of OPEC from 1973 until 1992, when the difficulty of keeping up with overhead payments to the organization induced it to withdraw. Since that time, Ecuador’s economy has struggled even more fitfully than it had before, as the lack of refining facilities forced the country to depend upon costly imported gasoline in spite of its ample crude reserves. In 2006, Quito ousted its largest foreign investor, Occidental Petroleum of Los Angeles, after the government claimed that the company was not adhering to its contractual arrangement with the country. This led to a harmful decline in output. It is becoming increasingly clear that the consequences of both the OPEC and UNITAS Pacific gatherings could extend to a level beyond naval, petroleum, and military collaboration.

Rafael Correa, the left-leaning president of Ecuador, is the country’s eighth chief executive in ten years. The unstable nation appears open to Correa’s plans to improve the economy and its petroleum-based energy sector by strengthening Petroecuador and becoming an active OPEC contributor; but questions have surfaced among some non-OPEC governments (notably the U.S.), based on Correa’s close relationships with Bolivia’s Evo Morales and, especially due to Quito’s kinship with Venezuela’s Hugo Chávez, as of now Latin America’s only member of OPEC.

In aspiring to rejoin OPEC, President Correa is assuming an opposite role than was the case with UNITAS Pacific, as the headquarters for this year’s exercises were abruptly moved from Ecuador to Colombia. According to officials with the U.S. Southern Command, the shift was due to an unsettled maritime border dispute involving Ecuador and Washington. Consequently, Quito decided to no longer contribute its resources to the U.S.-sponsored wargame. Pulling out of UNITAS Pacific conveyed the resentment felt by Ecuador towards participating next to the U.S. Ecuador’s Foreign Minister, María Fernanda Espinosa, commented, “in the face of this unusual, unilateral, unsolicited, and unacceptable decision, Ecuador has decided not to participate in UNITAS in 2007.” On the surface, the issue of OPEC appears unrelated to UNITAS Pacific, yet under closer examination it is clear that both initially reveal similar traits, namely, their potential to recalibrate Ecuador’s foreign relations in a direction away from Washington.

A Decade of Economic Turmoil
While the 1980s and early 1990s saw several attempts at democratic governance in Ecuador, the nation’s economy and political infrastructure have encountered sustained turbulence since 1996. A lack of stable leadership created substantial political chaos, and the absence of predictable access to natural resource production (especially petroleum) led directly to Quito’s economic crisis of 1999.

In that year, just one year after a new constitution was being drafted, Ecuador plunged into an economic free-fall. With the curse of El Niño – the periodic and devastating warming of offshore waters that, in 1999, damaged much of the country’s agricultural land – as well as an acute drop in world oil prices, Ecuador’s GDP fell 7.3 percent, and the national currency was devalued by about 70 percent. To cope with this collapse, Quito decided to dollarize in 2000, causing petroleum prices to climb. Moreover, refining capacity still remains a pertinent concern, and the future of Ecuador’s steadiness rests largely in the hands of Correa. With support from across Latin America, and with some fresh economic ideas – especially prospects of rejoining OPEC – perhaps Ecuador’s president will be able to firmly guide the nation into the international mainstream.

President Correa’s attempts to guide the nation to prominent stature in the global market could, however, be spoiled by the UNITAS Pacific controversy. From the U.S. perspective, Ecuador has been in a maritime dispute with both the U.S. and Peru. The U.S. recognized Ecuador’s jurisdiction of twelve nautical miles of territorial waters, while Ecuador insisted on a 200 mile limit. In addition, a parallel border was drawn between Ecuador and Peru based on an agreement signed in 1952. However, Peru had never accepted this decision. Peruvian President Alán Garcia dismissed this claim and denies any dispute, “border or maritime,” with Ecuador. For her part, Minister Espinosa similarly insisted that such a disagreement had been settled years earlier, verifying that it could not be used to explain the U.S. Southern Command’s decision regarding Ecuador’s nautical minutes. From Quito’s perspective, the relocation of the UNITAS Pacific headquarters was entirely unforeseen. Colombian Defense Minister Juan Miguel Santos understood that the maneuvers were moved from Ecuador because Ecuador and the U.S. had failed to come to an accord regarding the configuration of the UNITAS Pacific naval drills, further revealing the ambiguity clouding the decision.

A Trip Follows Disaster: Negroponte’s Attempt to Reduce Tension
In May 2007, U.S. Deputy Secretary of State John Negroponte traveled to Colombia, Ecuador, Panama and Peru intending to meet with Latin American heads of state and discuss policy issues. The U.S. has recently turned down a Free Trade Agreement (FTA) with Colombia, and has set back by several months the forging of FTAs with Panama and Peru, which had been in the works. This put Ecuador in an unsurprising outsider position, considering that President Correa recently declined the U.S.’s offer to enter into such a bilateral pact. On top of Ecuador’s already rocky relations with the U.S. due to the UNITAS Pacific decision, it is no surprise that Negroponte’s trip could have provoked some awkward moments. Upon meeting with Negroponte, the Ecuadorian leader verbalized a subtle but provocative reference when he said, “Ecuador has a government which loves democracy and liberty deeply but, like the U.S., it also loves its sovereignty.” The value and concern Ecuador has placed recently on its national sovereignty has been a vehicle in helping to trigger increasingly chilled feelings between the U.S. and Ecuador.

Latin American “Brothers and Sisters”: Harmful or Beneficial?
The consequences of Ecuador’s UNITAS Pacific decision surface when Ecuadorian officials compare their relationship with neighboring Latin American countries to their relationship with the U.S. Support from the U.S. for leftist political leaders like Venezuela’s Hugo Chávez is nonexistent; yet, the tri-lateral relationship between Venezuela, Ecuador, and the U.S. generates an enticing illogicality. Although a healthy relationship seemed to exist separately between both Ecuador and the U.S., and Ecuador and Venezuela, Washington has repeatedly challenged the policies of the Chávez administration and its counter-hegemonic tendencies. Ecuadorian officials should consider this contradiction when expressing support for the Chávez administration while simultaneously anticipating that the U.S. will support them when it comes to other pressing issues like the Andean Trade Protection and Drug Eradication Act (ATPDEA). While it is possible that Correa is allying his administration with specific Chávez policies in order to give his own government more leeway, caution remains essential for Ecuador to ensure comfortable relations with Washington, as it pursues membership in OPEC.

The Correa-Chávez Equation
In its mission statement, OPEC identifies two goals for its member nations: “[To] coordinate their oil production policies in order to help stabilize the oil market and to help oil producers achieve a reasonable rate of return on their investments.” During Ecuador’s previous involvement in the cartel, it produced very little petroleum in comparison to most of OPEC’s members – only the small African nation of Gabon exported less. With the recent encouragement and support from Chávez, Ecuador can potentially fulfill more of the first objective in an effort to maximize the second.

Correa is not the only Ecuadorian president to foster oil-based relations with Venezuela. In May 2006, Chávez visited Quito and signed several energy agreements, including one contract to refine as much as 100,000 barrels of crude oil per day. Ironically, while the U.S. and other developed nations balk at high gas prices and hunt around the Middle East in hopes of acquiring new petroleum production, Ecuador sits on reserves that it cannot afford to exploit. Meanwhile, Quito’s petroleum industry is horrendously prone to accidents and lost production, quickly wilting away the treasured Amazon by its casual environmental standards while alienating Ecuador’s relatively large population of indigenous peoples. Between 1990 and 2005, over 20 percent of Ecuador’s forest coverage was destroyed because of oil operations. Additionally, Texaco’s massive oil operations spilled nearly 17 million gallons of crude oil into Ecuador’s waterways in the 25 years that it held an oil stake in the country.

It is nearly inevitable that Ecuador will join OPEC – an occasion that is expected to provide a considerable economic boost to the struggling nation. However, it is also certain that any increase in oil extraction is likely to be extraordinarily deleterious to the surrounding environment. In attempts to counteract the expansion of pollution, Correa has made a novel appeal to the international community by asking for funds to refrain from opening new oil fields in the Ecuadorian Amazon: “Ecuador doesn’t ask for charity, but does ask that the international community share in the sacrifice and compensate us with at least half of what our country would receive, in recognition of the environmental benefits that would be generated by keeping this oil underground.” It is virtually hopeless that the petrol-hungry industrialized world will accommodate such a radical, if logical, form of preservation, and therefore it is inherently necessary that the world acknowledge Ecuador’s cries: Quito is unable to afford much of its own refining. Meanwhile, its environment has suffered immeasurably. With the untapped fields of the Yasuni National Park estimated to contain between 900 million and one billion barrels of crude oil, the question arises: is the international community willing to pay in order to prevent this irreplaceable resource from being destroyed by exploitation?

Washington’s Position on Ecuador; Manta Base to Expire in 2009
The relationship between Ecuador and Venezuela is important to evaluate because close ties may have strong implications both within OPEC and across the international community. Prior to his election, Correa announced that he greatly anticipated closer relations with Venezuela, but adamantly denied any need for Venezuelan assistance. Chávez quietly supported Correa throughout the campaign, and at Correa’s January inauguration, Chávez presented Correa with a replica of Simón Bolivar’s sword.

While this may seem inconsequential, it is not so for the Bush Administration, which loses no love over Chávez’s leftist government. The election of Correa may have significant implications for Washington: Ecuador is the U.S.’s second-greatest supplier of South American makeshift oil and is the home of the only U.S. military base in South America. In January, Correa announced that Quito will not renew its leasing arrangement with Washington for its Forward Operating Location (FOL) situated in Manta, Ecuador, which ends in 2009. The basis for this action is that it is not aligned with Ecuador’s national sovereignty.

The Eloy Airfield in the northern city of Manta was originally intended to provide a site from which the U.S. could regulate and provide surveillance of drug trafficking flights in the region as a counter-narcotics component of Plan Colombia. The lack of emphasis by the U.S. on the renewal of the Manta base may clarify the rather fuzzy explanations for the motivation behind the UNITAS Pacific controversy; it could be maintained that the decision of the U.S. Southern Command to move the headquarters was a form of retaliation for the refusal of upholding Manta as an FOL. The U.S. push for a military base in Manta reaches beyond its anti-drug trafficking itinerary. Its closure highlights the possibility that Ecuador will be less keen on welcoming Colombian refugees, a fear now rooted in the hearts of the vulnerable group. Nonetheless, Minister Espinosa has made Ecuador’s intentions quite clear: “Ecuador is responding to feelings and desires of the Ecuadorian people who do not support the presence of foreign armed forces; from where these armed forces are is irrelevant.” Clearly, Correa is aiming for Ecuador to play a stronger role in regional politics while steering away from relations with Washington, a position that could be greatly accelerated by Quito’s acceptance into OPEC.

A Change of Course: Logistical Problems
Some OPEC member states have expressed a desire for Ecuador to repay the $5 billion debt it owed OPEC upon its withdrawal from the organization in 1992. Correa, however, seems set on the prospect of re-joining, despite the country’s inability to compensate its creditors: “the decision to return to OPEC has been taken and this will open up a lot of opportunities, among them access to credit in Middle East banks.” The outlook became even more positive for a hopeful Quito, as the OPEC Secretary General, Abdullah Al-Badri, expressed the conviction that he “expects” and “hopes” that Ecuador will be accepted as a member at the September meeting of OPEC states in Vienna, Austria.

It is an intrinsic necessity that the developed world not only applauds and encourages the advancement of Ecuador in the hemispheric market, but that it also is mindful of the warnings and dangers of environmental and humanitarian dereliction. The major imperative for the U.S. is pursuing energy dependence before it will consider helping a small player like Ecuador. As the Bush Administration continues to claw for an alternative fuel agenda, perhaps a more logical route is for it to acknowledge Correa’s help and pleas to prevent the destruction of one of the world’s most treasured natural habitats by purchasing pre-production rights from Quito. In 2006, the U.S. accounted for 54 percent of Ecuador’s exports, the primary being petroleum. While OPEC should help to bolster Ecuador’s economy and increase its presence in the world market, the receiving market needs to heed Quito’s warnings and seek alternative agendas. Surely Ecuador’s acceptance into OPEC could help foster more positive relations that may have been tarnished from the UNITAS Pacific matter. The UNITAS Pacific decision has the potential to stoutly affect the bigger geopolitical picture: Ecuador’s position in the eyes of its neighboring countries and the U.S. Ramifications of the UNITAS Pacific decision may manifest themselves in formally unrelated issues, such as OPEC, and likely will play a significant – if not central – role in Ecuador’s future.

This analysis was prepared by COHA Research Associates Anna Gangadharan and Erin Nagy
July 27th, 2007
Word Count: 2400

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Peru and Colombia to host U.S. Military Operations

Written by Cyril Mychalejko, UpsideDownWorld

Thursday, 26 July 2007

Washington has gained access to two new airbases in Peru and Colombia in the face of losing its Manta airbase in Ecuador. Although U.S. officials have stated they haven't ruled out the possibility of gaining an extension of its lease, it seems unlikely. Correa has said that he believes the base is a threat to Ecuador's sovereignty and would only consider allowing the U.S. to continue to use the base if Ecuador was allowed to have a base in Miami. The lease expires in 2009. Manta, which according to Washington and unquestioning media outlets is used for the "War on Drugs", came under investigation last year as it was used illegally by private contractors to recruit mercenaries sent to Iraq and Afghanistan. According to The Miami Herald State Department officials worry that the loss of Manta would allow drug trafficking to flourish, while suggesting that President Hugo Chavez's decision to scrap joint drug control agreements with the U.S. has led to rising production and traffickers shifting operations to Venezuela. Deputy Secretary of State John Negroponte, whose tenure as Ambassador of Honduras in the 1980's included arming the Contras, supporting and collaborating with the Honduran death-squad Battalion 316, and undermining regional peace efforts, said in May he believes that it is in Ecuador's best interests to keep a U.S. presence at the Manta base.

Correa's war

In Ecuador a reforming government is battling against a hostile opposition media as well the country's corrupt political class.

Mark Weisbrot, in The Guardian, July 26, 2007

In his recent book The Assault on Reason, former vice-president Al Gore describes how "the potential for manipulating mass opinions and feelings initially discovered by commercial advertisers is now being even more aggressively exploited by a new generation of media Machiavellis." The concentration of broadcast media ownership is indeed a real threat to democracy, as we learned the hard way when more than 70% of Americans were convinced, falsely, that Saddam Hussein was involved in the attacks of September 11 - thus enabling the launch of a disastrous and unnecessary war in Iraq.

The problem is even worse in Latin America, where monopolised TV media provides a much larger share of the news that people receive, and is even more shamelessly manipulated for political purposes. In Ecuador, President Rafael Correa, an economist with a PhD from the University of Illinois, was elected last November with a broad mandate for economic reform, pro-growth development policies, and poverty alleviation. One of his government's first acts was to double the monthly stipend for single mothers, the disabled and elderly poor.

Although Correa ran without a political party or candidates for the congress, his mandate was strongly reinforced when the government won a referendum to draw up a new constitution by an even larger margin of 82%. As in a number of other countries in the region, which has seen a record economic failure over the last 25 years, voters endorsed the sweeping institutional and political changes they saw as necessary to enfranchise the majority.

But on May 21 the opposition media launched an assault on President Correa's finance minister, Ricardo Patino. In a seven-minute grainy video clip from a hidden camera, they showed the minister meeting on February 12 with two representatives of a New York investment firm, as well as a former finance minister. Patino talks about "scaring the markets", in what looks like a plot to manipulate the country's bond market. The clip, taken out of context, was shown repeatedly for days on the TV news, spliced with gratuitous, unrelated images of faceless people counting large amounts of cash.

It turns out that the video was authorised by Patino himself, an odd thing to do if one is meeting to plan a crime. Patino claims that the purpose of the meeting and the taping of it was to investigate corruption. And indeed the rest of the video - not shown on TV but presented in a transcript published in Ecuador's major newspapers - supports his explanation. In the rest of the meeting, Patino is probing for information on corrupt activities - including past market manipulations. He allows the others to present and explain the possibilities in detail, never agreeing to go along with anything - just as one would expect in an investigation of this sort.

In fact he states that it would be wrong to manipulate the market. The meeting ends with one of the investors stating that nothing would be done regarding the current debt payment - which was due three days after the videotaped meeting - but that they could think about what to do in the future.

But the TV media's repeated, propagandistic images - playing on people's cynicism from decades of corrupt government - had the most influence. This emboldened the opposition to make more wild allegations of secret deals with foreign banks, and vote to censure Patino in the Congress - which they control. All of this has been done without anyone presenting evidence that the finance minister was involved in any wrongdoing.

If all this seems Orwellian, it is. Ecuador currently has the most honest government it has ever had - that is why it has had so much support from the beginning. Yet the impression that is coming across in the media - both Ecuadorian and now spilling over into the international press - is one of corruption.

Correa remains immensely popular, and he has defended Patino, who has now taken another cabinet position. The government will survive this assault, and move forward with its agenda. But the opposition, led by the traditional elite and corrupt politicians, will use this "scandal" - with the help of the media - to undermine the government and the reforms that the voters have chosen.

A project for the ancestral languages

Translated from El Comercio

Quito, July 26, 2007

The Commission on Indigenous Affairs has sent to the president of the National Congress, Jorge Cevallos, a favorable report on the second debate over the project for a law on the Applicability of Ancestral Languages.

The legal project would allow members of indigenous peoples and nationalities to use their native language to express opinions, requests and demands, orally or in writing, in their public and private legal affairs.

The proposal recognizes the existence and the official use of the languages: Awapit, Chápalaachi, Siapedee, Tsáfiqui, Shuar-Chichan, Achuar-Chichan, Paicoca, Huao Tiriro, Aingae, Sápara, Shiwiar Chichan and Quichua.

Congressman Raul Ilaquiche, president of the Commission, pointed out that in Ecuador different nationalities and indigenous peoples coexist, yet are all part of one single State.

He explained that, according to the proposal, public institutions will promote the use of the languages in an increasing and progressive manner, in judicial affairs, in official documents, as well as in the inscription of personal and family names in the Civil Registry.

Also planned is the strengthening of the National System of Bilingual Intercultural Education, by establishing teaching and research programs at all levels of education.

The Commission's Report also advises the creation of an advisory body of Ancestral Languages , a technical-academic organisation that will center its work around the direction and support for development and linguistic normalisation, in coordination with the National Directorate of Bilingual Intercultural Education.

The Commission emphasized that in preparing of the report they gathered the opinions of those who contributed observations to the first debate, as well as from the Confederation of Indigenous Nationalities of Ecuador (Conaie), the Confederation of Farmer and Black Peoples and Organizations, the Ecuadorian Federation of Evangelical Natives (Feine), the Ecuadorian Indignous Federation (FEI), the National Federation of Agro-industrial Workers, Free Farmers and Natives, among others.

Ecuador criticizes RCTV CEO remarks against President Correa

El Universal, July 25, 2007

Ecuador dismissed as "impertinent and insulting" TV channel Radio Caracas Televisión (RCTV) CEO Marcel Granier criticisms against the president of the South American country Rafael Correa, whom he branded as "ignorant" for backing the Venezuelan government decision not to renew RCTV broadcast license.

The Ecuadorian government voiced its rejection to the impertinent and insulting nature of Granier's statements from Caracas to station Radio Quito, where he " threw unwarranted vulgarities at president" Correa, said Ecuadorian Ambassador to Caracas, Francisco Suéscum, in a letter addressed to Granier.

Suéscum lambasted Granier's remarks labeling them of "clumsy," and advised RCTV CEO to "present enough proofs to back his statements."

Ecuador's Patino May Assume New Cabinet Position, Universo Says

By Guillermo Parra-Bernal

July 25 (Bloomberg) -- Ecuadorean Finance Minister Ricardo Patino may be tapped to run a new cabinet position in which he would have full control of policy matters for the country's coastal region, El Universo said on its Web site.

Patino may leave the finance ministry and would be replaced by his deputy, economist Fausto Ortiz, the Quito-based newspaper reported, citing officials familiar with the situation. The new ministry for the coastal region will be based in Guayaquil and not in Quito, the nation's capital, Universo said.

Patino said he and President Rafael Correa have held talks over the creation of the new cabinet post since February, Universo said. Correa is scheduled to make the announcement today, Universo said.

Patino's spokeswoman Marcela Cevallos declined to comment on the report in a phone interview with Bloomberg from Quito.

(El Universo 7/25) http://www.eluniverso.com

To contact the reporter on this story: Guillermo Parra-Bernal in Sao Paulo at gparra@bloomberg.net

Assassination Plot Revealed in Ecuador

Quito, Jul 25 (Prensa Latina) Ecuadorian Government Minister Gustavo Larrea disclosed a conspiracy against the government on Wednesday that was aimed at destabilizing the country and assassinating President Rafael Correa.

Speaking on local TV, Larrea informed that during a meeting on July 7 several people plotted to destabilize the current administration with actions to trigger a shortage of gas and other products.

The idea was put forward at that meeting to buy a missile to attack Correa, the minister said.

Related investigations began a day after information on the meeting was leaked, said Larrea, who denied the arrest of any of the connivers, and added that the people would be informed as soon as they have concrete elements and evidence.

Ecuador picks moderate economy chief after scandal

By Alonso Soto and Carlos Andrade

QUITO, July 25 (Reuters) - Ecuador's leftist president, Rafael Correa, replaced his hard-line economy minister on Wednesday with a moderate after Congress censured the minister in a scandal involving charges of debt market manipulation.

Deputy Economy Minister Fausto Ortiz, 42, succeeded Ricardo Patino and immediately adopted a softer line than his predecessor, who had long rattled Wall Street with a threat to suspend some foreign debt payments.

Ecuadorean bonds bounded upward, reversing days of steep declines, even though Correa and Patino said the cabinet moves did not signal a change to the government's radical policies.

Returns on Ecuador's global bonds rose 2.94 percent, JP Morgan data showed, bucking a fall in emerging market bonds.

Wall Street analysts see Ortiz as an expert in debt markets with a reputation as a moderate who prefers market-friendly tools to cut the cost of foreign debt servicing.

Ortiz, who has said his role is to make sure the government avoids a default on its foreign debt, told Reuters Ecuador would not do anything that might jeopardize foreign financing.

After he was sworn in he said spurring economic growth was the priority, not debt restructuring, and that it was possible for the government to both meet its foreign debt obligations and spend on the majority poor.

Correa emphasizes meeting Ecuadoreans' demands before those of foreign investors in a policy he calls "life before debt."

Ortiz was not considered part of the president's innermost political circle, even though he had served as treasurer to Correa when the latter was economy minister in 2005.

Correa said that while the appointment would not change economic policies, it showed the tolerance of different voices in his government.

"Fausto Ortiz will not only continue with our sovereign agenda, but his contribution will also be evidence that we are not a cult but rather a team of thousands of women and men willing to give our lives for our new country," Correa said.

DEBT LIABILITY

Patino, who moved to head a new and politically important ministry responsible for coastal regions, has been one of Correa's closest aides since his election campaign last year.

Patino was barraged by accusations in the past few months that he manipulated debt markets. Censured by Congress on July 13, he steadfastly denied wrongdoing.

The scandal took a toll on the president's popularity and support in Congress, complicating his efforts to broaden the government's control over private banking.

Ortiz was key in the past administration's sale of $650 million in Ecuador's global benchmark 2015 bonds in 2005, the country's first since defaulting in 1999 and whose proceeds were used to buy back more expensive Ecuadorean debt.

He "is much more experienced on debt and financing issues than ... Patino and is seen as significantly more pragmatic and constructive," wrote Goldman Sachs analyst Alberto Ramos.

The perceived risk on Ecuador's global bonds also fell in global markets on Wednesday, according to data from JP Morgan's Emerging Markets Bond Index Plus.

The index showed the yield spreads between Ecuador's bonds and comparable maturity U.S. Treasuries narrowed 63 basis points to 688 basis points on a day on which emerging market global debt fell in most countries.

The spreads, which narrowed after the appointment, tightened sharply even further after he spoke to Reuters.

Correa moved Patino two months before a national vote to elect members of a new assembly, which will rewrite the constitution and is vital for Correa's leftist agenda.

Patino will be responsible for Ecuador's coastal regions, which traditionally are powerful voting centers, especially in Guayaquil, the country's largest and richest city. (Additional reporting by Carlos Andrade in Quito and Walter Brandimarte in New York)

Ecuador's Correa Extols Bolivar

Quito, July 25 (Prensa Latina) Ecuadorian President Rafael Correa highlighted the correlation between the ideals of Simon Bolivar in the 19th century and the people's revolution of the 21st century which, he said, is being encouraged in his country.

Speaking at the solemn session in Guayaquil for the 224th birth anniversary of the Liberator, Correa stressed that his government will take no step backward on its course, and will not give in to oligarchic pressures.

The president expressed his devotion to Bolivarian thought, and pointed out the socialism of the 21st century is meant to become the most advanced expression of human thought.

Correa also highlighted that when he assumed the presidency on January 15, he committed to fight for a different future "for the people, who understand the profound exercise of our sovereignty, with Bolivar's ideal as the central core."

Ecuador may extend inquiry into death of former defense minister

People's Daily Online, July 25, 2007
Ecuador's Defense Minister Lorena Escudero Tuesday has called for an extension of the investigation into the air accident that killed her predecessor after new evidence appeared, local media said.

"New elements have appeared during the Disciplinary Council hearings for one of the officers, which has not yet been completed," she said.

Escudero's predecessor, Guadalupe Larriva, died six months ago in a crash that also killed Larriva's daughter and five military officers. The helicopters in which they were traveling collided in mid-air close to Manta Air Base in southwestern Ecuador.

Escudero added that Larriva's chief of staff did not board the helicopter and there have been conflicting reports on his role.

A report on this evidence will be delivered to Ecuadorian President Rafael Correa next week.

The president will take the corresponding measures, Escudero said.

Source: Xinhua

Ecuador Renegotiates Foreign Oil Deals

Quito, Jul 24 (Prensa Latina) Ecuadorian Minister of Oil and Mining Galo Chiriboga said on Tuesday he wants to renegotiate oil contracts with foreign companies to achieve a better distribution of profits.

"We should adjust the agreements from the existing legal distribution bases established by the previous government" to improve them for the benefit of Ecuadorians, stressed Chiriboga.

Chiriboga defended the first steps made in this regard by Alberto Acosta, the previous minister of the sector, and announced he will continue the course taken by his predecessor.

Discussing a fall in oil production compared to last year, the minister said that several oil wells have entered a natural declination process, and technological effort is needed to recover the levels previously reached.

Ecuador Confirms President Threats

Quito, Jul 24 (Prensa Latina) Ecuadorian Defense Minister Lorena Escudero confirmed Tuesday some attempts to destabilize the country and threats against the life of President Rafael Correa.

"The intelligence service is investigating these accusations and it would not be advisable to release any information at this time," Escudero told ECUAVISA national television channel.

"We must safeguard the political process of change Ecuador is living and of course protect President Correa," stated the minister.

Referring to the topic, the interviewer of ECUAVISA program talked of two meetings, one in the Marriot Hotel and another at La Puntilla house, where there was a plot to overthrow the head of State.

Those gatherings, led by two political leaders opposed to the government, were also attended by a lieutenant colonel and a businessman linked to the oil sector during the Leon Flores Cordero presidency (1984-1998), the interviewer said.

Galapagos shark endangered by Ecuadoran decree: group

From France24.com, July 23, 2007

President Rafael Correa's decree legalizing the sale of shark fins caught by accidental fishing has put the Galapagos shark in peril of extinction, environmentalist groups warned Monday in Ecuador.

Prized as an aphrodisiac and gourmet delicacy in Asia, shark fins had been illegally harvested until Correa's decree, which he said will directly benefit 200,000 Ecuadoran fishermen and their families.

The presidential decree lifts a ban on the sale and export of shark fins caught accidentally outside Galapagos territorial waters. Deliberate fishing for shark fins is still prohibited.

"In theory, any type of fishing is banned in Galapagos, but it's difficult to monitor which species are caught and now, the decree could lead to more illegal fishing in the area," Ecological Action project coordinator Ricardo Buitron told AFP.

He said the measure will likely entice fishermen to Galapagos for shark fins they would sell elsewhere in Ecuador claiming they were caught accidentally outside the archipelago's restricted waters.

Buitron said Correa's decision "will increase the danger of extinction of the (Galapagos shark) species" since authorities will have a hard time "determining which fins have been caught in compliance with regulations."

But for External Relations Minister Maria Fernanda Espinosa, the new measure "will help make the marketing of shark fins more transparent, stop the black market and establish efficient control methods."

"Profits from the sale of shark fins," she told Teleamazonas TV channel, "will go directly to the fishermen ... and not to the pockets of middlemen and smugglers."

Shark fins fetch 50 dollars apiece on the black market, compared to the croaker, an expensive fish that sells at seven dollars a kilogram (2.2 pounds) in Ecuador.

The Galapagos Islands in the Pacific Ocean last month were put on a list of endangered world heritage sites by the UN's culture organisation, UNESCO, because of the growing pressure from tourism.

Situated 1,000 kilometres (625 miles) off the coast of Ecuador, the 19 islands have a unique wildlife and were the first ever site to be placed on UNESCO's regular list of World Heritage Sites in 1978.

Ecuador says could restructure debt at any moment

By Carlos Andrade

GUAYAQUIL, Ecuador, July 23 (Reuters) - Ecuador could seek to restructure its debt at any moment and an audit of its foreign debt will serve as key backing for the country's proposal, the economy minister told Reuters on Monday.

"The government at any moment could decide on a proposal on debt," Economy Minister Ricardo Patino said minutes before the naming of the commission to audit the debt. "But only the government will decide on the right time."

The commission would seek to determine "illegitimate" debt, or credits acquired by corrupt past administrations and which leftist President Rafael Correa has threatened not to repay.

The 13-member commission includes foreign debt critics, leftist advocates and the economy minister.

The group has a year to come up with any findings, but it could extend that deadline. A commission member said earlier it would be very difficult to determine "illegitimacy" in commercial Ecuadorean bonds.

The appointment of the group comes amid media speculation that Patino could step down this week to lead a new ministry of regional affairs after he was censured by Congress earlier this month.

When asked if he was going to resign Patino said, "I would feel comfortable in any public post."

Opposition lawmakers charged him of deliberately manipulating debt markets to benefit some investors after a secret video showed him making ambiguous comments about the debt.

He has denied any wrongdoing.

The scandal has dragged Correa's popularity down in recent months. leading to a September key vote to elect a 130-member assembly to rewrite the volatile nation's constitution.

Ecuador to Fix Staple Food Price

Quito, Jul 23 (Prensa Latina) Ecuadorian Cabinet Minister Gustavo Larrea will issue a list of price for the family shopping basket due to the salesmen refusal to cut food prices.

The meeting with governors, majors, the police and members of the Consumers' Court will try and fix milk, chicken, rice and oil prices that suffered a recent unjustified rise.

The statesman reminded that Ecuador exports surplus rice to Colombia so the government will ban such exports until national sales price are stabilized.

He added that the litre of milk is paid at $0.30 cents and $0.32 cents, so he will not admit it at $0.60 cents at the market.

The new prices will be announced Tuesday if the traders reject President Rafael Correa's request to end speculation.

Ecuador tries novel balance of oil and environment

By Alonso Soto

EL COCA, Ecuador (Reuters) July 23, 2007 - Under pressure to preserve the environment while at the same time ease the poverty of his people, Ecuadorean President Rafael Correa has come up with an unusual solution.

Correa wants wealthy nations to pay Ecuador $350 million a year in exchange for leaving an estimated 1 billion barrels of oil under the ground in the pristine Yasuni rainforest.

"I think oil has brought us more bad than good," said Correa during a recent visit to the bustling Amazonian oil town of El Coca. "We need to do something about it."

Environmentalists around the world have celebrated the idea, apparently the first of its kind, as a way to preserve a delicate environment without creating an economic burden for the cash-strapped nation where six in ten people are poor.

The move come amid growing popularity of "carbon offsetting," in which first-world residents concerned about climate change make donations to compensate for the environmental damage their consumer habits cause.

But critics wonder if the politically unstable Ecuador, which relies on oil for nearly half of its export revenues, can keep this promise to the international community or whether authorities are trying to have their cake and eat it too.

CLIMATE CHANGE

The plan involves creating a trust fund for donations or accepting debt pardons from other countries or multilateral lenders like the International Monetary Fund.

The $350 million would constitute about half the annual revenues Ecuador thinks it could make from extracting oil from the field, partly located inside the 2.4 million-acre (982,000-hectare) Yasuni National Park.

Former energy minister Alberto Acosta has pointed out that all the oil in the Ishpingo-Tambococha-Tiputini field would only be enough for 12 days of global crude consumption.

Government officials say Norway, a group of Italian lawmakers and even one undisclosed oil company have inquired about the plan.

"It sounds ridiculous, but when you compare that money with Ecuador's foreign debt its actually a small quantity," said Matt Finer a scientist with U.S.-based environmental coalition Save America's Forests. "Rich nations have to chip in."

The Yasuni is home to species ranging from endangered white-bellied spider monkeys to rare jaguars that live alongside indigenous groups that live isolated from the outside world and still hunt with spears and blowguns.

Correa, a close ally of Venezuelan leftist President Hugo Chavez, has startled Wall Street by threatening not to pay Ecuador's $10.3 billion foreign debt. He is embroiled in a power struggle with Congress and opposition lawmakers who say he is scaring off oil investment.

He also openly backs a $6 billion lawsuit filed by indigenous groups who accuse U.S. based Chevron of polluting a large swath of the Ecuadorean Amazon.

DOUBTS ABOUND

The proposal's detractors say Ecuador cannot ensure the park's sanctity given political turmoil that has at times halted oil operations and has made Correa the eighth president in 10 years.

"Correa is asking the international community to dive in to see if there is water in the pool," said Daniel Erikson, an analyst with the Inter-American Dialogue, a Washington-based think tank.

Correa has said Ecuador will begin oil development next year if the government cannot secure the funds by then.

Even if Ecuador can promise to halt the contamination of multinational oil behemoths, it may struggle to control an equally serious contamination threat to Yasuni -- migrants already setting up farms and shantytown dwellings there.

But supporters of Correa's idea say the best way to limit the migration to the park is to ensure there are no oilfield jobs to draw them there.

"Oh God, what I wouldn't do to halt oil development," said Alonso Jaramillo, chief of eight rangers that watch over the park, roughly the size of Vermont. "I shake every time I hear about new oil development in my park."

Correa Lifts Ban on Sale of Shark Fins

July 20, 2007, from Washington Post

QUITO, Ecuador -- Ecuador's president overturned a ban on the sale of shark fins, which are popular in Asia, but stipulated they can only be sold if the sharks are caught by fishermen accidentally.

In a presidential decree Friday, Rafael Correa said the legalization of the sale of shark fins would help generate income for fishermen and added that shark fishing would remain illegal.

However, he did not say how authorities would determine if the shark had been caught accidentally or on purpose.

The 2004 ban had the "good intention of protecting sharks, but with absurd methods," a presidential statement said.

During the ban, the sale of shark fins was punishable by up to two years in prison.

Critics said the new measure will lead to increase shark catches.

Former Environment Minister Edgar Isch called it "a way to more easily evade any type of control" aimed at preserving species.

Sharks are protected in the Galapagos Islands _ Ecuador's top tourist destination _ where they play a key role in maintaining the archipelago's delicate ecosystem.

Intl Campaign against Ecuador Govt Censured

Quito, Jul 20 (Prensa Latina) Ecuador's MPD (Democratic Popular Movement) on Friday warned of the beginning of an international campaign to pronounce the government of President Rafael Correa unlawful.

MPD leader Luis Villacis denounced there are attempts to divert the national and international public opinion's attention in front of the demand Ecuador will make to Colombia over glyphosate fumigations.

He warned Colombia intends to make a scandal for the recent international seminar here entitled Problems of the Revolution in Latin America Latina, in which a document supporting the armed struggle of guerrilla groups was approved.

The Bogota protest is linked to the arrival in power of a leftist chief of State, and this is why "there is now a campaign to try to recognize the government of Rafael Correa as illegitimate," Villacis stressed.

The MPD leader did not rule out that Correa's life is in danger, as Washington fears the advance of the leftwing in the region.

Villacis recalled there are also internal attempts to destabilize the executive, with the alleged lack of gas and rise of food prices.

Ecuadorean president appoints new petroleum and mines minister

People's Daily Online, July 20, 2007
Ecuador's President Rafael Correa on Thursday named lawyer Galo Chiriboga as new petroleum and mines minister.

"I will take office on Monday," Chiriboga told media.

He replaces Alberto Acosta, who was labor minister during the 2005 to 2006 presidency of Alfredo Palacio and has also been president of the state energy company PetroEcuador.

Chiriboga's job will include renegotiating the contracts between PetroEcuador and foreign oil firms to give the country a greater stake.

Source: Xinhua

Ecuador, Venezuela: Joint Oil Refinery Venture

July 19, 2007, Stratfor
Venezuelan state-run oil company Petroleos de Venezuela and Ecuador are planning a joint venture to build a $5 billion oil refinery as one of the first projects funded by the Bank of the South, Ecuadorian interim Energy Minister Jorge Alban said July 18. Alban added that Ecuadorian President Rafael Correa is waiting for feedback from Ecuador's Solicitor Office in order to define a legal framework for the partnership before beginning the project, which is expected to take five to six years to complete, including a year of assessments.

Speculation Wave to Destabilize Ecuador

Quito, Jul 19 (Prensa Latina) Ecuadorian Agriculture minister, Carlos Vallejo, affirmed that increased prices of some food products, such as milk and rice is aimed to destabilize the national government.

“There is proven provocation,” against the president, Vallejo informed, blaming industry groups for this situation.

He explained that last week he held talks with the milk company bosses and a day later “arrogantly demonstrating that they can do what they want,” they upped the price of this important product.

This is proof that they “want are moving against government policy” by raising the price of milk to 60 US dollar cents.

The official added that there is no justification for a rise in rice prices as production in the country was very high.

He warned that if face of this speculation wave and rise in costs of basic food products, the country’s president, Rafael Correa, has the legal authority to set prices, “in cases of extreme necessity.”

Although there are no rules governing the free market, Correa can adopt measures when increases are not justified, he concluded.

According to the Consumer Tribunal, rises between 25 and 50 percent affect products of basic needs, such as rice, oil, meat and milk as well as vegetables.

INTERVIEW: Ecuador's Correa: US no longer "Satan" for Latin America

via EUX.TV, July 18, 2007
By Fernando Heller, dpa
Eds: dpa exclusive

Brussels (dpa) - Ecuadorian President Rafael Correa believes that Latin America still faces the challenge of building "true democracy," but he admitted that the United States is no longer the region's "Satan."

"What we have are formal democracies, fragile like plasticine," Correa, 44, said in an interview with Deutsche Presse-Agentur dpa. "It is true that we have been holding elections for 20 years, but having a democracy is something quite different."

An economist who met his wife, Anne Malherbe, in Belgium during his postgraduate studies there, Correa was on a private visit to Brussels.

"Look at what happened in our countries a few years ago: you could say any awful thing you wanted to win the election, and the following day you did exactly the opposite, and people were stuck with that person for four years," he said.

In January, the populist Correa became Ecuador's eighth president in 10 years, with a reform programme that includes a constituent assembly to thoroughly reshape the oil-rich country's institutions.

He belongs to a generation of left-wing politicians who have risen to power in Latin America in recent years, along with Evo Morales in Bolivia and the firebrand Hugo Chavez in Venezuela, or the less controversial Luiz Inacio Lula da Silva in Brazil and Nestor Kirchner in Argentina.

Correa sees himself and other leaders in the region as representatives of the "new, Latin American-style socialism."

"We are part of that current denominated 21st-century socialism," he said. "We agree with traditional socialism on the supremacy of labour over capital, for example."

Correa lamented that over the last two decades, Latin America has suffered "a total subjugation of lives, people and human labour to the need to accumulate capital."

He complained about changes that made labour markets more flexible for the sake of growth, while workers suffered lower wages and a loss of stability.

In opposition to such changes, Correa emphasized socialist traditions such as "the importance of collective action" to overcome what he called "the myth - closer to religion than to science - that individualism is the engine of society."

Correa advocates stronger central governments to fight inequality in Latin America.

"I want to make it very clear that we are not proponents of statism," he said. "However, it is absurd to think that the smaller the state, the better, and thinking that takes you nowhere, especially in societies like Ecuador's with so many inequalities. Minimizing the state in Ecuador would be catastrophic."

Correa is quick to distance himself from Soviet-style socialism.

"How do we differ from traditional socialism? For example, in that well into the 21st century, nobody can imagine nationalizing the means of production," he said.

"But what we do want is to have millions of owners, to democratize the means of production, and even more so in countries like Ecuador, where 1 per cent of the population has shares in firms. Ecuador's capitalism is only for an elite."

Latin American development been thwarted, Correa argued, by factors including "a wild populism which benefited capital."

"But the peoples of Latin America have also had to bear appalling economic policies or extremely high levels of corruption, precisely as a consequence of a disastrous economic management," he said.

Compared to the inflammatory rhetoric of Chavez, for example, Correa was mild in his evaluation of US influence but unrelenting toward multilateral organizations including the International Monetary Fund (IMF) and the World Bank.

"The United States is no longer a Satan for America, but if we want to achieve an egalitarian world, it's impossible with the IMF or the World Bank. Without them it is perfectly possible," he said.

"That is why one of our great missions is to neutralize the influence that those organisms have in Latin America. I personally expelled the World Bank's representative in Ecuador for the abuse and blackmail he committed in the country. For reforming a law, as a sovereign country, they took away a loan which had already been granted to us. That is unacceptable."

Ecuador to support migrants returning from Spain

From People's Daily Online, July 18, 2007
Ecuador will develop a plan to support Ecuadorian migrants who want to return from Spain, helping them set up their own businesses, Foreign Minister Maria Fernanda Espinosa said Tuesday.

Fernanda, who accompanied Ecuadorian President Rafael Correa during last week's visit to Spain, told a press conference that the plan had been piloted by Spain's Emigration Ministry.

Ecuadorian emigration soared in 1999, when the nation suffered its worst ever financial crisis. Spain was one of the main countries to host Ecuadorian migrants.

The Ecuadorian plan aims to help citizens return home with the machinery and equipment they are currently using in their businesses overseas, and then help them set up businesses in their home country.

Fernanda said she would work with the customs department to work out strategies to reduce charges on the machinery.

Correa has described emigration as a "national tragedy" caused by bad policies applied by a variety of governments over the last 20 years.

Source: Xinhua

ATFA Releases YouTube Default Video on Danger of Ecuador Following 'the Argentine Precedent'

via Earthtimes

WASHINGTON, July 17 /PRNewswire-USNewswire/ -- Today, American Task Force Argentina (ATFA) unveiled a new YouTube video message from ATFA Co-chair Dr. Robert Shapiro addressing the dangers of Ecuador's threat to default on its sovereign debt following meetings with invited officials from Argentine President Nestor Kirchner's Finance Ministry.

The video comes shortly after Ecuadorian President Rafael Correa repeated his willingness to default on his country's "illegitimate" debts and "aggressively renegotiate" with international bondholders. In the video Shapiro warns not only of what debt defaults and irresponsible restructurings can do to undermine national economies, but also explains the impact on international lending as a whole:

"The result was entirely predictable: Argentina has been excluded from international capital markets until she honors her obligations, and foreign direct investment has slowed ... The ultimate result could well be turmoil in international bond markets and economic reverses in parts of the developing world."

To view the full video and read a transcript of Dr. Shapiro's remarks, please visit ATFA's website at: http://www.atfa.org/ or http://www.youtube.com/user/ATFAdotorg. On Wednesday, July 11, ATFA ran a full-page ad in Washington, DC's Roll Call newspaper urging the US Congress to stop "Argentine-style economics" from tainting other Latin American economies. Ecuador's default would again force American and global investors -- and the people of Ecuador -- to pay too high a price. The dominos of the "Nestor Precedent" cannot not be allowed to fall. To view the recent ad ATFA placed in Roll Call on the danger of the Argentine precedent, click here http://www.atfa.org/ATFA_Dominos_RC_HRrev.pdf.

ATFA, through a variety of events and research initiatives, works to encourage the United States government and other Argentine debt stakeholders to take action on behalf of American taxpayers, businesses and bondholders. ATFA's website, http://www.atfa.org/, serves as a clearinghouse for news and information related to Argentina's restructuring and the ATFA's efforts.

Made up of major creditor groups, the ATFA is co-chaired by The Honorable Robert J. Shapiro, former Under Secretary of Commerce for Economic Affairs in the Clinton Administration, and Ambassador Nancy Soderberg, Ambassador at the U.S. Mission to the United Nations in New York from 1997 to 2001.

For additional information, please visit our new website at http://www.atfa.org/, or contact media@atfa.org, or +1-888-662-2382. American Task Force Argentina

CONTACT: American Task Force Argentina, media@atfa.org, +1-888-662-2382

Web site: http://www.atfa.org/

Free Market Empties Ecuador Shelves

Quito, Jul 17 (Prensa Latina) Price increases in agricultural and dairy products generate Tuesday uncertainty among people who demand the Ecuadorian government curb excessive hikes.

Latest reports reveal an increase between 25 and 50 percent of rice, milk, root and other vegetables in the country's markets, reducing possibilities of purchase for people.

According to fruit and vegetable traders, climate changes have caused rain and temperature drops in zones of La Sierra and Costa, which increased cost of those products.

Faced with this situation, the government was incapable of boosting actions to curb excessive increments, because there is no law that controls those prices.

Agriculture Minister Carlos Vallejo stated that the free market model is followed by Ecuador, so the State lacks regulations to face these rises.

Support Ecuador’s Milestone No-to-Oil-Exploration Proposal

From Toward Freedom Written by Rune Geertsen

Tuesday, 17 July 2007

What does a poor government do when it finds an oil treasure in a protected natural park? Does it choose profit, and therefore the pollution and the cultural extinction of indigenous people that goes with it, or does it leave the oil in the ground and wave goodbye to millions of dollars that could be spent fighting poverty? Ecuador is right in the middle of this dilemma after having discovered oil in the Yasuní National Park in the heart of the Amazon. It is one of the areas with the highest degree of biodiversity on the planet, and there are at least two indigenous groups living in voluntary isolation from the rest of society. But under the rainforest, a reserve of oil is hidden, a reserve that has been calculated to bring Ecuador an income of some 700 million dollars a year for ten years. Earlier, Latin American governments have not hesitated more than seconds before choosing the oil – and the destruction. But Ecuador’s new president, Rafael Correa, has presented an eye-opening proposal that deserves support: Ecuador will leave the oil in the ground if the world will pay half of the country’s lost income. The logic behind the proposal is that it is in the whole world’s interest to preserve the Yasuní’s untouched rainforest. Less oil exploration equals less carbon dioxide emissions. It means non-destruction of fragile biodiversity, and it means that indigenous peoples that have chosen to live as their millenary ancestors in the rainforest get to continue living this way in peace. But the solution is expensive for a country where half of the population lives in poverty and has a foreign debt of 15 billion dollars – a debt that in most cases was created by corrupt governments and military dictatorships. “Ecuador does not ask for charity. But we do ask the international society to take part in this sacrifice,” Raphael Correa has said about the proposal. This is, in other words, a very concrete example of ‘global public goods’ that the world society has a responsibility for, but costs money to ensure. Ecuador seeks to ensure the life of Yasuní National Park through direct donations from foreign governments, aid agencies, NGOs and individuals – and through debt cancellation. This is not just a poor country trying to blackmail rich countries; over 180 countries have ratified the UN convention on biological diversity (only the US has signed but not ratified it) which states that biological diversity is “a common concern of humankind.” It is very important that western countries support this proposal, and for instance discuss it in the Paris Club where foreign debt is negotiated. The government of Norway has shown interest in supporting the plan, and a leading American environmental scientist from the University of Maryland has called the proposal “a milestone.” But if Ecuador does not succeed in getting the world’s help, Correa has said there is no other option for the country than to start drilling. Ecuador has given the world a year to decide. Here is a concrete possibility for governments to let actions follow words and support a progressive global environment policy. The amount of oil in the Yasuní Park amounts to what the world consumes in 12 days. But the value of protecting and preserving the Yasuní Park and all of its biodiversity is irreplaceable. Read more about the proposal and campaign at www.sosyasuni.org Rune Geertsen is journalist and information advisor for the Danish NGO IBIS which works in Ecuador supporting indigenous peoples.

Censured Ecuador Minister Will Not Quit

Quito, Jul 16 (Prensa Latina) Ecuador's Economy Minister Ricardo Patino said Monday he will not resign and will remain at his job as long as he relies on the full backing of President Rafael Correa.

The congressional censure of my behavior was a complete farce, as there is no shadow of proof of any speculation with the 2030 bonds in February, he told local TV.

The minister said it is a pleasure to serve our country and that he is willing to account to any institution, as he did previously to the Legislature and its Supervisory Committee.

Nevertheless, he clarified he would not take part in any kind of political show, such as the one last week in Congress, to judge him without any evidence.

I would only attend a truly impartial trial, such as with the Attorney General or the Supreme Court, but not in Congress, with its damaged prestige, he added.

He denied local media reports that he had traveled to Venezuela 18 times in the last two months, pointing out he went only two or three times to boost projects of integration and of interest to both countries.

Patino also stressed he visited Brazil, Chile, Argentina and Peru to make progress on creation of the Bank of the South.

Ecuadorian Gov't for Socialism

Economy Minister Ricardo Patino

Quito, Jul 16 (Prensa Latina) The Ecuadorian government currently moves forward the construction of a 21st century's socialism, solidary in the country and nothing will take it back, Economy Minister Ricardo Patino stated.

"The executive has the commitment to put the national economy at the service of people, of the most vulnerable class," said Patino in a speech broadcast by the national TV channels.

He pointed out that the most important thing is the social aspect, but highlighted the need of making transcendental changes in the legislation, so the State budget benefits all Ecuadorians.

The minister talked of a law imposed in 2002 by the International Monetary Fund that prohibits investing more resources in health, education and social welfare.

Patino advocated for reforming the law and fulfilling people's mandate so that the fund destined to those spheres grow over $200 million next years.

The official stressed the wish of reducing the amount destined to pay off financial obligations and stated that from each $100 of the budget the country will pay $25 this year and expects to use $12 in 2010.

Push for more mining stirs debate in Ecuador

AS GLOBAL DEMAND FOR METALS SOARS, MINING COMPANIES SEEK TO UNEARTH ECUADOR'S RICHES, STIRRING PROTEST FROM ENVIRONMENTALISTS

BY CARLA D'NAN BASS

Special to The Miami Herald, July 16, 2007

CUENCA, Ecuador --

According to the legend of Llanganatis, a curse put on gold and other artifacts gathered in the 16th century to ransom Inca chief Atahualpa from the Spanish conquistador Francisco Pizarro has prevented generations of adventurers from ever finding Ecuador's hidden treasures.

But now big-time mining companies may be about to export the region's wealth -- not Atahualpa's treasure, but gold and other valuable metals still in the ground.

A booming international metal market is hungry for any reserves, including Ecuador's estimated 1.5 million metric tons of mainly gold, silver and copper. Exports could reach $4 billion annually, according to some industry estimates -- about two-thirds the value of oil exports, Ecuador's current main money maker.

International mining companies including Corriente Resources, Iamgold Corp. and Ascendant Copper have explored and say they are ready to begin producing in their concession areas.

CHANGE IS IMMINENT

''Ecuador is at a transition point in mining,'' Vice Minister of Mines Jorge Jurado said. ``We are facing the imminent possibility of large-scale mining.''

Now, less than 1 percent of Ecuador's gross domestic product is generated by small and medium-scale miners now operating in this small Andean country. And this number includes miners' production of nonmetals such as construction materials.

But some Ecuadoreans consider the prospects for large-scale mining another curse, especially since the sought-after metals are lying under one of the most biodiverse topographies in the world.

Around the southern highland city of Cuenca, Indians and other local activists blocked roads and clashed with police off and on throughout most of June, and organizers said they plan to regroup soon. The most radical want all large-scale mining concessions canceled, while others want them suspended until more studies are conducted.

Sitting at one intersection blocked by a barricade of burning tires, 48-year-old grandmother Inez Cochancela squatted on a curb, smoothed her traditional indigenous embroidered skirt and explained her opposition. She and about 200 other locals were making a last stand near the small community of Victoria del Portete outside of Cuenca after police drove them from other protest points.

''One of the few things we poor people have is water,'' she said. ``Mining will damage that.''

This type of opposition has prompted the leftist government of President Rafael Correa to launch a review of the country's 4,112 mining concessions -- most not producing -- totaling about 2.8 million hectares.

The government also has rejected environmental impact studies, necessary to begin production, for Corriente Resources and Ascendent. In addition, officials plan to propose reforms to the existing mining law to increase the state's take from the income and place more restrictions on the industry.

Some mining representatives who accuse the government of siding with protesters have said they agree that the industry needs reform, even regarding the issue of government revenue. But they accuse activists of whipping up exaggerated fears and point to the jobs mining would create in the impoverished areas.

''Modern mining is compatible with environmental and social concerns,'' said César Espinosa, president of the Ecuadorean Chamber of Mining. ``This is a new type of mining which the country has not yet experienced.''

But many communities have had bad experiences with less controlled small-scale mining and clumsy attempts at community relations by big mining companies.

''These conflicts are the fruit of some bad practices of mining companies until now,'' said Patricio Vargas, president of the Cuenca Mining Chamber. ``You can't just show up with candy and soccer balls at the schools. You have to have a serious proposal for community development.''

GREEN PROMISES

Correa, seen as a ''green'' president when he took office in January, promised not to repeat the same environmental and community relations mistakes that occurred with oil, the country's most valuable export. The oil-producing Amazon region is the site of constant conflict between locals and oil companies.

The Correa government had proposed creating a new model of community relations through a ''national mining dialog,'' but street protests indicate it is not working.

''This dialog should have taken place in the 1980s, before this started,'' said Lina Solano, leader of the more radical band of opponents in Cuenca. ``We want Ecuador to be declared a country free of large-scale mining.''

Correa has ruled out canceling concessions, however, and ordered police to remove protesters blocking roads.

REPERCUSSIONS

Although increased income from mining could help finance his populist campaign promises, if current laws are reformed, Correa could take a hit on popularity.

His administration's green credentials already suffered with the recent resignation of Energy Minister Alberto Acosta, who clashed with state oil-company officials over his plan to block the development of oil fields in a national rain-forest park.

Acosta had also promised to prohibit mining in areas where it causes social conflict. Protesters seem to have noted that last point.

''We are going to talk to the government,'' said Carlos Pérez, a lawyer and leader of Cuenca's less radical opposition group, which focuses on protecting water supplies. ``But if that does not work, we will protest with even more force.''