Ecuador on the Cusp

by James Petras / September 6th, 2007

From Atlantic Free Press

Ecuador today faces great opportunities for a basic social transformation and also grave threats from imperial networks.

In the recent period, popular social mobilization of urban and rural popular classes (workers, peasants, Indians, public employees, urban barrio militants, teachers and street venders) have succeeded in overthrowing neo-liberal presidents, discrediting a corrupt and reactionary congress, and rejecting the traditional oligarchical electoral parties. A vast independent mass movement has become the axis of a new power configuration demanding the complete and total nationalization of the petroleum industry, a profound comprehensive agrarian reform, the re allocation of government revenues from foreign and domestic debt payments to the financing of extensive health, education and employment programs. Fundamentally the movement is calling for a re-distribution of income, property and credit from the ruling oligarchy to the eighty percent of the population that is excluded and exploited.

The election of President Rafael Correa was based on his repudiation of the agreement giving the US a military base in Manta, and his populist demands for national control of the petroleum industry, his promise of sweeping re-distributive income and property reforms and questioning of the foreign debt.

The Correa regime's promise of structural transformation has not been followed by concrete action – in part because of the opposition of Congress and his 'ambiguities' in following up his policy pronouncements. What the Correa regime has accomplished is the continued mobilization of the majority of Ecuadorians in favor of holding elections for a new constituent assembly, which will draw up a new constitution and presumable lay the political foundation for a social transformation.

The key threat to the unfolding transformative political process comes from three interrelated centers of power. US imperialism, the center of world counter-revolution operating through its military, economic and political apparatus, has been a major actor in collaboration with sub-imperial powers like Brazil and Colombia, the Ecuadorian oligarchs and their parties, and local 'non-governmental organizations (NGOs)'.

US imperialism operates through a network of client states, collaborator regimes, multinational corporations, NGOs and local political elites. It is a mistake to simply reduce the imperial threat to the White House, Pentagon, CIA or the Occidental Petroleum Company. They are important actors, but only a part of the imperial architecture, which threatens the process of change in Ecuador.

One equally important aspect of the imperial power configuration are the political and economic networks which complement, collaborate and share in the riches of empire. Today, with the US Empire tied down with two prolonged costly and unpopular wars in Iraq and Afghanistan, and facing severe challenges in Latin America from the anti-imperialist government of President Hugo Chavez, Washington is obligated to rely on client and sub-imperial regimes in Latin America to maintain its influence.

The major political-economic sub-imperial ally of the United States in Latin America is the reactionary neo-liberal regime of Brazilian President Lula Da Silva, allied with the fraudulently elected right-wing Calderon regime in Mexico, another declared advocate of the 'free market'. Through energy agreements with President Bush and recently signed investment contracts with the oligarchic regimes in Panama, Honduras and El Salvador, the Lula regime looks to create an ethanol political axis in the Western Hemisphere. Lula, through the instrument of the public-private petroleum enterprise, Petrobras, has been deeply involved in exploiting the energy resources of Bolivia. Both pressured the Morales government to sell gas and oil at below-world market prices. Equally important, Petrobras-Lula recently signed a 'joint exploitation agreement' to explore and exploit known petroleum deposits off the Mexican coast, thus violating the Mexican constitution which gives the state exclusive rights of oil exploitation.

Beginning in the 1990's, under ex-President Cardoso, Petrobras was privatized through the sale of its stock on Wall Street. Since Lula's election, 50% of Petrobras stock is owned by foreign investors – the great majority on Wall Street. Petrobras is 'state in form' but private in content. Petrobras functions and acts exactly as any of the major private petroleum companies. However in addition, Petrobras is a powerful political actor which dictates Brazil's foreign economic policy. When Petrobras refused to re-negotiate its oil and gas agreements with President Evo Morales, they secured the backing of the Lula regime despite his protestation of 'friendship' and 'support' for Morales' reformist program. Petrobras secured the backing of the entire Brazilian mass media, the reactionary chauvinist sectors of the Workers Party, as well as the traditional oligarchic political parties and Congress.

Petrobras' strategy in Bolivia was not only to secure low tax and royalty payments to the Morales government but to destabilize and undermine the legitimacy of the elected government. Internationally Petrobras was the leader of the international oil and gas companies resisting Morales' efforts to re-negotiate the petroleum and gas contracts as demanded by his electorate and promised during his campaign. The Financial Times and the Wall Street Journal, the White House and the European Union, especially Spain supported Petrobras' efforts to undermine Morales' public-private joint ventures, falsely referred to as 'nationalization'.

Over the past 40 years, several Mexican neo-liberal presidents have proposed to change the Constitution to allow for foreign exploitation of Mexican oil. In August 2007, Petrobras and Lula proposed to the fraudulently elected neo-liberal 'President' of Mexico Calderon, a 'joint venture' exploiting Mexican oil. In other words, Lula and Petrobras proposed to subvert seventy years of Mexican national state ownership of petroleum, which earns over 40% of Mexican tax revenues. Petrobras' 'offer' would open the door to the privatization of the entire Mexican petroleum industry (PEMEX), something US imperial policy makers have been pursuing unsuccessfully for decades. In other words, Petrobras acts for and with the interests of its US private stockholders, Wall Street and the White House. For those reasons, it is a serious mistake to refer to Petrobras as a 'Brazilian state enterprise".

Empire Building Depends on Overseas Collaboration

All world empires depend on recruiting subject states, private capitalist collaborators and overseas mercenary armies to run their empire. In the 19th and 20th century over three-quarters of the British imperial army was made up of colonial mercenary soldiers; two-thirds of its colonial civil service were subject peoples; most local rulers were tribal, landlord, merchant and/or 'upper class' collaborators. Today, the US ruling class can only sustain the empire through local rulers – such as Alan Garcia in Peru, Bachelet in Chile, Uribe in Colombia, Calderon in Mexico, Vazquez in Uruguay and Lula Da Silva in Brazil. The US empire depends on the collaboration of the military general staff, the Central Bankers, the diplomatic elites and the business, banking and landed elite of its client and junior partners. Without these collaborators groups, the US Empire would face endless civil wars, popular uprisings and the disintegration of the political stability necessary for private investment and exploitation.

The cases of US wars in Iraq and Afghanistan are very relevant: Having destroyed the economy and state via direct military invasion, Washington is without reliable and sustainable local collaborators. Forced to rule directly, Washington faces the prospect of an un-winnable prolonged anti-colonial war.

Empire and Resistance: Washington versus Caracas

Latin America today is polarized into four blocs: a diverse revolutionary bloc of guerrillas and social movements ranging from the FARC to the MST; a radical social and national bloc made up of Venezuela, Cuba, the Polo Democrático in Ecuador; a center-left bloc including Correa of Ecuador and Morales in Bolivia and a rightist neo-liberal bloc of Brazil, Uruguay, Colombia, Peru, Mexico and Chile.

US imperial strategy relies on its collaborator states on the right to confront the revolutionary and radical left and to pressure and subvert the center-left.

Washington exploits the contradictory nature of the Correa and Morales governments, while Chavez tries to strengthen their public and national sectors. Both the Correa and Morales governments contain nationalist and neo-liberal sectors; both governments speak to national and popular demands and open spaces for mass organizing, at the same time as they sustain the existing structures of wealth and property. Both governments face pressure from the upper class and the US to freeze the process of change. On the other hand, the mass movements pressure the governments to proceed with the real nationalization of strategic sectors, like petroleum, gas, minerals, banks and land.

The signposts of radicalization are clear: Enrique Correa received 22% of the vote in the first round of the Presidential elections, 54% in the decisive second round and over 82% in the subsequent referendum to convoke a constituent assembly. The decay and profound disintegration of all the traditional parties opens the way for new political forces. In the face of this historical opening, this 'time of change', a new alliance of trade unionists, Indian militants, movement leaders and ecologists has formed the Polo Democrático (the PD). The Polo has provided a concise strategy and program for the elections to the constituent assembly ('Nuestro Camino Para una Constituyente de Plenos Poderes'). The political agenda of the PD calls for a total rupture with the elite traditional party dictatorships and the transformation of the Constituent Assembly into the legislative arm of the peoples' movement. The heart of the struggle is to establish popular sovereignty – and the expropriation and transfer of basic resources, in particular the petroleum and energy sector, to popular self-management. As the leaders of the PD recognize, the struggle for national liberation and against imperialism in Ecuador, requires the confrontation and expropriation of European, North American and Brazilian multinational corporations and the dismantling of the political structures of the neo-colonial state. By necessity, given the structure of Ecuadorian capitalism and the inter-connection between the Ecuadorian oligarchy and foreign capital, the struggle against imperialism and its local collaborators becomes at the same time an anti-capitalist struggle. This book not only provides a brilliant diagnosis but also sets out the intellectual and political strategy to revolutionize Ecuadorian society and economy.

James Petras, a former Professor of Sociology at Binghamton University, New York, owns a 50-year membership in the class struggle, is an adviser to the landless and jobless in Brazil and Argentina, and is co-author of Globalization Unmasked (Zed Books). His latest book is The Power of Israel in the United States (Clarity Press, 2006). His forthcoming book is Rulers and Ruled (Bankers, Zionists and Militants (Clarity Press, Atlanta). He can be reached at: jpetras@binghamton.edu. James's website http://petras.lahaine.org/.