Cuba's Raul Castro meets with Ecuadorean vice president

May 26, 2007.
HAVANA (AP via PR-inside) Acting Cuban President Raul Castro met with Ecuador's vice president to discuss ways to strengthen already warm relations between the two countries, state media reported Saturday.

The Communist Party newspaper Granma said Lenin Moreno spoke with Castro on Friday afternoon, discussing bilateral issues and «other topics of interest to the situation in Latin America and the rest of the world.» It provided few further details.

The Ecuadorean vice president expressed his admiration for Fidel Castro, who stepped down in favor of a provisional government headed by his 75-year-old brother Raul in late July.

«All Ecuadoreans are ... aware that his health is improving,» Moreno said of Fidel Castro. «May he recuperate, not only for the benefit of his people, the Cubans, but for the spirit of all of Latin America.»

The 80-year-old Fidel has not been seen in public since announcing he had undergone a series of emergency intestinal surgeries and was temporarily stepping aside. His condition and exact ailment remain state secrets, though top officials have insisted for months that he is improving.

Cuba's convalescing «maximum leader» has signed 12 written essays in recent weeks, releasing one Friday that slammed U.S. President George W. Bush for securing funding from Congress to continue the war in Iraq without setting a timetable for troop withdrawal.

Ecuador President Rafael Correa is a Castro supporter who has said he'd like to come to the island and meet with the Cuban leader while he recuperates. 

Extortion or global warming mitigation? - Ecuador looks for payments to leave oil in the ground

Mongabay, May24, 2007
Marketwatch reported more details on Ecuador's proposal to forgo development of Amazonian oil fields in exchange for payments from industrialized nations.

Last month Ecuadorian President Rafael Correa said that if the South American country is compensated with half of the forecasted lost revenues, it will not exploit oil in Yasuni National Park, setting aside the area for wildlife and indigenous people. Correa said the cost would be about $350 million per year for 30 years. Ecuador would earn about $700 million per year if the fields were developed.

In a conference call Wednesday with the University of Maryland, Ecuador's Energy Minister Alberto Acosta provided additional details on the proposal.

He said developing the Ishpingo-Tambococha-Tiputi or ITT oil fields, believed to hold 900 million to one billion barrels of oil equivalent, would release about 108 million tons of CO2 and require more than $4 billion in cleanup costs. He noted that development of the field is expected to require at least $5 billion in investment.
Acosta said that Italy, Norway, the Inter-American Development Bank, the United Nations and universities in the United States have expressed interest in the concept. Ecuador will wait up to a year for the international community to respond to the overture.

Acosta said that the aid money would go into a trust fund that would be managed by an "international oversight body". Ecuador presently has more than $18 billion in external debt according to the CIA.

Oil operations in the Ecuadorian rainforest have been controversial since American oil giant Texaco (now a subsidiary of Chevron) entered the region in 1958. Environmental groups and indigenous rights' organizations said Texaco's oil exploitation caused widespread pollution and environmental damage and blames the firm for high rates of cancer among local populations. Chevron is currently facing a $6 billion lawsuit on behalf of more than 30,000 affected people.

"The first option is to leave that oil in the ground, but the international community would have to compensate us for immense sacrifice that a poor country like Ecuador would have to make," said President Correa, as reported by the Environmental News Service (ENS), in an April radio address. "Ecuador doesn't ask for charity, but does ask that the international community share in the sacrifice and compensates 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."

CITATION: -- (2007) "Ecuador Seeks Compensation to Leave Amazon Oil" ENS. April 24, 2007.

Mercedes Alvaro (2007). "Ecuador proposes massive debt swap to avert development of ITT oil fields" MarketWatch. May 24, 2007.

Ecuador proposes massive debt swap to avert development of ITT oil fields

By Mercedes Alvaro

May 24, 2007

QUITO (MarketWatch) -- Energy Minister Alberto Acosta Wednesday proposed a massive debt swap to avoid developing Ecuador's Ishpingo-Tambococha-Tiputi or ITT oil fields.

"One of the options to leave the crude underground is to carry out a massive bilateral debt swap, government-to-government, with the Paris Club and even with multilateral lending bodies," said Acosta during a teleconference with the University of Maryland.

The Rafael Correa government originally said it would require $700 million a year from the international community to not develop the ITT. It subsequently reduced that amount to $350 million a year for 30 years.

Many environmentalists don't want the ITT to be developed because it is located inside the Yasuni National Park.

According to Acosta, developing the ITT would generate 108 million tons of CO2 and the cleanup will require more than $4 billion.

Acosta formally invited the international community, countries and organizations that defend the environment and seek to combat global warming to support the proposal.

If the international aid is forthcoming, the country will create a trust fund that will be managed by an international oversight body.

Any interest that is generated will be used to fund social development works.

According to Acosta, countries like Italy and Norway, as well as international foundations, the Inter-American Development Bank, the United Nations and universities in the United States have voiced interest in the Ecuadorian proposal.

Italian lawmakers, said Acosta, are interested in pushing for a law that would allow citizens and companies to receive an income tax break by buying certificates representing non-exploited barrels.

In April, Acosta said that the government would wait up to a year for the international community to respond.

The minister has also said that if the country's idea falls through, the ITT field could be jointly developed with PdVSA, which would take a 40% share of the crude produced.

Other companies interested in developing the ITT field are China's China Petroleum & Chemical Corp., or Sinopec, Chile's Enap and Brazil's Petroleo Brasileiro SA , or Petrobras. Those countries have signed a memorandum of understanding with state-owned Petroecuador to develop the field. Energy companies from India, Vietnam and Colombia have also expressed interest.

According to the most recent official estimates, developing the ITT field will require at least $5 billion in investment.

Ecuador wants money to leave oil reserves untapped

Monstersandcritics, May 23, 2007

New York - Ecuador wants to keep the Yasuni National Park's rich biodiversity and its estimated 900,000 barrels of oil untouched, if the world can provide 350 million dollars a year for health and educational programmes to the indigenous people living there.

So far, there have been no takers.

'We are interested in biodiversity. We are not thinking of owning money, and life is more important than money,' said Cecilia Velasque, clad in colourful, traditional dress and a black hat at the United Nations Permanent Forum on Indigenous People at UN headquarters in New York.

There are more than 300 million indigenous people around the world, as recognized by the UN General Assembly. Once a year, their representatives meet in New York to demand their rights, often criticizing governments for failing them.

Velasque said there are four indigenous nationalities living in Yasuni National Park, grouping about 1,500 people. The government says that indigenous people form about 8 per cent of Ecuador's population, but Velasque and her people claim 30 per cent across the country.

At the indigenous conference at the UN, Ecuadorean government official Lourdes Tiban called on the international community to provide 350 million dollars to compensate for leaving the Ishpingo- Tiputini-Tambococha (ITT) oilfield unexploited. Drilling for oil could threaten the rich biodiversity.

UNESCO, which is trying to save the world's natural treasures by designating world heritage sites, declared the Yasuni park a 'biosphere reserve' in 1989.

'If the world truly is interested in saving the planet, the government of Ecuador has decided to sell the oil, but keep it in the ground,' she announced. 'Ecuador is now looking for financial resources from the international community that compensates the nation for not exploiting the oil.'

'I call on the United Nations agencies, member states, intergovernmental organizations and NGOs to consider Ecuador's proposal,' Tiban said.

Ecuador's efforts to preserve its eco-systems under the government of leftist President Rafael Correa have received support from US- based conservation groups.

'We now have an unprecedented opportunity to work with a progressive administration (in Ecuador) in order to save one of the greatest spots on earth,' said ecologist Matt Finer of Save America's Forests in Washington.

'What are urgently needed now are viable proposals from the international community to President Correa.'

Max Christian of the Sustainable Development and Conservation Biology programme at the University of Maryland said, 'This presents a landmark opportunity to sequester up half a billion tons of carbon dioxide while conserving Yasuni's astounding biodiversity and cultural heritage.'

Bordering Ecuador, Peru also has significant oil reserves and apparently is looking for a deal similar to Ecuador's proposal.

Finer said that the fight to exploit Ecuador's oil reserves has pitted the government, particularly the Energy Ministry, against four oil companies that have obtained licenses to drill: Petrobas of Brazil, Sinopec of China, PVSA of Venezuela and ENAP of Chile. Those companies have been told to hold on to their drilling plans until the government decides how to proceed.

Ecuador, one of the world's poorest nations, has external debt of 15 billion dollars owed to the World Bank and the Inter-American Development Bank. Half of its 13 million people live in poverty.

The Yasuni park is considered one of the world's most biologically rich regions. It shelters numerous important mammal species including the endangered Amazon tapir and at least 10 monkey species.

The indigenous tribes - the Waorani, Tagaeri, Taromenane and Zapar - living in the park are completely dependent on the rainforest for survival. They say that their lives would be completely disrupted if the oil field is opened for exploration.

Correa Denounces Destabilizing Attempt

Quito, May 22 (Prensa Latina) Ecuadorian President Rafael Correa denounced on Tuesday the opposition efforts to destabilize his government, trying to involve Minister of Economy, Ricardo Patino, in acts of corruption.

They are trying to discredit the Executive, noted Correa while reiterating that "Patino is innocent."

He explained that two weeks ago he requested the Minister of Economy to dismiss Quinto Pazmino, one of his aides, due to a series of allegations for acts of corruption.

Correa said that Pazmino "tried to extort money from us, and we rejected it." Now he is presenting mutilated videos without even investigating, he added.

"We had the videos taped, precisely to detect these cases of corruption and show how these people are used to manipulate the market," he explained.

Correa said that Patino is in Paraguay, attending a meeting to create the Bank of the South and tomorrow, when he returns home, "he will clarify this new disgrace."

He called on the people to stay calm, "as this is a tactic to make us lose faith and prevent the changes we want to make."

Correa: Scandal Video Is Distortion

Quito, May 22 (Prensa Latina) The Ecuadorian government faced down its first scandal Tuesday after excerpts of a videotape were broadcast purporting to accuse Ecuadorian Economy Minister Ricardo Patino of speculation with payment of foreign debt obligations.

Ecuador s President Rafael Correa responded to the broadcast by revealing he had ordered Patino to video a conversation with financial representatives to illustrate how corruption works, and that the complete tape is ready to be seen.

The president declared that the opposition tried to involve Patino in an act of corruption and thus create instability in the Executive branch.

"He tried extortion and we rejected him, but now mutilated videos are shown without investigation," said Correa referring to a supervisor of Patino, named Quinto Pazmiño, who delivered the videotape to a television channel.

In statements to the press from Paraguay, Patino recognized he made the recording in which he supposedly makes an agreement regarding debt bonds and promised he would show the tape.

He added that Quinto Pazmiño was removed from his post for involvement in corruption.

Ecuadorian president launches prison reform

People's Daily Online, 22 May 2007

Ecuadorian President Rafael Correa launched a prison reform plan on Monday to reduce the number of prisoners and improve general conditions.

During a visit to the Litoral Penitentiary in Guayaquil, in western Ecuador, Correa said the program is studying how to repatriate 400 Colombian prisoners.

On his weekly radio show on Saturday he said Ecuador will "set up jails which do not have a single prisoner without a sentence."

The government plans to sign agreements with law faculties to hire more lawyers and public defense counsels. The Supreme Court will also finance new criminal courts.

Ecuador has 11,000 prisoners being held without trial.

"Our system is not a rehabilitation system, but a road to ruin where prisoners come out with doctorates in crime having perfected their criminality," the president said.

The new jail structure will separate criminals based on their dangerousness, officials said.

Correa will also set up a special commission to investigate the murder of Litoral Penitentiary director Soledad Rodriguez, apparently by criminals from the jail.

Mafias Control Ecuador Jails

Quito, May 22 (Prensa Latina) The governor of Guayas province, Camilo Saman, reiterated that it is imperative to reform the Ecuadorian penitentiary system, and end with the control of jails by mafias.

"Drug mafias are the ones who truly control prisons," said Saman on Monday night, highlighting that it will be take at least two years to solve crime and security issues.

The governor called for the restructuring of the National Penitentiary Council, and blamed the National Direction for the mishandling of prisons.

The official affirmed President Rafael Correa will visit a penitentiary in Guayaquil Monday, where he will announce a plan to improve jail conditions.

Ecuador's leftist president invites press freedom groups to visit

IHT, May 20, 2007

QUITO, Ecuador: Ecuador's president on Sunday invited the Inter-American Commission on Human Rights and eight international press groups to visit the Andean country amid criticism the leftist leader is trying to limit freedom of expression.

Last week, President Rafael Correa sued the Quito newspaper La Hora for libel over a March editorial in which the paper said he was leading the nation with "mobs, rocks and clubs."

The editorial was referring to a standoff between Congress and the courts, when police blocked 57 lawmakers from entering the capitol. Crowds of Correa supporters also attacked the legislators, who had been fired by the Supreme Electoral Tribunal in a dispute over the president's push to rewrite the constitution.

The lawsuit drew criticism from both Ecuadorean journalists and international press freedom organizations, including the Inter-American Press Association and the World Press Freedom Committee.

The New York-based Committee to Protect Journalists urged Correa to drop the lawsuit suit against the newspaper.

"Fear of criminal penalties will inhibit the Ecuadorean press in reporting and commenting on issues of public interest," CPJ Executive Director Joel Simon said last week.

On Sunday, a presidential statement said "any mission whose commitment is to seek the truth" would be welcomed in Ecuador. The invitation included the Inter-American Commission on Human Rights, a branch of the Organization of American States, and eight international press freedom groups.

There was no immediate reaction as to whether any of the groups would visit Ecuador.

The statement said freedom of expression is an unalienable right, but that there are "legitimate limits" that protect individuals' names and public images.

Correa, Ecuador's eighth president in a decade, said he would drop the suit if the paper's president publicly apologizes.

Call to Confront Delinquency in Ecuador

Quito, May 18 (Prensa Latina) Ecuadorian government minister, Gustavo Larrea, called to boost national security to confront delinquency and growing citizen insecurity.

The government is studying measures to lower delinquency and does not rule out a state of emergency, Larrea stressed.

The official called for a greater commitment of law enforcement with the community, since "security involves everyone." He added that it is also necessary to combat police corruption, improve quality of life and salaries of officers.

He announced the creation an organized crime prevention unit and strengthening investigation work since kidnapping is on the rise as well as extortion and crime contracts.

Larrea said some crimes here are organized in Colombia, explaining "We have the backlashes, undoubtedly, as a result of conflict with the northern neighbor."

He concluded that, in spite of current problems, 46 criminal gangs were dismantled in the past few months and 1,600 weapons confiscated.

Ecuador Seeks Aid Not to Exploit Amazon Oil

Haider Rizvi

Credit:Save Americas Forests Native Waorani hunter-gatherer in Yasuni.

UNITED NATIONS, May 18 (IPS) - A novel proposal by Ecuador is testing world leaders' commitment to fight global warming and preserve the biodiversity of the Earth.

Ecuadorian officials told an international meeting this week that their government would ban exploitation of huge oil reserves if it was compensated for its effort to save the natural habitat of the Amazon region.

The untapped oil reserves are located in the heart of the Amazon, considered by scientists to be one of the most bio-diverse rainforests in the world. If explored and developed, the fields are expected to deliver more than 900 million barrels of oil.

"If the world truly is interested in saving the planet," said Ecuador's representative Lourdes Tiban, "the government has decided to sell the oil, but keep it in the ground."

Tiban added in her statement that Ecuador would need financial assistance from the international community in exchange for the decision not to exploit the oil. The country will wait up to a year to determine if there has been an adequate response.

"I call on the U.N. agencies, member states and non-governmental organisations (NGOs) to consider our proposal," she said at the sixth annual meeting of the world body's Permanent Forum on Indigenous Issues.

Her appeal came nearly two months after the energy ministry in Ecuador declared that it was ready to leave the oil in the ground because it did not want to harm an area of "extraordinary biodiversity".

But ministry officials warned that they would be able to implement this decision only if and when the world community delivered "at least one-half of the resources" likely to be generated by oil extraction.

"The international community has to compensate us for the immense sacrifice that a poor country like Ecuador would have to make," said President Rafael Correa in a recent radio address.

Correa estimates the compensation figure at around 350 million dollars a year.

"Ecuador doesn't ask for charity," he said, "but does ask that the international community share in the sacrifice."

The recently-elected left-wing government says that oil revenues are vital for social development because more than half of its 13 million citizens live in abject poverty.

Ecuador is currently burdened with 15 billion dollars of external debt, including a substantial amount owed to the World Bank and Inter-American Development Bank.

While apparently pleased with the government's position, leaders of the indigenous people of Yasuni National Park in the Amazon say they are not convinced that those in power would keep their promise.

"We want Carlos to be fired," said Moi Enomenga, leader of the Waorani indigenous people on whose lands the possible extraction would take place, referring to Carlos Pareja Yanuzeli, the head of the state-owned Petro-Ecuador oil company. "They are destroying our lands. We don't want any oil companies in our area."

Yanuzeli is viewed by indigenous people as a staunch advocate for oil companies.

According to indigenous leaders, without seeking their permission, some oil companies, including Spain's Repsol and Brazil's Petrobras, are already operating in the area, which spans over two million hectares of rainforest.

The oil reserves are located in indigenous territory known as "Ishapingo-Tiputini-Tambococha (ITT)," which lies within the boundaries of the Yasuni National Park, an area designated a "biosphere reserve" by the U.N. Educational, Scientific and Cultural Organisation (UNESCO).

According to the World Conservation Union, the Yasuni Park is home to 25 species threatened by extinction, including the tapir, the largest land mammal on the continent, and 10 monkey species. The forest is also one of the most diverse places in the world for bird and tree species.

The Waorani people, who live in voluntary isolation in the ITT zone, are renowned for their giant spears. Their survival is completely dependent upon the rainforest.

Supporters of indigenous peoples' rights from the scientific community say Correa's appeal for compensation is an unprecedented chance to work with a progressive government in order to save one of the wildest and most abundant spots on Earth.

"What are urgently needed now are viable proposals from the international community to Correa," Dr. Matt Finer, an ecologist who works with the conservation group Save America's Forests, told IPS.

In an interview, Max Christian of the University of Maryland's Sustainable Development and Conservation Biology programme, described Correa's suggestion as "a landmark opportunity" for the world to help protect Yasuni's "astounding biodiversity".

The U.N. Convention on Biodiversity, which has been signed or ratified by 190 countries, calls for significant reduction in the loss of biodiversity by 2010. The treaty recognises that indigenous peoples' knowledge of various plant and animal species is vital to save life on Earth.

Some of those in solidarity with the indigenous struggles for the protection of lands and resources from outside interference say they like Correa's proposal, but have serious objections to what they see as an attempt to put a dollar price on native people's right to exist.

"Let's call things by their proper name," said Brian Keane, director of the indigenous rights organisation Land is Life. "Money is money, oil is oil, blood is blood, genocide is genocide."

Ecuador's central bank to name new chief next week

By Carlos Andrade

QUITO, May 17 (Reuters) - Ecuador's Central Bank board will choose a new general manager next week, board members said on Thursday, after Mauricio Pareja resigned amid a public tussle with President Rafael Correa over the autonomy of the bank.

"We have to handle things with tranquillity," board member Leopoldo Baez told Reuters, adding that the board was scheduled to pick a new manager next week.

Pareja's replacement is likely to be either a close Correa ally or a career technician who would pose little resistance to the populist's plans to boost state influence over the bank, said bank and market sources close to the issue.

Some bank board members, speaking on condition of anonymity, said a strong candidate for the job is Maria Andrade, who is one of Correa's representatives on the independent banking regulatory board.

Andrade has said she was fired as a central bank employee in 2004 during a general layoff and a trial is pending over her dismissal.

The sources said another strong contender is Fernando Uzcategui, a bank board member with a low political profile and no links to the government.

"It is only natural to seek a closer relationship so the government has a more coherent and organized plan," Uzcategui told Reuters on Thursday, hinting at closer ties with Correa if chosen.

Since taking office in January, U.S.-educated economist Correa has increased his sway in Congress, top courts and the influential banking regulatory board.

Correa is a fierce critic of the Central Bank, an institution he argues represents a heavy expense for the state and plays no role in printing currency in a dollarized economy.

However, some analysts said the bank is a key source of independent financial data and studies for South America's No. 5 oil producer.

Correa, an ally of Venezuelan President Hugo Chavez, has worried Wall Street with pledges to limit debt payments to prioritize funding for social services in the poor Andean nation.

Pareja quit on Tuesday, according to a statement from the bank issued on Wednesday. The institution gave no reasons for Pareja's departure, just saying he quit "voluntarily."

Attorney General of Ecuador Visits COHA

From COHA, May 17, 2007.

During his recently concluded visit to Washington, Ecuador’s highly regarded attorney general, José Xavier Garaicoa Ortiz, privately met with the Council on Hemispheric Affairs’ (COHA) editorial board to discuss current issues affecting his country. The ground rules of that meeting were that no public statement would be issued until the attorney general returned to Ecuador. The Ecuadorian attorney general was in Washington to participate in preliminary hearings before the International Centre for the Settlement of Investment Disputes, under the auspices of the World Bank, to facilitate the mediation of the dispute between Ecuador and the U.S. multinational oil company, Occidental Petroleum. The company is seeking to invalidate the government’s cancellation of a contract allowing for the exploration and production of oil which Ecuador says was properly abrogated by actions of the company.

Garaicoa began by focusing on President Rafael Correa’s recent battle with the country’s fractious legislature and parts of the court system. Here, Garaicoa rhetorically asked which of the country’s instruments of government has been more responsive to the popular will. He went on to criticize the controversial U.S. military presence at the Manta airbase (arranged by one of President Correa’s predecessors) and confirmed that the president has stated that he will not extend the lease on the facility, which is up for renewal in 2009. The Ecuadorian president has based his position on Manta mainly on the grounds that there is substantial domestic opposition to the presence of any foreign military base in Ecuador, emphasizing that it was not aimed at the United States in particular.

The base was originally promoted to the Ecuadorian people as a vehicle for the country’s economic development, providing an opportunity that would result in new foreign investments and jobs coming to the region. But the past eight years of its operation have rendered drastically different results. Garaicoa noted that the use of the base as a staging ground for anti-guerrilla activities in support of Colombia’s government put Ecuador at risk of being drawn into that conflict, something neither the Correa government nor the people of Ecuador favor. At the end of his interview, Garaicoa lamented, “Manta has never filled the role it was originally intended to.”

In a country where voting is obligatory and where legislators are elected by popular vote, Attorney General Garaicoa insisted that President Correa remains Ecuador’s only elected official who effectively represents the popular will of the entire citizenry. “No existe un Congreso Nacional” (“There is no national congress”), asserted Garaicoa, emphasizing that the current law and constitution are basically marred, so that both the powers of the elected Congress and the checks and balances among the branches of government are unclear. In this respect, Correa plans to lead efforts to rewrite the constitution beginning in September because the current lack of clarity has allowed the populace to be under-represented, to the benefit of the more privileged elements of the citizenry as well as the other branches of the government. Consequently, the legislative and court systems have been acting in a manner that has invalidated their legitimacy in the eyes of the people. Ecuador’s transformative referendum held last month, where the president’s proposal was backed by 81.7% of voters, has convinced many Ecuadorian specialists that Correa’s recent actions are indeed fully in line with the expectations of a majority of the electorate. The referendum also proved that Ecuadorians were overwhelmingly in favor of a constituent assembly that would begin the process of effectively rewriting the constitution in September.

This analysis was prepared by COHA Research Associate Laura Wayne
May 17th, 2007

Ecuador's Indigenous Party Declines

Abridged from Oxford Analytica 05.17.07, via Forbes.com

When Ecuador's indigenous party, Pachakutik, entered government for the first time in January 2003, it appeared to have made the transition from social protest movement to genuine political force. However, four years later, the party's political force has been sapped, and it is ceasing to attract the support of its natural constituency--indigenous and marginalized elements of society.

In theory, Pachakutik has a strong basis for becoming a viable political party, being the political wing of the Confederation of Ecuadorian Indigenous Nations (CONAIE), which is the umbrella movement responsible for organizing numerous political protests. CONAIE is successful at mobilizing protesters and was instrumental in the overthrow of former presidents Jamil Mahuad and Lucio Gutierrez, in 2000 and 2005 respectively.

There is a clear demand for greater political representation in a country where over 40% of the population is of indigenous origin but under-represented in Congress.

In the 2002 elections, Pachakutik gained 10 seats in the 100-seat legislature and entered government as part of a coalition supporting Gutierrez. The president's left-wing agenda coincided with Pachakutik's calls for greater indigenous rights and improved health and education systems.

But Gutierrez's shift toward centrist neo-liberal policies alienated Pachakutik, and the party left the coalition in August 2003. Since then, Pachakutik's strategy has been to block government proposals, particularly those of Gutierrez and, to a lesser extent, his successor, Alfredo Palacio. This strategy meant that the presidents were unable to govern effectively, but it compromised Pachakutik's image as a responsible political party. Its share of the vote fell in the November 2006 elections, with the party now holding seven seats in the legislature.

This poor performance is in stark contrast to the success of indigenous movements in Bolivia and, to some extent, Peru. Despite teething problems, the indigenous movement has entered mainstream politics in Bolivia and is playing a key role in shaping policy. In Peru, the near victory of indigenous-supported Ollanta Humala in the 2006 elections ensured that indigenous demands would continue to be addressed, particularly in regions where Humala performed most strongly.

However, there are sharp differences between the Bolivian and Peruvian indigenous experience and that of Ecuador. In Bolivia and Peru, the indigenous agenda is allied with that of other strong interest groups, such as coca growers and peasants.

Pachakutik not only has failed to appeal to new voters in this way but also is struggling to hold onto traditional supporters. It has found its support base disintegrating, with many indigenous voters backing Rafael Correa rather than Pachakutik candidate Luis Macas in the November 2006 presidential elections.

Pachakutik has now lost the political initiative to Correa, who has demonstrated that the indigenous movement is most successful politically when allied with other groups. Accordingly, Pachakutik looks set to decline into a minority special-interest party, having for now lost the opportunity to transform indigenous support into a broader political appeal.

Ecuador's President Correa Plans Anti-Monopoly Law

May 14, 2007
QUITO -(Dow Jones via Cellular-news)- President Rafael Correa announced over the weekend that he plans to present a law that won't permit private monopolies in Ecuador.

"We are drafting an anti-monopoly law. If competition is not well applied, it can be a disaster," Correa said in his weekly radio address, referring to telecommunications and cement as target industries for the proposed legislation.

In particular, Correa was referring to competition between Telefonos de Mexico, or Telmex, and state telephone companies, after the Mexican company bought Ecuador Telecom, or Ecutel, in March.

Ecutel, with offices in Quito and Guayaquil, provides wireless telephone, Internet and data-transmission services. Under its new administration, the company could potentially threaten the leading market position held by state companies Andinatel and Pacifictel in the fixed telephone market.

Telmex is controlled by Mexican billionaire Carlos Slim.

"There is a danger that Mr. Slim is monopolizing telecommunications in Latin America; in the case of Ecuador, rest assured that here there is a proud and sovereign government that will not permit private monopolies in fundamental services for the population," said Correa, who also classified the privatization of state companies as a "disaster for the country."

Slim is also present in Ecuador's cellular telephone business through America Movil, which operates in Ecuador as Porta Cellular, the country's main service provider with around 2 million clients.

Correa also criticized the privatization in the mid-1990s of the state cement companies La Cemento Nacional, now owned by Swiss Holcim, and Cementos Selva Alegre, owned by French cement maker Lafarge.

"We must surpass this fallacy, this myth of competition, this myth of privatization. We now have a quasi monopoly; these two companies always act in coordination if not in collusion, and now we have cement that is more expensive than in Europe," Correa said.

The president, however, offered no details about the law he plans to present.

-By Mercedes Alvaro, Dow Jones Newswires; 5939-9728-653; mercedes.alvaro@dowjones.com

(END) Dow Jones Newswires

Constitution making in Ecuador

Basil Ince, Trinidad & Tobago Express

Monday, May 14th 2007

Rafael Correa of Ecuador is one of a number of presidents referred to as left-leaning who have taken office in a Latin American country recently. Others are "Lula" da Silva in Brazil, Nestor Kirschner in Argentina, Evo Morales in Bolivia, and Tabare Vasquez in Uruguay. They are following somewhat in the mode of Venezuela's Hugo Chavez to alleviate, if not end, the draconian levels of inequality in their countries.

Correa, holder of a Ph.D in economics from an American university, assumed the presidential office last January. In his campaign he promised to renegotiate debt, rework oil deals, and end the lease on a military base used by the US military. In order to fulfil his campaign promises, the 43-year old leader challenged the traditional political parties which many Ecuadoreans regard as corrupt, and blame for the revolving door of eight presidents in ten years. This undertaking, applauded by Chavez, was more than a mouthful. Arrayed against Correa is the traditional elite. Moreover, the United States remains wary of Correa's programme and his seeming alliance with Chavez. Despite his friendship with the Venezuelan leader, the freshly-minted president declared that he was his own man: "My friend does not rule in my house, I do."

Correa's plan for change follows a rocky path at the end of which is a new constitution to emasculate the powerful political parties, more specifically, to lessen the influence of politicians on the judiciary and force legislators to live in the constituencies they represent. There were hurdles to surmount before writing the new constitution. He had to win the support of a congress in which he belonged to no political party, and win a referendum which would allow him to form a constituent assembly to draft the constitution. The referendum route was nothing original. It had been used by Chavez to weaken political parties.

The task seemed ominous for Correa who came into office without the support of any political party. Fortune, however, favoured him when an ousted president with the second largest party threw his weight behind Correa. The result - a slim majority for the fledgling president in the unicameral 100-seat congress. Support also came from an electoral court, an agency independent of government which has the final say on all electoral matters. The court dismissed 50 right-wing legislators who were opposed to the referendum. The lawmakers did not take things lying down and, though restrained by the police, they tried to force their way into the chamber, but were sidelined and eventually replaced by substitute legislators.

All hell really broke loose when the high court in a 6-3 decision overturned the electoral court's decision to fire the lawmakers. In turn, Congress dismissed the high court judges for reinstating the 50 legislators. The situation became even more chaotic when a prosecutor ordered the arrest of 24 of the 50 lawmakers for "refusing to recognise the constitution, and impeding a meeting of Congress." There were demonstrations against the expelled legislators with the police firing tear gas in sporadic confrontations. As one observer put it, "The entire country is near war."

The upshot was that 11 deputies fled to Colombia seeking political asylum. One reported: "We are not living in a state of law, but in a dictatorship presided over by Rafael Correa who has seized all the powers of the state." Meanwhile, Correa received the green light to revamp the legislature and other government structures to pursue his nationalist agenda when he won the referendum by a one-sided five-to-one margin. The next hurdle on the way to re-writing the constitution is the September election of a constituent assembly to draft the new charter.

When Correa came to power he met an inefficient public sector, a wobbly judicial system, an ineffective parliament, a country with a high index of corruption, and a depressing socio-economic environment for the impoverished masses. The majority of the population believes that he is doing the right thing. However, in the process he has dragged the judiciary into the fray, pitting judges against judges, and judges against legislators. Some believe that his actions will provide an unhealthy climate for business, discourage respect for the law, and eradicate the civic cordiality which should exist among political adversaries. Change is never easy. At times it comes with bloody revolutions. Let's hope it does not come to that in Ecuador and that both leader and opposition can arrive at some modus vivendi beneficial to all 13 million Ecuadoreans. Correa has taken a small step. He opposes the arrest order of the 24 politicians. Perhaps this could be the beginning of a rapprochement between government and opposition.

Negroponte Presser With Ecuadorian Media Outlets

Monday, 14 May 2007, via Scoop

Press Release: US State Department Press Availability With Ecuadorian Media Outlets

John D. Negroponte, Deputy Secretary of State; Thomas A. Shannon, Assistant Secretary for Western Hemisphere Affairs
Press Availability With Ecuadorian Media Outlets: Newspapers El Comercio, El Universo, La Hora, and Expreso, and Vistazo Magazine
Quito, Ecuador
May 9, 2007

DEPUTY SECRETARY NEGROPONTE: First of all good afternoon to all, for me it's a pleasure to be back in Ecuador. I was the Political Counselor for this Embassy between 1973 and 1975. This is the first time I have been back since then, after 32 years. I would like to say something about the purpose of my tour and then answer your questions. For the sake of precision, I thought I would speak in English and Raul will translate for me. But I am very comfortable receiving your questions in Spanish.

I just want to say that I have only been Deputy Secretary of State for a little longer than 2 months now. One of the early visits that I wanted to make, and that Secretary Rice wanted me to make, was to the countries of this hemisphere, as a symbol of the importance we attach to relations with the Western Hemisphere. That is why I have taken this trip to visit Colombia, Ecuador, Peru and Panama.

Perhaps I could say in general terms that we view our relationships with the hemisphere as very positive, we believe that we have a positive agenda with respect to support for democracy, support for expanded economic relationships including trade, and including support for common efforts against many of the transnational threats our countries face, which are really mutual problems. They are problems that we all face together. No one country can deal with transnational threats, such as narcotics and terrorism, all by themselves.

As far as my visit to Ecuador specifically is concerned, I had the opportunity to meet with President Correa and members of his cabinet this morning and we had a good exchange with respect to our economic and political relations. We also were able to hear the views of the Foreign Minister, the Minister of Interior and the Minister of Defense.

I reassured President Correa that we view our relations with Ecuador in a positive light, that we want to conduct those relations constructively and want to have as ample a dialogue as possible on the various issues of mutual concern.

I was able to have a meeting afterwards with government officials who have played a role in determining the economic policy of Ecuador and then, as some of you may know, I witnessed the signing of an agreement of a USAID credit guarantee with various local banks, which would provide some $13 million in credit guarantees to support small business enterprises.

And lastly, just before coming here, I was able to meet with the entire Embassy staff and was pleased that are still some people that I worked with some 32 years ago working at the Embassy today, and I was pleased that we were able to recognize each other. So I will be pleased to try to answer any questions.

One other thing, we have Mr. Shannon here. He is Assistant Secretary of State for Western Hemisphere Affairs, who manages our day to day policy in the Hemisphere. So easy questions for me, difficult ones for him. (laughter)

QUESTION: I am Patricia Estupiñan de Burbano, the General Editor of Vistazo Magazine. There are some key issues in the U.S. and Ecuador relation at present. The BIT that Ecuador apparently decided to terminate, the renewal of the FOL agreement, and ATPDEA. What is the U.S perspective in reference to these issues?

DEPUTY SECRETARY NEGROPONTE: In the order that you asked the questions.

First of all with respect to the Bilateral Investment Treaty, we have not received any official notification from the Government (of Ecuador) in regards to the treaty so I do not really have any comment on the position of the government of Ecuador and I don't think we would have any comment until and if we receive some kind of official notification. But what I would say is this. The President and I spoke about that this morning and we are open to a dialogue on the issue of trade and economic relations, and we are open to a dialogue that is mutually respectful with the purpose of finding areas of convergence between us. So what I want to emphasize here is that we want to pursue a positive economic relation with Ecuador.

The question of Manta you asked me, the agreement that we have with respect to Manta expires in 2009 and we know that the President (Correa) has announced his position that he does not wish that agreement to continue beyond 2009 and, of course, we will respect whatever the decision the Government of Ecuador makes with respect to that issue.

But in addition I would want to say this about why it is that we believe that the access to the use of the airfield in Manta is very useful, and we believe useful to both of our countries. That is because it has been so helpful in intercepting drug shipments, cocaine shipments that are destined for the international market, and we believe that in addition to helping intercept these shipments it has also in that way been helping to protect the sovereignty of Ecuador, which is violated by these drug traffickers.

So again, while we are the first to recognize that it is the decision of the Government of Ecuador to grant access or to not grant access, we just hope that when final positions are reached in that regard, that both the costs and the benefits of such a course of action would be analyzed, particularly with respect to interdicting international narcotic shipments.

On the question of the ATPDEA, we recognize the importance of that Act. We strongly favor its renewal, and we are making, the Executive Branch is making that position known to the Congress of the United States and we hope the Congress will understand why it is so important that the Act be extended, or renewed.

QUESTION: From La Hora (unintelligible)

DEPUTY SECRETARY NEGROPONTE: We have various assistance programs for the government of Ecuador and we want to be as supportive as we possible can. We have a tradition of having assistance programs for Ecuador both in the economic area and in the counter-narcotics area. We have a large section of the Embassy that is involved in supporting the counter-narcotics efforts of the Government of Ecuador and we expect that kind of assistance to continue.

QUESTION: I am Hernán Ramos, General Editor of El Comercio daily. I have two questions. One is related to the FOL in Manta. You have said that the final decision is in the hands of the Government of Ecuador, which has made clear its position of not renewing it. If that happens, we have heard that the U.S. would have the option of negotiating the establishment of a base (sic) in Peru. Peruvian authorities have denied any conversation to that respect. What is the U.S. opinion about it, is there a possibility for a negotiation with Peru?

The other question has to do with the purpose of your tour. I heard from sources in Washington that your tour was very important for the U.S. foreign policy agenda because, among other things, the countries you are visiting have a strategic importance for the U.S. What is the strategic value attached to the countries you are visiting on this tour?

DEPUTY SECRETARY NEGROPONTE: Regarding you first question about what we might do if we do not have continued access to Manta, it is a question that I don't think we have looked at in any kind of detail yet. This is 2007 and that is 2009. So people who speculate that we might have in mind one country or another as an alternative, I think that is just that, I think that is speculation.

As for the purposes of my trip here, there are a couple of important considerations. First of all, all countries I am visiting are democratic countries with which the U.S. has had friendly relations, and I think we wanted to send a signal of support and friendship toward these countries. And then three of the countries, not Ecuador, but three of them--Panama, Colombia, and Peru--have pending before the Congress the approval of free trade agreements that we have negotiated, so that was another reason that we took this trip. Also, in respect to each of these countries we have specific bilateral issues.

QUESTION: I am Juan Carlos Calderon, Editor of Expreso daily. You have been very critical of President Chavez, and he is part of a very active policy in reference to the formation of the FUNDASUR and also of what has been the so called oil diplomacy. How does the U.S. see this South American union? Does the U.S. consider that Chavez has too much influence in the region?

DEPUTY SECRETARY NEGROPONTE: First of all I don't think I have ever personally criticized Mr. Chavez. We make comments about his policies, some of which we have serious reservations about, but as far as our agenda is concerned with Venezuela, we have diplomatic relations, we have an Embassy there and we are always open to working on the various issues that exist between us. With respect to Mr. Chavez's ideas with respect to the Southern Hemisphere, I have no particular comment in that regard. What I prefer to focus on is our own agenda. We have a positive agenda towards the Western Hemisphere. President Bush just completed a very important visit to many countries in the region. I am visiting here. We want to have a constructive agenda that is based on common values and support for democracy. We want to base our relations on increased trade, and generally improved relations between the countries of this hemisphere.

QUESTION: Monica Almeida, from El Universo. President Correa has more or less three months in power and I think that for Washington it is still unknown if he is one of Chavez's disciples or if he represents another form of socialism of the 21st Century, as he has stated. Despite the short time of your conversation with him, I would like to know your impressions of our president. Is there room for dialogue to address this constructive agenda you talked about?

DEPUTY SECRETARY NEGROPONTE: First of all our meeting was not so short (laughter). It lasted one hour and a half, so I thought that was very generous on the part of the President, to make so much time available. He also assembled various key members of his cabinet, so I thought it was an excellent opportunity not only to hear from the President, but to hear from his other Ministers as well.

Secondly, with regard to the particular political orientation or social orientation, or economic philosophy, these are questions that have to be decided by the people and the government of Ecuador. This is not something that we have a view on and I think it would be a mistake for me and it would not be appropriate to make comments on that.

Except for one thing, which is that as elsewhere in the hemisphere, we think these kinds of issues should be decided on a democratic basis, and we believe that there is most definitely a democracy operating here in Ecuador and we believe these kinds of issues ought to be resolved in the context of democracy.

You asked me about space for dialogue. I think there is ample space for dialogue between our two countries. In fact one of the specific issues we discussed today was how to, or one of the issues we explored, was how to continue our economic assistance. That was one of the issues where I believe there is the possibility of continuing and expanding our dialogue on a number of issues, whether it is economic, or the war against drugs, or whatever issues the other side might wish to raise.

So, I just want to thank you very much for the opportunity this afternoon.

QUESTION: Much emphasis has been placed on a new configuration of relations between Latin America and the U.S., from the standpoint of bioenergy included in the accords signed between Brazil and the U.S. Can you give us your perspective about it? How does the U.S. see this new approach on energy?

ASSISTANT SECRETARY SHANNON: (Original answer in Spanish) I will be glad to respond to that. The important thing is that the U.S. and Brazil have capacity in terms of cooperation in the field of bioenergy. From our standpoint and I believe from Brazil's standpoint, it opens a new space for cooperation in the Americas --two of the biggest democracies of Americas, focusing in the area of biofuels and energy that are essential for the economic and social development of all the countries in the region. But the most interesting thing about biofuels is that with them the countries that have strong agricultural sectors, but lack energy sectors, especially countries in Central America and the Caribbean and also other countries in the Southern part of the continent, can transform part of it into an energy-producing sector, and that changes the strategic nature of those countries. It will help those countries develop some independence in terms of energy but also opens the possibility of providing energy to other countries that need it. From our standpoint this is something that has many possibilities, a lot of potential for each country, and the fact that the U.S. and Brazil have found a way to cooperate is very important.

QUESTION: Is there a second phase in this process? Where do you go from there?

ASSISTANT SECRETARY SHANNON: (Original answer in Spanish) The MOU has three parts. The first is a commitment to deepen the links between the two countries in terms of scientific and technological research, and that is already underway. Brazilian technicians have already been invited to visit facilities in the U.S. and experts from the U.S. are going to visit facilities in Brazil. The second part deals with cooperation with third countries which are interested in developing their own national industries of biofuels. Brazil and the U.S., during the meeting of their Presidents in Camp David, identified El Salvador, Turks and Caicos, the Dominican Republic and Haiti as the first four countries for cooperation in this process. But the U.S. and Brazil also initiated contact with Central America and CARICOM, to see what other countries would be interested.

The third part is the formation of an international forum of bio fuels with the biggest producers and biggest consumers of bio fuels from the U.S., Brazil, South Africa, India, China and the European Union, and together will start the job of establishing the rules and standards needed to secure the commercialization of bio fuels internationally. We are already working on it.

Released on May 11, 2007

ENDS

Ecuadorian Prez Decries SIP

Quito, May 13 (Prensa Latina) Ecuadorian President Rafael Correa accused the Inter-American Press Association (SIP) of representing business interests and oppose progressive governments in the region.

"I would like SIP, so watchful for freedom of speech and press freedom, to be equally zealous about quality in the press," Correa stressed.

In his customary radio broadcast speech on Saturday, Correa questioned the work of this organization, which, he said, is made up of media owners with a business-oriented view.

SIP does not represent the journalistic class, which suffers the violations of media owners in Ecuador, he stressed.

The head of State complained about lies published by local dailies, mainly La Hora paper, which he sued for slander.

He urged SIP to worry about "finding the truth" rather than defending what he called the spirit of the body that is part of corruption.

Correa warned that his executive defends freedom of expression and truth, and will deal with any attempt to deceive or distort information.

Rafael Correa is the most popular leader in America

Translated from El Tiempo, 9 May, 2007.
Guatemalan Oscar Berger is the least popular, according to a study published by Mitofsky.

Correa, that was invested as president on the 15th of January, obtained an approval rating of 76 percent in the last survey conducted in his country in April, making him the most popular in all of America.

The second most popular leader, by a very small margin, is the Colombian Alvaro Uribe, who last month obtained a 75% approval rating, in spite of having been five years in the presidency of his country.

Next after him came the Mexican Felipe Calderón, who assumed power in December, with 65% of citizens satisfied with his government; the same percentage that the Venezuelan Hugo Chavez, who after eight years in the power still obtains a high approval rating, and the Bolivian Evo Morales, with 64%.

The least popular are the president of Guatemala, Oscar Berger, with only 20% approval; the Panamanian Martin Torrijos, with 24%; the American George W. Bush, who started the war in Iraq has just 36%; and the Dominican Leonel Fernandez (38%).

Amongst the other leaders, Nicaragua's Daniel Ortega (61%), Uruguay's Tabaré Vázquez (60%), Argentina's Néstor Kirchner (57%), Honduras' Manuel Zelaya (57%), El Salvador's Antonio Saca (56%), Costa Rica's Oscar Arias (55%), Paraguay's Nicanor Duarte (54%) and Chile's Michelle Bachelet (51%), all recieved majority approval.

On the other hand, those that recieved below 50% approval include Brazil's Lula (49%), Peru's Alan Garcia (49%) and Canadian prime minister Stephen Harper (45%).

Ecuador's president sues newspaper over editorial

SignOnSanDiego, May 11, 2007
QUITO, Ecuador – President Rafael Correa is suing a local newspaper for libel over an editorial that said he was leading the politically unstable nation with “mobs, rocks and clubs.”

Correa said the La Hora editorial was “unfounded” and offended “the dignity of the country's foremost authority.” But he added he would drop the lawsuit if the paper's president, Francisco Vivanco, who is named in the legal action, publicly apologizes.

The Quito newspaper vowed to fight the lawsuit and said in a printed statement Friday that the editorial was based on “respect for all of the state's duties.”

The editorial was published during a legal crisis in March over Correa's push for a referendum on whether to draw up a new constitution. There were 57 lawmakers fired in the legal standoff, and the editorial referred to Correa's decision to send police to stop the legislators from entering the congressional chamber.

The referendum was overwhelming approved in April.

Vivanco faces up to six months in prison if he is found guilty. There is no fine attached to the charge, but Correa can seek damages through a civil suit.

Correa, Ecuador's eighth president in a decade, has called some sectors of the Ecuadorean media a “news mafia.”

Ecuador Defends Change Process

Quito, May 11 (Prensa Latina) The Ecuadorian government ratified its sovereign right to bring forward a process of deep reforms through a Constituent Assembly, after the proposal was supported in a referendum last month.

That stance was defended yesterday by President Rafael Correa, who rejected the European Union ambassadors questioning over democracy in the Andean country.

Correa noted the Ecuadorian executive respects democracy, and the future implementation of the Assembly is an example of that, as it provides space for the people s participation in the country s transformations.

"The EU and the world must recognize and support the process Ecuadorians are living, and Europe should be amazed at the popular awareness in the country," the president stressed when questioning the EU diplomats concern over an alleged crisis of powers in the nation.

"Today we are moving towards a National Assembly that allows for a new Constitution, and not absolute powers for me," Correa declared.

Bank of South May Incorporate in June

Caracas, May 10 (Prensa Latina) The Venezuelan government has ratified its invitation to all South American countries to sign the foundational agreement of the Bank of the South on June 26, Finance Minister Rodrigo Cabezas said on Thursday.

Cabezas described the recent Quito meeting of MERCOSUR Finance and Economy ministers as "very positive," and that Ecuador and Brazil have joined Argentina, Bolivia and Paraguay in confirming their inclusion.

The Bank of the South will be an irreversible historic event in 2007 and we expect other countries to join, because South America must meet the challenge of building a new regional financial architecture, to "free us from financial mechanisms created by developed countries, including the International Monetary Fund and the World Bank," the minister s note said.

The Bank of the South will be administered by the governments and will be "the financial muscle to correct asymmetries and insufficient capital," Cabezas stressed.

"The Bank of the South will be an instrument that will overcome poverty, because there is a commitment to 200 million poor people in the continent," he concluded.

Former Ecuador president Borja accepts S. America Union presidency

People's Daily Online, May 10, 2007

Rodrigo Borja, president of Ecuador from 1998 to 1992, said on Wednesday he has accepted the presidency of the Union of South American Nations (Unasur), a post the region's rulers offered him last month.

"It gives me great pleasure to make public my decision to accept the 12 leaders' proposal to accept the post of Executive Secretary at the nascent Unasur," he told a press conference at Quito's International Center for Higher Communication Studies in Latin America.

He said that Unasur will increase economic and political integration in the region, taking advantage of the achievements and frustrations of regional integration processes.

Ecuador's President Rafael Correa told media that Borja had been a unanimous choice for the post on April 17 at the end of the South American Energy Summit on Venezuela's Magarita Island. Correa did not say who had been consulted. He added that Unasur would be headquartered in Quito.

Borja said the Unasur headquarters would be in Quito's Mitad del Mundo neighborhood, and will be designed by Brazilian architect Oscar Niemeyer, who designed part of the United Nation's building in New York and inspired Brazil's capital Brasilia.

"Unasur must be a small austere entity, that does not repeat the inflation of many international entities, and that uses Spartan language, distant from the frothy rhetoric we have become used to," Borja said.

He said that Unasur would be multinational with experts from across the continent, that everything had to built from scratch and that he hoped that the next meeting of the region's presidents, due in Colombia, will give the go ahead for the secretariat.

Source: Xinhua

Ecuador bank regulator says Correa bill a danger

QUITO, May 9 (Reuters) - Ecuador's banking chief regulator said on Wednesday that the stability of the sector was in danger if President Rafael Correa wins support in Congress for a bill that would artificially lower lending rates.

"We should avoid anti-technical ways... that are a sure failure in the long run," said regulator Alfredo Vergara.

Correa, who blames banks' high interest rates and fees for stiffing productivity, has waged a battle with bank executives and Vergara to increase state control over the sector.

The popular former economy minister plans to introduce legislation in Congress to force banks to lower interest rates, open cheaper credit lines for the poor and increase scrutiny over the sector.

Correa demanded Vergara's resignation on Tuesday, but the regulator has said he will not quit and would veto any government measure he thought was damaging to the sector.

Correa has threatened to sue banks that charge clients more than the conventional interest rate of 14 percent.

Ecuador founds truth commission to investigate human rights violations

IHT, May 4, 2007

QUITO, Ecuador: Ecuador's new leftist government has set up a truth commission to investigate alleged human rights abuses committed over the last 27 years, particularly during the right-wing administration of former President Leon Febres Cordero.

President Rafael Correa said Thursday that the four-member commission — composed of a lawyer, two human rights activists and the father of two brothers who disappeared at the end of Febres Cordero's 1984-1988 government — is intended to "halt impunity."

Pedro Restrepo's two sons disappeared in January 1988 and are believed to have been killed by police, who mistook them for Colombian guerrillas. Their bodies were never found.

Interior Minister Gustavo Larrea said the human rights of "hundreds of citizens were systematically violated." He said there have been 327 cases of political assassinations, torture and disappearances that have gone unpunished.

The commission will have nine months to present a report, with a possible extension of three months.

"Impunity has made society, the state, close their eyes to the events that occurred in the country in a planned and systematic manner," Larrea said.

The Ecuadorean panel will follow others in Guatemala, Peru and Chile that have belatedly tried to reconcile the fates of thousands who disappeared in Latin America's so-called dirty wars. Colombia in 2000 created the National Commission for the Seeking of Disappeared People and authorized it to build a "unified registry" of the missing in its ongoing conflict.

Members of the Ecuadorean victims' families and human rights groups accuse the 76-year-old Febres Cordero, for decades a dominant figure in Ecuadorean politics, of ordering political killings during his government. He has strongly denied the accusations.

He ordered police to crush a small leftist urban guerrilla group Alvaro Vive, which took up arms during his government. The violence claimed the lives of a dozen or so people, including a kidnapped banker, policemen, bank guards and a handful of rebels. The dead included the rebels' leader, a former university student whose family charges was killed after being arrested.

In a news conference from his native port city of Guayaquil on Friday, Febres Cordero accused Correa of forming "a tribunal of the Inquisition" and said his political enemies want to try him "for having fought terrorism."

He called Correa "a totalitarian" who has revealed himself to Ecuadoreans.

"I've never run, nor will I run," the combative leader said, denying he planned to flee the country. "If they want to look for me, they know where to find me."

Febres Cordero resigned from Congress in January and retired from politics due to poor health.

Left with paradoxes in Ecuador

by Raúl Zibechi
From NACLA, May 3, 2007

Economist Pablo Dávalos served as undersecretary to Rafael Correa when the now-President was Minister of the Economy under the previous Administration of Alfredo Palacio in 2005. He’s an advisor to the Confederation of Indigenous Nationalities of Ecuador (CONAIE) and member of the Latin American Council of Social Scientists (CLACSO). Although he supported Correa’s successful presidential bid, he is skeptical of the direction the government is taking.

Davalos was undersecretary of the economy in 2005.

In Davalos’ opinion the government now represents the interests of a new middle class born out of the dollarization of the economy decreed during the 1999 financial crisis, which froze bank accounts and savings worth millions of dollars. Raúl Zibechi, a social movements scholar from Uruguay, spoke with Dávalos about Ecuador’s fledgling government.

How would you evaluate the performance of the Rafael Correa government in these first three months.

I see a lot of contradictory signs. On the one hand he’s a President that has a leftist discourse and is very critical of the political system, but he does not have roots in the left or in the social movements. His discourse legitimates a population tired of the party-ocracy (partidocracia), which is what Correa calls the corrupt politicians. But at the same time his cabinet is dominated by right-wing technocrats and members of the same parties he criticizes so much. The Agriculture Ministry is controlled by a member of PRIAN, the party of multibillionaire Álvaro Noboa, his staunchest opponent. The Ministry of Education was given to a member of the Democratic Left party, which was the party that introduced neoliberalism to Ecuador. The Transport Ministry is run by someone from the same party. The person in charge at the Ministry of the Environment is a representative of the mining multinationals, recycled from previous governments, who has granted more than four thousand environmental license to mining companies. You can’t have a policy of change with this type of cabinet.

Tell me about Correa’s economic program?

It’s interesting because it emphasizes employment and income distribution, thereby changing the touchstones of economic discourse from macroeconomic stability toward growth with employment and productive reactivation. But at the same time we see primary resource extraction through soy and corn cultivation for the use of biofuels. It’s alarming that the Yasuní National Park is being included in the exploitation of hydrocarbons [oil and gas]. In the 1990s, the brakes were put on the aggressive expansion of oil companies through the creation of national parks, which are the last redoubts of many uncontacted indigenous peoples. And one of those parks, Yasuní, was recently conceded to Brazil’s Petrobras and Cinopec, the Chinese oil company considered to have the worst ranking in environmental management.

What stage has been opened with the victory of Correa in the plebiscite on 
the Constituent Assembly for rewriting the constitution?

It’s a scenario characterized by polarization between the right and the government. The government is seeking to use that polarization as a hegemonic aspect so that the entire spectrum of the left and the social movements will have to rally behind Correa, which has basically been his strategy since the first round in the elections of last October.

Is there space for the movements and citizen organizations in the call to the Assembly?

We just voted for convoking the Constituent Assembly as well as for the statute regulating the process. In order to participate, lists have to be formed that then need to be validated with the collection of signatures, but the political parties don’t need to do this, which puts them at an advantage in comparison to civil society. And this raises a serious problem because many indigenous groups—who are a majority of Ecuador’s population—are not going to vote for the eventual candidates of the parties and so they’ll be left out of the Assembly. This is what already happened in Ecuador for the 1998 Constituent Assembly, and it’s the same thong happening now in Bolivia’s constitutional Assembly process.

What you mean is that the status quo political culture will not be weakened through the Assembly, but strengthened…

Yes, because those parties have well-oiled political machines and long-standing clients. While the Assembly remains in the hands of political parties, there is no chance of renovating a political culture branded with colonialism and exclusion.

How does the government explain this?

It argues for the necessity of reconstituting a supportive bloc of congressional representatives, which it had to do without during the electoral campaign. For Correa’s campaign to obtain the citizenry’s support, which it needed to win the elections, it had to make the concession of not presenting any candidates for congress, which was a total leap of faith. He did this because there were two candidates that were fighting for the support of the middle classes that were critical of the system: León Roldós and Correa. And in trying to win legitimacy before this constituency, he decided to take this risky step that sent a strong signal of not presenting candidates for congress [seen by many as a corrupt institution]. The move gave him enough legitimacy and credibility to reach the second round and win. We have to remember that Ecuador’s congress had an approval rating that did not surpass five percent.

Now we are in an interim period until the elections for representatives to the Assembly, but during that interim it is key for Correa to count on a bloc of representatives in congress to be able to govern the country and that bloc can only be obtained with the support of the certain parties. That is why the statute regulating the Assembly privileges the parties in comparison to other possible electoral groups.

You argue that Ecuador has created a new middle class, the same forajidos that toppled the presidency of Lucio Gutiérrez, and that this class constitutes Correa’s base. Is this a citizens’ movement that came out of the movement fatigue of the labor and indigenous movements? Could you characterize this social sector?

It’s a consequence of the dollarization. The middle class was never an important political actor, but dollarization creates the conditions so that it could. It generated new economic processes, but social ones, too, because dollarization is also a social and cultural phenomenon that later converts itself into a political phenomenon. When dollarization is instated, the loss of income is so dramatic the Ecuadorans flee the country en masse; out of a population of 12 million, two million leave in a span of five years, mostly to Spain. In 1999, when the financial system went bankrupt the first wave of immigrants sent back remittances to the tune of more than 200 million dollars. In 2006, remittances amounted to 3 billion dollars out of a total GDP of 44 billion. Oil exports account for 3.6 billion, which means that remittances have almost overcome our main export industry. They are already ten times greater than direct foreign investment. What’s more, this money goes almost directly directly into consumption, household budgets, and this allows us to sustain dollarization and the diversification of consumption.

The economy is going from production toward imports and rent seeking mechanisms. We now import potatoes and almost every other staple item in a standard “food basket.” National production merely complements what is imported. Quito, which has less than two million residents went from 180,000 cars to half a million is just five years.

Does this new middle class come from poor urban areas?

Urban and suburban, and also campesinos that have done well for themselves, but at the same time, society is polarizing because there are mechanisms, not just economic, but also legal and institutional that end up concentrating profits at the top, even as the economy is growing. Our GDP doubled in five years, but in that same time period the richest 20% of the country went from owning 45% of generated income to 51%. The poorest 20%, meanwhile earns barely 4% and keeps falling. This is all the result of the brutal growth of a dollarized economy.

But with the expansion of the flower-growing industry in the Andean highlands, there is also a change in the structure of production

Since the 1970s, Ecuador had a two-pronged export structure. ON the one hand was the oil sector with strong ties to the state, and on the other were the agro-exports from the coast—bananas, coffee, cacao and shrimp—controlled by the Guayaquil-based oligarchy. In the 1990s, a third sector in the highlands emerges linked to the export of flowers, which experiences the fastest growth under dollarization. It reaches 600 million dollars compared to 900 million in banana exports, and Ecuador is the world’s biggest banana exporter. Ecuador’s exports are worth 10 billion dollars, which for a small country is a hefty sum.

Why and how do the middle classes begin to play a political role?

The first case is in 1996 when Abdalá Bucaram is elected president. He was a populist supported by the marginalized in Guayaquil, whose corrupt and nepotistic presidency is contested by the indigenous movements and sectors of the middle class that constitute a pincer opposition and liquidate him in six months. But somehow the middle classes sort of moved to the back of the line behind the indigenous, who they later support in overthrowing Jamil Mahuad in January 2000.The first autonomous action of the middle classes really occurred under the government of Lucio Gutiérrez in clamoring for transparency. It was the so-called “velvet revolution.” The protests were attended by entire families in their SUVs, and some women even had their maids banging the pots and pans for them, a protest form that had never been seen in Ecuador before.

If that is the sector now supporting Correa, what are its objectives?

Moralizing the political system. They think the market is transparent and believe in it, which shows they are an ascendant social sector. They accuse the political system of being opaque, corrupt, of creating clientelism, and they’re right. They go to the market, consume, and now there are a lot of malls in Quito, and they see it as something transparent, and they want politics to function the same way, like the market.

What changes will the arrival of these successful middle classes produce within Ecuador’s political system?

The first thing to consider is that this class is the child of dollarization and, by extension, neoliberalism. And this is not just an economic model, but rather a model that first embeds itself in economic mechanisms, but that also generates a whole series of institutional, legal, political, symbolic and cultural shockwaves. There is a solid core that sustains this neoliberal model: in Argentina it was privatizations; in Ecuador it’s dollarization.

But doesn’t Correa want to change…

Exactly. The contradiction of Correa: he can’t change the political system, while maintaining dollarization. Dollarization is political: you can’t tell the united States that you don’t want the military base in Manta, but that you do want dollarization. The moment a country ascribes to the currency of another it converts itself into a kind of colony. Meanwhile, all this maintains itself with an aggressive policy of subsidizing the poorest, the losers of dollarization. The “human development bonus” [a subsidy] created at the insistence of the World Bank has doubled, going from 15 to 30 dollars, and on top of that there are subsidies for housing, credit for micro-enterprises, because the most vulnerable sectors have received the brunt of dollarization’s ill effects.

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Raúl Zibechi, a member of the editorial board of the weekly Brecha de Montevideo, is a professor on social movements at the Multiversidad Franciscana de America Latina and adviser to several grassroots organizations. This interview was first published by Lavaca.org, an Aregntina media collective. Translated from the Spanish by Teo Ballvé. Photo courtesy: Fotos, Comunidad Andina.

Ecuador refuses to participate in maneuvers with U.S.

Granma

QUITO, May 2.— Ecuador confirmed this Wednesday its refusal to participate in the UNITAS 2007 maneuvers because of an unacceptable attitude on the part of the United States.

A statement from the Ecuadorian Foreign Ministry revealed that this nation does not accept impositions and negations of control with respect to the entry of U.S. troops in maritime waters in order to carry out these exercises.

Such a decision motivated the Southern Command of that nation to cancel the venue for the aforementioned military operations in Ecuador and transfer it to Colombia.

“In the face of these unusual, unilateral, non-consulted and unacceptable decisions,” it has been decided not to take part in these training exercises that are also going ahead in Chile and Peru, stated the communiqué.

According to the Foreign Ministry, Ecuador has withdrawn from the exercises due to the fact that the United States failed to respond to its request that foreign vessels send a protocol signal on entering its territorial waters on the southern border with Peru.

A request such as this adheres to the protocol observed by these countries in 2003 when staging the operations.

These problems have prompted Ecuadorian President Rafael Correa to endorse the decision to suspend participation in the maneuvers. (PL)

Translated by Granma International