Radical reforms in Ecuador: an example for Canada?

I am witnessing, for the first time in my life, a government that has won democratic power with a promise to implement badly needed political and economic reforms actually proceeding to do so.
		Rafael Correa

by Roger Hollander
From Rabble.ca
January 18, 2008

I heard it back then from my Liberal and even some of my Tory friends: “Ed Broadbent is by far the best candidate. Too bad he’s NDP. Otherwise I’d vote for him.” I am now hearing the same thing about Jack Layton.

Well, let me tell you something. Jack Layton, with his keen intelligence, his transparent honesty, his charismatic and winsome personality, his formidable drive and seemingly endless energy, his love for his country, and – above all – his commitment to social and economic justice; if Jack Layton were Ecuadorian, he’d be the country’s leader today.

Let me explain.

Ecuador, a small country with a population of about 13 million, is a country rich in natural resources: minerals and oil, bananas, fresh flowers, coffee, cocoa, rice, fish and shell fish – the list goes on and on. And yet, nearly three fourths of its people live in poverty and lack basic sanitation, health and educational resources.

It has been ruled by military dictatorships and, since the late 1970s, by democratically elected presidents who rarely are able to complete a term in office. Its Congress is made up of a plethora of political parties, most of which are beholden to entrenched economic interests. It has been commonly asserted and seldom contested that the country is simply ungovernable.

Enter Rafael Correa, a European and U.S. trained Professor of Economics who in 2005 became Finance Minister in a transition government. He had the audacity to stand up to the World Bank by demanding that excess revenues from petroleum be directed towards financing health and education programs rather than toward servicing the external debt. The now discredited ex World Bank President, Paul Wolfowitz, pressured the government to fire Correa, and the Minister became a hero in Ecuador overnight.

A dark-horse candidate with an organization created on the fly, Correa overwhelmed the traditional political parties and won the 2006 presidential election in a landslide. He was 43 years old, the same age as John F. Kennedy when he ascended to the presidency of the United States. Correa has no representation in the Congress, however, which continues to be dominated by three main obstructionist political parties.

Correa’s major campaign promise was to hold a popular referendum that would ask Ecuadorians if they wished to create a Constituent Assembly with plenary powers to restructure Ecuador’s political and economic system. That Referendum was held in April 2007 and the “Yes” vote was an astounding 81.7 percent. Elections for the 130-member Constituent Assembly were held in September of the same year, and Correa’s supporters (Acuerdo País) won 80 seats and another ten to fifteen seats went to progressive parties that are more or less in support of the president’s radical reform agenda. The three major traditional parties (Social Christian, PRIAN and PSP) are a small minority, winning a total of 32 seats between them, and enjoy the additional support of only a handful of delegates from other right leaning parties. How the mighty have fallen!

The Constituent Assembly began meeting in late November, and its first act was to suspend the Congress, a highly popular move.

Just before year’s end it passed its first major piece of legislation, a tax reform bill that addresses blatant omissions and closes enormous loopholes and went into effect on January 1, 2008. Its major elements include (all amounts in US dollars):

• A progressive inheritance tax, excluding estates of $50 000 or less, and with a ceiling of 35 percent on estates of $600 000 or more;

• A progressive income tax, excluding annual incomes of $7850 or less (the average annual salary in Ecuador is approximately $2500), with a ceiling of 35 percent;

• A progressive tax on unused acreage (enormous estates owned, and in many cases confiscated, by the country’s traditional elites are sitting fallow);

• An increase in “sin taxes” on cigarettes, liquor, perfume, videogames, sport rifles and ammunition, and incandescent light bulbs.

• An increase in the minimum wage from $170 to $200 monthly, and increase of 17.6 percent.

The vote for these measures at the Constituent Assembly was 90 in favour, 23 against, 6 abstentions, and 11 absent. The 90 “Yes” votes represent 69.2 percent of the Constituent Assembly’s total membership and 79.6 percent of those members present and voting.

It is estimated that the new taxes will generate revenue in excess of $400 million, virtually all of it coming from the pockets of the upper and upper middle classes.

These revenues will go directly into public education, urban infrastructure, public utilities such as water purification and sanitation, economic development, and public transportation.

Needless to say, the country’s economic elite, who since time immemorial have been getting away with murder with respect to taxation, are in a state of apoplexy. Correa has been unrelenting in his criticism of the mainstream media, who have attempted to derail his reform agenda with distortions and outright lies. He is being referred to as a dictator and compared to Adolph Hitler. This in the face of unprecedented popular support as reflected in a series of landslide election victories.

I am witnessing, for the first time in my life, a government that has won democratic power with a promise to implement badly needed political and economic reforms actually proceeding to do so. I see in Ecuador, for the first time since I began my annual extended visits thirteen years ago, a glimmer of hope for genuine change. Where this will lead – once the powerful economic forces behind the opposition to these reforms come together with a unified strategy – no one can predict.

I see Correa as a Kennedy/Trudeau-esque figure, but one who, in the context of Latin American political and economic realities, has no choice but to propose more radical reforms than one would expect in the U.S. or Canada. He has made a pronouncement, for example, that “authorizes” workers to take over businesses and industries that refuse to comply with the new tax structure and minimum wage.

Canadians should take a good look at what is happening in Ecuador. In the past 25 years we have seen our social safety net eroded, the loss of decent paying jobs, an increase in underemployment, social programs cut, employee benefits reduced, urban infrastructure deteriorating, and a shameful and exponential rise in homelessness.

I just hope that Canada doesn’t have to fall to the level of poverty and disintegration that has characterized Ecuador before we find a way to elect a genuine leader – I think you might know who I mean – with the vision and courage to address with conviction and vigour the inequalities and injustices that are anathema to the vast majority of Canadians.

Roger Hollander is a former Toronto Metro Councillor (1987-1995) who has lived much of the past 12 years in Ecuador.

Ecuadorian Naval Chiefs Resign

Quito, Jan 15 (Prensa Latina) Ecuadorian Navy Commanding General Homero Arellano and Naval Chief of Staff Luis Yepez resigned their posts Wednesday, Defense Minister Wellington Sandoval reported.

After presenting the resignations of Arellano and Yepez to Ecuador"s President Rafael Correa, Sandoval pointed out that the resignation of these officers would contribute as an example of subordination and recognition to Ecuadorian commanders.

Arellano and Yepez also announced their resignation in a news conference and said they were satisfied with having done their duty.

Arellano said that pressures from powerful sectors opposed to the changes underway in the nation for the loss of their privileges caused his resignation.

There are mafias that want to keep the management of oil resources out of national hands, he warned, referring to the recent entrusting of Petroecuador"s management to high naval officials.

Yepez ratified his support of the "government of changes and transformations for all Ecuadorians."

President Correa will appoint the new chiefs, and possibilities include Vice Admiral Johnny Estupiñan and Counter Admirals Livio Espinosa and Aland Molestina.

Estupiñan is now secretary general of the National Security Council (COSENA), Espinosa is a General Inspector of the Navy, and Molestina is Commander of the Naval Infantry (Ecuadorian Marines).

Ecuador to halt new mining concessions temporarily

Reuters, January 15: Ecuadorean President Rafael Correa on Tuesday asked a powerful assembly rewriting the constitution to halt the granting of new mining concessions to better control the country`s nascent sector. In a speech to mark his first year in office, Correa told the assembly, controlled by his party, to "suspend mining concessions until we have a new mining law."

The leftist government is planning to introduce later this year a series of reforms to the mining law to boost state participation in deals and tighten environmental control. Ecuadorean law makes it almost impossible for the government to reject requests to grant mining concessions.

Ecuador has little precious metal output, but dozens of foreign firms including Canada`s Aurelian Resources Inc and Corriente Resources Inc are exploring for gold and copper in the South American nation. Ecuador has awarded nearly 4,000 concessions, or 2.9 million hectares, angering environmentalists and some community activists who say mining projects pose a threat to nature.

Ecuador's Correa Vows to Restructure Finances, Administration

By Stephan Kueffner

Jan. 15 (Bloomberg) -- Ecuadorean President Rafael Correa said he wants to reorganize the country's administration and finances to reduce inequalities and fight corruption.

Creating seven regional administrations beyond the Quito and Guayaquil metropolitan areas and taking away budget earmarks for specific causes will decentralize the Andean country and reduce government waste, he said today.

``We know this will meet the resistance of vested interests,'' Correa, 44, said in a speech to the constitutional assembly marking his first anniversary in power.

Correa said plans to build new hydroelectric plants and improve the country's highways would reduce lop-sided income distribution and poverty. Wearing a white shirt embroidered with indigenous symbols, Correa toned down his usual criticism of the private sector, political adversaries, and the media.

``There was less rhetoric than on other occasions,'' opposition assemblyman Pablo Lucio Paredes said in an interview. ``The speech was centered on facts -- exaggerated, true, or untrue -- leaving less room for attacks.''

Paredes, a member of the Future Now political movement, said that Correa's occasional criticism of business revealed that the president still fails to see what Ecuador needs to develop its economy.

Correa said he wants future budgets to contain earmarks only for local governments and universities. Pre-set spending allocations for items such as irrigation projects or funds for development agencies promote corruption and limit the government's ability to prioritize spending, he said.

Municipal Government

Municipal governments are currently guaranteed 15 percent of the country's income. Correa said he would maintain that funding level and ensure that local officials would get funds electronically, rather than having to ask the Finance Ministry.

Ecuador's 24 provinces would continue to function below the nine regional administrations he proposed.

Creating regions with clearly defined administrative powers would limit the influence of the bureaucracy in Quito, the capital, said Maria Paula Romo, a member of Correa's Alianza Pais party.

``Right now, getting a legalized copy of a high school degree demands a trip to Quito,'' she said in an interview after Correa's speech. Correa needs the assembly's approval to create the regions, she added.

Spending on hydropower projects and roads will help integrate Ecuador and reduce its reliance on imported refined fuels and electricity, Correa also said.

Electricity Projects

He pledged to start construction of four major hydroelectric projects in the first four months of this year, and invest $1.5 billion in roadway construction in 2008, affecting 28 percent of Ecuador's road network. With the completion of planned power plants, Ecuador could become self- sufficient in electricity by 2013, he said.

Correa said that social spending last year for the first time in decades topped servicing of international debt.

``Social spending will take priority over payments to financial speculators,'' Correa said today.

Correa, who calls himself a friend of Venezuelan President Hugo Chavez, has previously said Ecuador won't pay back ``illegitimate'' debt. The Andean country has made interest payments during his term.

The country's benchmark 10 percent note due in 2030 rose 0.1 cent yesterday to 97.9 cents on the dollar, yielding 10.2 percent.

Marlon Santi: "A very great commitment and a challenge to build a new CONAIE"

Translated from ECUARUNARI

Patricio Zhingri T.

Santo Domingo de los Tsachilas, 13 January, 2008

A brief interview with ECUACHASKI. Marlon Santi, the new president of CONAIE, after being elected by consensus on 12 January at 15h30, granted us the first interview before choosing the rest of the Governing Council.

What is your feeling upon being elected by consensus as the new president of CONAIE?

It is a commitment and a very big challenge for the three years in this position, to work with the Nationalities and Peoples. I am making a strong commitment to visit all of the bases of the CONAIE in the first year.

What does CONAIE need now?

We have to begin on a strong footing; I come from a base where everything is regulated, controlled, behaviors are established by standards. We have to have mutual respect. The congress is the maximum authority for any conflict or internal difficulty, and that will be resolved through dialogue. We have to put in order those who want to hinder any process. We must be forthright and timely when things are not well.

Do you come from a base to build a new CONAIE?

We need to recover the image of CONAIE, as it was in 1990, when it was considered the strongest organisation in Latin America. A new CONAIE built upon the pillars with which it was created following the objectives of its many leaders. CONAIE has not advanced because of the interventions of several governments and the CIA.
So the new leadership must work very hard to achieve our goals because it is in the collective interest of all of our bases.

What do you think were the weaknesses in CONAIE over the last few years?

In entering into governments, especially with Lucio Gutiérrez, important leaders made commitments with the government and followed their policies, ignoring the mandate of the Nationalities and Peoples for other interests. This led to a significant decline in the indigenous movement. Then the State intervened directly to break CONAIE's unity, because the Indigenous movement has an historical basis and is a constant threat to the government of the day - when we propose territorial autonomy, the handling of our natural resources in their own territorial districts, when Indigenous nationalities manage their own biodiversity - all this is a threat to each government and to transnationals.

Do you have any lingering rancour over losing the last election in Otavalo?

No, there is no rancour. I personally went to congratulate Luis Macas, and continued to support CONAIE's process during these years. Nothing has happened, I maintain no rancour. Rather, we have worked together in this process. I have participated in several workshops and meetings, and I share the same proposals that were given to the Constituent Assembly. We also asked CONAIE to intervene in several territorial problems in the Amazon.

What should be the characteristics of a new leader?

Of course, if I lost in previous election, it is because I was not well known by the people, but I remain in the same line of work, the struggle, which is processing strongly.

As the new president of CONAIE, how would you evaluate the first year of this government?

Proposals from the Indigenous movement and other social sectors from the coast, highlands, and Amazon are not present on the national government's political agenda. Nor are they on the agenda of the Constituent Assembly. The government gives a lot of speeches and we hear that they are going to open petroleum explorations, that they are going to privatise water, rivers, páramos (high communal grasslands). So for the moment, nothing has changed. The only change is when the Indigenous movement rises up, because this is how we have made some advances in Collective Rights and other demands. Rafael Correa has not yet recognized the demands of the Nationalities and Peoples, and he must do so.

How will the government of the Nationalities and Peoples act with the current government of Correa?

The doors are open for the government, but we will draw up our own strategies and will not concern ourselves much with the government. If there are meetings it will be to present the demands of the Indigenous movement. I will not request public offices, with me you will see this: that the proposals of Nationalities and Peoples will be presented under a dialogue of diplomacy. If the government responds, good- otherwise, the bases will respond with action.

What is your evaluation of the work the Constituent Assembly?

There are many things that they are not taking into account. I am concerned that the Indigenous movement will not be included in the new Constitution, and that is a danger. If we want to make a new Ecuador, a new republic has to include the Nationalities and Peoples, after excluding us for 180 years of supposed republican life and more than 500 years since the conquest.

Who is Marlon Santi?
I was born in 1976 in Sarayaku. I remember that when it was 12 years old my mom was a leader, my dad was a kuraca (a chief). I learned a lot from them and was already involved in the struggle in the 1980s, against the large petroleum company ARCO. I studied for a while in Quito, but never forgot my principles and family formation, the Mother Earth, my respect for Pachamama, and being an integral part of the community. But recently I have participated in more than 5 years of a strong and rather painful struggle against petroleum invasions, militarisation, and the violation of human rights. During Lucio Gutiérrez's government, I received 17 warrants for my arrest, persecution, and assassination attempts. I always told Lucio Gutiérrez that I would prefer that he kill me in person so that the people would know that he killed a person fighting for the rights of Indigenous peoples.

Will your experiences struggling in Sarayaku help in the running of CONAIE?

I will join with the people who have the same problems especially in the Amazon, in the highlands, and on the coast, since the problems are same and we have to walk together. I am not a leader who sits at a desk. I am a leader who will be out in the field, fighting, with the masses.

What do you hope for in the formation of the rest of the Governing Council?

I hope that it is a conglomerate, a governing council in which there is experience and new faces - people who have come through organisations of the three regions, who come from the bases and through a real organisational process.

Do you have a call and message to the children and youth of the Nationalities, Peoples, and the rest of the country?

Look, someone once said that when the Indian is educated it will be revealed. So then, this is the moment for our youth and children to be educated. Only that way will we be able to confront the globalised system and know both worlds. In ours, it is necessary to value it as primordial, as a base for the demands of the Nationalities.

Patricio Zhingri T.

Comunicación ECUARUNARI
ECUACHASKI

Correa Says He Wants to Reorganize Ecuador Into Nine Regions

By Stephan Kueffner

Jan. 15 (Bloomberg) -- Ecuadorean President Rafael Correa said he wants to decentralize the government by reorganizing the country into nine regions.

Seven of the regions will have their own cabinet minister, while the metropolitan areas of Guayaquil and Quito won't, Correa said today in a speech on the first anniversary of the beginning of his four-year term. He said the move would help the country overcome regional inequalities.

During his election campaign, Correa championed a constitutional assembly as the cure for Ecuador's political instability and poverty. Voters elected 130 members to the assembly, which sent congress into recess in late November. Correa's Alianza Pais party won 80 of the seats.

Several opposition parties boycotted Correa's speech, saying the constitution called for the president to hold his speech before congress, not an assembly.

Marlon Santi: Commitment and Challenge to Reconstruct a New CONAIE in Ecuador

Written by Marc Becker From Upside Down World

Tuesday, 15 January 2008

At CONAIE Congress Ecuador’s Confederation of Indigenous Nationalities of Ecuador (CONAIE) has elected Marlon Santi to serve as its president for the next three years. Santi was elected by more than 1000 Indigenous delegates gathered at Santo Domingo de los Tsa'chilas from January 10-12, 2008, for the Third Congress of Indigenous Nationalities and Peoples of Ecuador. Indigenous activists founded CONAIE in 1986 as a national federation to represent Indigenous interests to the government. CONAIE first gained broad international attention when it led a protest in June 1990 that shut down the country. In 1995, CONAIE helped found the political movement Pachakutik to run candidates for political office. Santi was elected by consensus of the regional organizations CONAICE, ECUARUNARI, and CONFEINIAE that represent Indigenous peoples from Ecuador’s coast, highlands, and Amazon. He is a 32-year-old native of Sarayacu in the eastern Amazonian province of Pastaza. Sarayacu has long been a center of protest again petroleum exploration. After studying in Quito, Santi returned to Sarayacu where he was a tireless fighter against petroleum companies and corrupt governments. For his activism, Santi has received assassination threats. Santi vowed to continue CONAIE’s struggle against neocolonial domination. Official delegates and other observers arrived to the Congress on the morning of January 10 in a constant rain. The Congress opened with a traditional ceremony with the participation of several leaders of the different organizations, governmental representatives, members of the national assembly, and invited national and international representatives. Jaime Pilatuña, a Yachak (Shaman) of the Kitu Kara people, led a ceremony together with Hector Awavil, leader of the host Tsa'chila government, to create a harmonious space for the meeting. Children and women also made a presentation in the inaugural act. Juana Nenquimo, a member of Waorani nationality, spoke in 4 languages of their struggles against international oil, lumber and mining companies. The Congress began with an analysis of Ecuador’s current political situation. Jorge Guamán, National Coordinator for the Indigenous political movement Pachakutik, and Mónica Chuji, an Indigenous delegate to the Constituent Assembly, presented reports on their political activities. Guamán stated that Indigenous peoples and nationalities in Ecuador have maintained the cultural, social, and political structures necessary to create successful government processes. They have formed these under the traditional Andean code of “ama llulla, ama shuwa, ama killa,” or don’t lie, don’t steal, don’t be lazy. Luis Macas, outgoing CONAIE president, presented a report of his work during his three-year term. He referred to the Congress as a “minga” (a communal work party) to construct a new country that would belong to all Ecuadorians. “Even though some governments have done everything to divide us,” Macas said, “this Congress is a practical demonstration of our unity and brotherhood.” Humberto Cholango, leader of the highland regional federation Ecuarunari, said that “this congress is of vital importance because CONAIE is responding to the poverty, exclusion, mistreatment, and discrimination we have received from the government with proposals for life.” Constituent Assembly member Mónica Chuji read a letter from Alberto Acosta, president of the Constituent Assembly, in which he states that “the assembly will fight for the recognition of the rights and achievements of all Indigenous peoples and nationalities.” Acosta called for a unity of all Indigenous organizations. Acosta’s letter emphasized that Indigenous movements and its struggles against the oligarchy and colonial powers are of great transcendental importance to the social transformation that the country is experiencing. “The historical consciousness, the cultural inheritance of Indigenous peoples and nationalities are needed to build an inclusive and just society,” he said. At the Congress, Indigenous leaders declared their opposition to any policies that would lead to an extraction of natural resources from Ecuador, particularly petroleum and water. Instead, these are elements of strategic importance to the development of the country. Outgoing president Luis Macas emphasized that while these resources are not in the hands of the people, the country does not belong to everyone. A principle demand of the Congress was the recognition of Ecuador as a plurinational state. Delegates also appealed for the development of a social economy. Indigenous leaders called on the Assembly that is currently re-writing the country’s constitution to change government structures and the political system to end social exclusion and inequality. They presented an Integral Agrarian Reform plan to redistribute land, eliminate inequality, and to stop environmental destruction. Delegates to the congress ratified their unlimited support to the changes in Bolivia led by president Evo Morales. They identified those developments as an example for the entire continent of Latin American. Ecuarunari leader Humberto Cholango emphasized the Indigenous movement’s defense for the changes sweeping throughout the region. Cholango stated that Indigenous communities will not allow the oligarchy to destabilize their sister nations with the support of the United States government. The Congress elected Miguel Guatemal as vice-president of CONAIE. In addition to Santi and Guatemal, CONAIE’s governing council for the next three years will be comprised of Humberto Martínez (Organization), Silvio Chiripuwa (Fortification), Luis Champis Dirigente (Territory), Fredy Paguay (International Relations), Fausto Vargas (Education), Agustin Punina Dirigente (Health), David Poirama (Youth), Norma Mayu (Women), Janet Kuji Dirigente (Communication). The new leaders were sworn in by a ceremony of thanks to the Pachamama (Mother Earth) led by the Yachakuna (Shamans) Jaime Pilatuña and Carlos Pichimba.

Ecuador Correa Gives Year Review

Quito, Jan 15 (Prensa Latina) Ecuadorian President Rafael Correa will be reporting on his first year of performance Tuesday at the Constituent Assembly, after one year of promoting what he calls the people's Revolution.

Correa will travel to Montecristi's Ciudad Alfaro Complex, headquarters of the Assembly for a session with the attendance of the 129 Assembly members, and 480 guests.

This is the first time an Ecuadorian president reports on his management to Assembly members, because the National Congress was dismissed in December.

Correa had previously given account on his 2007 task in meetings with university students in the cities of Loja and Quito, where he referred to achievements in the political, economic, and social fields.

Despite criticism by conservative sectors, who blame the government for the poor 2.65 percent rise in the Gross Domestic Product, the president said massive investment in the social sector was more important.

ó We made more investments for the wellbeing of the people than for foreign creditors. We do not care about how well the rich are, but how better those who have less are, ó Correa stressed.

The president is also expected to ratify the reform process underway and announce the working guidelines for 2008, when nearly 2 billion dollars will be invested in the oil sector.

Marlon Santi is the new president of CONAIE

Translated from conaie.org, Jan 12, 2008
By consensus of all three regions of Ecuador (ECUARUNARI, CONAICE; CONFEINIAE), Marlon Santi is the new president of CONAIE and will preside over the Governing Council for 3 years. This presidential election did not meet any obstacles, so it can be seen that the unity of the Peoples is completely strengthened.

The electoral table has been formed, the 17 commissions complete their report.

The formation of the electoral commission who will be responsible for presiding over the election of the New Governing Council of the CONAIE: President of the electoral commission Angel Bonilla of the CAES; Secretary Roció Gualan, representative of the coastal Kichwa peoples; and Jose Gualinga, representative of the Kichwa of the Oriente; scrutineers of ballots - Maria Belen Paez of the Foundation Pachamama, First Spokesperson Vitel Aguavil of the Tsáchila Nation, Second Spokesperson Natalia Wray of APN, Third Spokesperson Gonzalo Guzman UOCE .

At this time we, the leaders of the three regions, pronounce our support for the candidature of Marlon Santi. It appears that he is a candidate that evokes the unity of the people.

The amphorae to conduct the voting are completely ready, the spirits of people are gradually rising, and all expect to have the best results that would allow continuation of the politics of the CONAIE.

Marlon Santi of the Amazon is the new president of CONAIE
Santo Domingo de los Tsachilas, January 12, 2008
Unanimously and with the support of the three regional Nationalities and Peoples Marlon Rene Santi Gualinga, was elected at 16h30 as the new president of CONAIE for the three year period 2007 to 2010.

Who is Marlon Santi?

A young man who was born in the year 1976 (32 years of age) in the parish of Sarayacu (Pastaza) situated in the heart of the Ecuatorian Amazon. He inherited his great examples of leadership and charisma from his forebears who fought against the oil companies. He studied in Quito, but never abandoned the principles and values of his people and community.

In the last 5 years he was a permanent and tireless campaigner against the invasion of the oil companies, especially during the corrupt and nepotistic government of Lucio Gutierrez, suffering permanent persecution, even assassination attempts. As Santi said in his first statements, "we need to start putting CONAIE in order, raising the pillars for which it was created, since in recent years we have have been greatly weakened by the encroachment of the governments of the day.

He has a defined line, clear and transparent, as a very important point of reference for the new generation of Nationalities and Peoples. So far there has been no change with the government of Rafael Correa.

Patricio Zhingri T.
Comunicación ECUARUNARI

Santo Domingo de los Tsáchilas, 11 January, 2008

Ecuador introduces bill to scrap key oil funds

QUITO, Jan 14 (Reuters) - Ecuadorean President Rafael Correa has introduced a bill to close three saving funds and transfer their $1.5 billion in windfall oil revenues to the national budget, government officials said on Monday.

The funds are earmarked for specific spending and restricted from government control. Some Wall Street analysts worry such a move could erode the country's savings capacity and make it vulnerable to external shocks such as a drop in oil prices or a slowdown in the U.S. economy.

Finance Minister Fausto Ortiz later said the money will be used for capital spending and that those funds will be added to the 2008 budget approved last year.

"We can reform the budget ... we do it everyday," Ortiz told reporters, adding that the budget could increase to around $15 billion from the current $10.3 billion when those funds and costs of oil derivatives imports are included.

Oil products imports are usually part of the budget of state oil company, Petroecuador, but the government has transferred those costs to the national budget to improve transparency. Ecuador expects to import around $3 billion in derivatives this year.

The bill is expected to be easily approved by the government-controlled assembly, which has taken over powers from Congress and is rewriting the constitution.

Correa, a leftist former economy minister, has worried investors with legislation that will increase state control over the economy.

The assembly in December approved a broad-ranging tax reform bill that set duties on unproductive lands and that forces some companies to pay in advance part of their income tax.

The three oil funds are the FAC, or savings and contingency fund; CEREPS, or special account to reactivate social development and production; and FEISEH, or energy and hydrocarbons investment fund.

A fourth fund named FEP, or stabilization fund, receives funds from the CEREPS.

A copy if the legislation was not immediately available.

Ecuador assembly to expel opposition leader Noboa

QUITO, Jan 12 (Reuters) - Alvaro Noboa, an Ecuador opposition leader and the country's richest man, will be stripped of his seat in a powerful assembly for not disclosing his personal wealth, a top assembly member said on Saturday.

"He is out ... the rules are not a game here," the head of the assembly, Alberto Acosta, told Reuters. The 130 members of the assembly, which is rewriting the politically unstable country's constitution, had until Friday night to declare their personal assets as part of the body's rules.

Acosta said the assembly, dominated by President Rafael Correa's party, would vote next week on Noboa's removal. He would be replaced by a member of his own party, Acosta said.

A spokesman for Noboa's PRIAN party was not immediately available for comment.

Noboa, a banana mogul, was Correa's main rival in the 2006 election and has been a leading critic of the leftist government. But Noboa's party has little popular support and holds few seats in the assembly.

The assembly has up to eight months to rewrite the constitution. In November, the assembly started work by temporarily closing down Congress and taking over its powers.

Correa, widely popular among Ecuadoreans for his tough stance against the political old guard, plans to use the assembly to pass legislation to boost state control over the oil-producing country's economy.

Ecuador Econo-Policy Stands on Own

Quito, Jan 11 (Prensa Latina) Ecuador now has an independent economic policy, without external dictates or interference from the International Monetary Fund and the World Bank, President Rafael Correa affirmed.

When highlighting the economic achievements by his government in the first year of management, Correa referred to an Ecuador with new concepts and vision for 2008.

Addressing thousands of students last night, he announced the restructuring of the public sector, the country's regionalization to decentralize, and rationalization of public finances, as part of the new economic policy.

Correa said neither inflation nor the country risk are the main problems, rather the lack of capacity to generate productive jobs.

Regarding that, he pointed out major steps were made in 2007 to solve that problem, but there is still much to be done.

Under-unemployment, the president warned, is another serious problem, and the government will spare no resources or efforts to improve that condition, he sustained.

The president finally called for youth to join actions to end with lies aimed at hindering the people's Revolution.

PetroEcuador Finds Evidence of Widespread Corporate Corruption

By Stephan Kueffner

Jan. 7 (Bloomberg) -- The new management at Ecuadorean state energy company PetroEcuador found evidence of widespread corruption at the company.

``There is theft in the tens of thousands, tens of millions, hundreds of millions of dollars,'' Admiral Fernando Zurita, president of PetroEcuador, told reporters in Quito today. ``We will find much more as a result of the review that we are making of oil contracts.''

Ecuador President Rafael Correa on Nov. 29 declared a state of emergency for the company, saying it was so badly run, he was forced to bring in navy officers to run the company.

``Previously there were not enough people to fight this,'' Zurita said. Some executives bought equipment for tens of millions of dollars only to let it rot in storehouses at subsidiaries, he said. ``I will discover who ordered those things and send them to his desk or home and demand my money back,'' Zurita said.

He also plans to set up a corporate area for the protection of the environment that will cost the company $55 million. The lack of in-house cleanup capacity has cost PetroEcuador $350 million over the past three years as private-sector companies have billed it to handle oil spills, Zurita said.

The company has a budget of $4.24 billion for 2008, up 72 percent from $2.47 billion last year, he said. Investment will almost triple to $2.06 billion from $724.57 million last year. Ecuador expects to spend $3.61 billion in importing fuels, up 20 percent from $3.01 billion last year.

Lacking Refining Capacity

The Andean country lacks refining capacity to meet domestic demand for gasoline and diesel despite being a member of the Organization of Petroleum Exporting Countries.

PetroEcuador's total output will reach 309,000 by the end of this year, Zurita also said, up from an estimate of 297,000 as recently as Dec. 20.

Ecuador, the smallest OPEC oil producer, has a daily output of about 500,000 barrels. Energy Minister Galo Chiriboga also said today that Ecuador will ask OPEC for a quota above 520,000 barrels a day in the near term as the country expects production capacity to reach that level this year. He added that he expected OPEC to agree.

Ecuadorian President Reshuffles Cabinet

Quito, Jan 3 (Prensa Latina) Ecuadorian President Rafael Correa carried out another cabinet reshuffle on Thursday, officially appointing Fernando Bustamante as Government and Police minister.

In a ceremony at Carondelet Palace, Correa entrusted Bustamante with the Executive portfolio he had been temporarily running.

Former Government Minister Gustavo Larrea was appointed Coordinating Minister of Internal and External Security.

Derlis Palacios was appointed as Coordinating Minister for Strategic Sectors and Veronica Sion was named Minister of Tourism.

Correa also announced the merger of the Department of Communication with that of Civil Service, which will be run by Vinicio Alvarado.

With these changes, the head of State declared concluded the Cabinet reshuffle, started in late November with changes in the Ministries of Transportation and the presidency of state-run oil company Petroecuador.

Ecuador's Congress defies shutdown

QUITO, Jan 3 (Reuters) - Ecuadorean lawmakers held a session of Congress on Thursday in defiance of a rival legislative body dominated by leftist President Rafael Correa's allies, stoking tensions in the volatile Andean country.

A special assembly charged with drafting a new constitution voted in November to temporarily close the opposition-led Congress and take on its legislative duties.

But about 60 of Congress' 100 lawmakers gathered at a hotel in the capital of Quito on Thursday. They did not meet at the Congress building for fear of provoking clashes with police, but promised to hold further sessions around the country.

"The goal here is to put an end to this nonsense," said Pedro Almeida, an opposition lawmaker. "In this country, we have to respect the rule of law and the constitution."

Analysts say Congress' lawmakers could join forces with influential mayors and business groups in a bid to scuttle Correa's leftist reforms and lead street protests against him.

Opinion polls show Correa's reforms are widely popular, in contrast with Congress, considered corrupt and inefficient by most Ecuadoreans.

Congress has repeatedly clashed with Correa over his leftist policies, leading to some lawmakers being fired by electoral authorities and scuffles with police last year.

Alberto Acosta, who leads the constitutional assembly loyal to Correa, said it will ignore any decisions taken by Congress' lawmakers. The government has warned it will not to allow Congress to reconvene.

Correa has expanded his powers since his election in 2006, promising to fight poverty through a "citizen's revolution," although critics call him an autocrat.

He has also spooked Wall Street with threats to default on foreign debt payments, and last year decreed a massive tax hike on oil firms operating in South America's No. 5 oil producer.

Ecuadoreans have forcibly ousted three presidents in 10 years as popular discontent with traditional political parties and outrage over corruption sparked street protests.

Ecuador Assembly Snubs Old Deputies

Quito, Jan 3 (Prensa Latina) After the announced intention of several Ecuadorian deputies to meet Thursday in the capital, the first vice president of the Constituent Assembly, Fernando Cordero, reaffirmed Congress was rendered inactive last year.

"The suspended deputies cannot retake their posts, have been separated from Congress, and the Constituent Assembly has assumed legislative functions until the referendum," Cordero highlighted.

He made his statements after Jorge Cevallos, the president of Parliament, in indefinite recess since November 29, informed he would meet with several of his colleagues.

The meeting would be to dialogue on the Assembly resolution, Cevallos said when rejecting the idea that it was a self-summoning.

According to analysts, the Assembly"s full powers make it an armoured institution, along with the popular support at the polls on September 30.

Upon the setting up of the Assembly, its members ratified Rafael Correa as Ecuadorian president, Lenin Moreno as vice president, and decreed an indefinite recess for the 100 congressional deputies.

Greg Palast Reports on the Battle Between Indigenous Ecuadorians and the U.S. Oil Giant Chevron

From Democracy Now!, 27 December, 2007
Investigative Journalist Greg Palast files this report from the rainforests of Ecuador, where an indigenous tribe is suing Chevron for $12 billion for contaminating the Amazon. We also play part of Palast’s interview with Ecuador’s President Rafael Correa.

Report:
AMY GOODMAN: Today, we spend the hour in Ecuador. In a few minutes, we’ll play an exclusive interview with the Ecuador president, Rafael Correa, conducted by investigative journalist Greg Palast. But we begin today’s show with this report filed by Greg Palast from the Amazon Rainforest in Ecuador. We’re going to bring you that report in a minute, but we’re going to go to a break first, and then we will go to the report on the peasants and indigenous Indians of Ecuador suing Chevron and then an extended interview with the Ecuadorian president. This is Democracy Now!, democracynow.org. Back in a minute.

[break]

AMY GOODMAN: We turn now to this piece by BBC investigative journalist Greg Palast for Democracy Now!

GREG PALAST: We’re flying past the snowcapped volcanoes of the Andes into the Amazon Rainforest for the rumble of the jungle, the biggest environmental slugfest in world history.

This is the battleground, the rainforest of Ecuador, as large as England, where the Amazon’s waters begin their 4,000-mile journey to the ocean.

To find Chevron’s opponents, we need to take a little boat ride. Deep in the rainforest are the Cofan Indians. No one knows how many thousands of years they have been here, living off what they could hunt, fish and craft from the river and jungle.

Is that a hat?

COFAN MAN: [translated] We use this to carry yucca, banana, corn and little animals we hunt. In the old days, we hunted with blowpipes. Now I have a shotgun.

GREG PALAST: Their main meal used to be monkey. But today’s menu is chicken.

In 1972, a helicopter landed, and everything changed. Chief Emergildo Criollo says the oil company obtained permission to drill from the Cofan speaking in Spanish, which the Indians didn’t understand.

CHIEF EMERGILDO CRIOLLO: [translated] They gave us candy, sugar, diesel fuel and cheese. The cheese smelled funny; we threw it into the jungle. They say we could rub oil on our skin to cure our aches and pains.

GREG PALAST: So they told you that if you put oil on your skin, it would make you better?

CHIEF EMERGILDO CRIOLLO: Si.

GREG PALAST: Speaking in Cofan, Cecilia Quenama said she lost a daughter to the pollution. I asked her why she blamed the oil companies.

CECILIA QUENAMA: [translated] Many children have died of strange new diseases, only since the drilling began.

CHIEF EMERGILDO CRIOLLO: [translated] I lost two sons. My three-year-old went swimming and began to vomit blood.

GREG PALAST: The Cofan say the damage to their health was caused by ChevronTexaco. Chevron says that’s nonsense.

Let’s go find out.

This pit is the result of an accidental puncture to a wellhead. Now, Texaco said that when it was operating these wells, you didn’t have many of these accidents. But that’s maybe because of this. It says, “PERSONAL & CONFIDENTIAL.” It says, “Reports are to be removed from the field division offices and destroyed.”

Like that. If you were here with me, you could smell it. Yum.

The Cofan say this is standard operating procedure. They drink this stuff. They swim in it. And they breathe it.

In Texas, they call this “sky dumping.” That’s not Chevron’s smoke; it’s Ecuador’s own state oil company Petroecuador. Chevron’s long gone.

I can’t show you all the leaking pits. There are over 200 on the lands of the Indians and settlers, like this one. Most people would be thrilled to find oil on their property, but not Manuel Salinas. All he’s got out of it, he says, is an empty oil drum, pustules all over his arms and a stomach ailment slowly eating him alive.

MANUEL SALINAS: [translated] I’m suffering these terrible, terrible rashes. It feels like my head is splitting apart.

GREG PALAST: And it’s back over the Andes volcanoes to the other side of the mountain for the other side of the story.

Now it’s Chevron’s turn. Satanic polluter or innocent victim? Let’s ask them.

CHEVRON LAWYER 1: Scientifically has nobody proved that crude causes cancer, OK?

GREG PALAST: I asked Chevron’s lawyers about the rising number of cancers among Indian children.

CHEVRON LAWYER 2: Did they show you a medical certificate?

GREG PALAST: No.

CHEVRON LAWYER 1: And it’s the only case of cancer in the world? How many cases of children with cancer do you have in the States, in Europe, in Quito? If there is somebody with cancer there, first they have to prove that it’s caused by crude or by petroleum industry, and second, they have to prove that it is our crude, which is absolutely impossible.

GREG PALAST: So the Indians are attempting to do the impossible. They’ve put on war paint and feathers, and, heavily armed with lawyers, they are filing a new lawsuit. They are demanding no less than $12 billion from ChevronTexaco to clean up their forest.

A bunch of natives in feathers in the jungle demanding $12 billion from an international oil company would be just a sad joke, but across the Andes in Ecuador’s capital, something happened which changed everything. An uprising of indigenous tribes and urban poor when I was here two years ago forced the president to flee out the back door of the presidential palace. In new elections, the left whips George Bush’s allies with the campaign theme song, the 1980s Twisted Sister hit “We’re Not Gonna Take It Anymore.” The new government kicked out the last of the big US oil companies, Occidental Petroleum. And just this month, Ecuador’s new president, Rafael Correa, flew to Saudi Arabia to rejoin the OPEC cartel and told George Bush to shut down the US military base in Ecuador, unless Bush gave Ecuador a base in Florida.

Behind little Ecuador is big Venezuela and its larger-than-life leader, Hugo Chavez. Chavez has given Ecuador a quarter-billion dollars and the political weapons to stand up to George Bush.

But Chevron has a few friends in Washington. US Secretary of State Condoleezza Rice served on Chevron’s corporate board for ten years and is the only member of George Bush’s cabinet who can carry 30 million gallons of crude oil. Chevron named a supertanker after her.

Now, Chavez stands with Ecuador’s leaders, and Ecuador’s leaders are standing with those suing Chevron.

We caught up with the man who designed the new alliance with Hugo Chavez, the powerful incoming president of the Constitutional Assembly, Alberto Acosta. And he’s architect of the plan to return Ecuador to OPEC and take down the US oil companies like Chevron. Assembly President Alberto Acosta, I asked him about Chevron’s treatment of the Indians.

ALBERTO ACOSTA: [translated] Chevron is responsible for the environmental and social destruction in the Amazon, and that’s why they’re on trial.

GREG PALAST: What if every small nation on the planet sued big oil companies, big US oil companies, for damage created years ago? Wouldn’t that bring the entire worldwide oil industry to a stop?

ALBERTO ACOSTA: [translated] What we should ask is not whether that will create chaos in the oil industry, but whether the oil industry is creating chaos in the world.

GREG PALAST: What about his new alliance with Hugo Chavez?

ALBERTO ACOSTA: [translated] We don’t have an imperialist relationship with Venezuela. We are brother countries, building a whole new Latin America.

GREG PALAST: The conflict between Indians and Chevron is becoming a battlefield in a war between Bush and Chavez. Not everyone’s happy about the new oil order. One dissenter asked us to meet him at the Hotel Quito.

This drink is called the “Spirit of Ecuador.” Oh, that’s good. Fabian Loza is relaxing after a long day as Ecuador’s top television newscaster.

Do you think Acosta’s demands on Chevron and the oil companies—

FABIAN LOZA: Yeah.

GREG PALAST: —are demagoguery, are just—are false?

FABIAN LOZA: No. I think it’s more dangerous. I think Acosta hates the United States, hates Occidental. He loves socialists. He loves, loves Chavez. He loves Cuba. He don’t like petroleum company, you know? Acosta is very, very left, and he is the new president of Assembly.

GREG PALAST: He raises questions about the environmentalists suing Chevron.

FABIAN LOZA: Environment activist people are communists in the past. Now, they are over green but red down, like a sandia. What’s that mean in English?

GREG PALAST: Right. Oh, like a watermelon.

FABIAN LOZA: Yeah, watermelon.

GREG PALAST: Green on the outside, red on the inside.

As we left, the oil minister of the old regime waved goodbye, and I headed off to the jungle to meet one of these so-called watermelons. This is the Cofans’ lawyer for their last filing, twenty-seven-year-old Julio Prieto. He describes the difference between his legal team and ChevronTexaco’s.

JULIO PRIETO: Here comes, in one yellow car, two lawyers and one technician. Here they come, Texaco’s convoy, with ten big white trucks and—I don’t know. At least four of them are full of bodyguards, well-armed bodyguards, because they’re still thinking that we are dangerous around here.

GREG PALAST: I asked him why he’s not suing Ecuador’s own oil company.

Isn’t it easy to blame the big rich gringos who left the country fifteen years ago, and it’s a mess right now?

JULIO PRIETO: But Ecuador has done bad. Now we are thinking about suing Petroecuador, too. But that’s not an excuse for Texaco to go away.

GREG PALAST: And that really burns up the lawyers for the American companies.

CHEVRON LAWYER 2: So they’re looking for deep pockets, simple as that. That’s all what they want.

GREG PALAST: They’re just going after rich gringos.

CHEVRON LAWYER 1: Exactly.

CHEVRON LAWYER 2: That’s—it’s the largest fraud in the history.

GREG PALAST: Is ChevronTexaco just an easy target for lawyers backed by the new oil-charged politicians of South America? Or is the new oil order a chance for long-delayed justice for long-ignored natives? And what happens to this jungle and the Cofan when Ecuador’s own oil company begins new drilling? Chevron versus rainforest Indians or Bush versus Chavez, whatever you call it, it’s just another front in the war over that dark commodity that’s left half the world in flames. For Democracy Now!, this is Greg Palast.


AMY GOODMAN: This is Democracy Now!, democracynow.org, the War and Peace Report. When we come back from our one-minute break, Greg Palast’s exclusive interview with the President of Ecuador. Stay with us.

[break]

AMY GOODMAN: Rafael Correa was elected president of Ecuador just over a year ago. The leftist economist grew up in poverty. He won a surprise victory over banana multimillionaire Alvaro Noboa. Elected in the midst of a debt crisis, Correa’s victory was seen as further proof of Latin America’s leftward turn.

He is now setting out to reverse the course of Ecuador’s economic and political history. Over the past year, President Correa has called for renegotiating Ecuador’s external debt, opposed a free-trade pact with the United States, and set up a Constitutional Assembly. As Finance Minister in 2006, Correa helped end Ecuador’s contract with US oil giant Occidental. Since being elected president, he has also pledged to shut down the sole US military base in South America.

Rafael Correa taught at the University of Illinois in Urbana-Champaign. But he’s also personally acquainted with poverty and what he calls “the human drama of migration.” When banana prices hit rock bottom in the ’60s, Correa’s family was badly hit. Desperate to get to the United States, his father served as a drug mule but was arrested and spent four years in a US prison.

Today, we bring you an exclusive Greg Palast interview with Ecuador’s President Rafael Correa. He talks about the lawsuit against Chevron, ending his country’s debt, his relationship with the United States and Venezuela, his dreams for Ecuador and his own personal history. Greg Palast did the interview in Ecuador.

GREG PALAST: Let me ask you, there’s a massive multibillion-dollar lawsuit against ChevronTexaco for supposedly destroying your rainforest. What if every little nation on the planet decided to sue oil companies for billions? Wouldn’t that disrupt oil production worldwide?

PRESIDENT RAFAEL CORREA: Well, with these lawsuits, well, they don’t go to interrupt the oil production in the third world. They go to push these big international companies in order to be a lot more careful when they want to extract our oil, because they did and they do in the third world things that they don’t do in the first world. So it’s a double standard that they have.

GREG PALAST: Well, according to Chevron—and I’ve spoken to them—they said that they operate very cleanly, just as they do in the US.

PRESIDENT RAFAEL CORREA: Well, OK, yes.

GREG PALAST: I’ll tell you what they’re saying.

PRESIDENT RAFAEL CORREA: And also Cinderella cheats and a lot of things, yeah.

GREG PALAST: And they blame your oil company. They say it’s your fault.

PRESIDENT RAFAEL CORREA: That is not true. Of course, our oil company has also done a lot of damage in the rainforest, but it is very clear that the problem comes from the ChevronTexaco period, OK?—Texaco period, because at the beginning it was just Texaco, so there are a lot of evidence about that.

GREG PALAST: Well, but here’s the problem. First of all, can they get a fair trial here? They say that there’s no chance that they can get a fair trial here.

PRESIDENT RAFAEL CORREA: Always there is a pretext, excuse in order to avoid the responsibilities, you know? We think that they can have a fair trial here. I cannot—the evidence is there, of course. They are blaming our oil company, but before our oil company took over the exploitation, the damage was there.

GREG PALAST: If your courts rule against ChevronTexaco, how in the world are you going to collect? They have nothing here. How is little Ecuador going to collect against big Chevron?

PRESIDENT RAFAEL CORREA: Well, that will be a problem. It’s not a public lawsuit. It’s a lawsuit followed by indigenous communities from the Amazonia. Any way we go to support [inaudible] or in order to collect the money, if they win the lawsuit, but, well, that will be a precedent, because we can do the same thing if, for instance, Occidental, a lot of oil companies are following lawsuits against the Ecuador government. So we can follow the same strategies we want. How in the world they can collect the money? It’s a demonstration of faith. So I think their own United States, their own international community should impose to ChevronTexaco [inaudible] the moral duty of paying this money.

GREG PALAST: Well, besides the moral duty, there are no Chevron assets in Ecuador anymore.

PRESIDENT RAFAEL CORREA: Well, of course.

GREG PALAST: But there are billions in Chevron assets in Venezuela. Will your friend Hugo Chavez help you collect if your citizens win?

PRESIDENT RAFAEL CORREA: You know, it’s not a government problem. It’s not our lawsuit. It’s a private lawsuit. So—but I think there is a moral issue here. So it’s not possible to have this kind of impunity, if this indigenous community wins the lawsuit against ChevronTexaco. So in this case, we think that the moral duty of the international community is to push to ChevronTexaco in order to pay this money.

GREG PALAST: Will you call on President Chavez or others to help you enforce—protect your citizens in the rainforest?

PRESIDENT RAFAEL CORREA: I will call the whole international community. Always you are giving us moralist speeches, advice about economic policy, social policy, environmental policy, moral policy, etc. So we are sure that in this case you will not support this indigenous communities against a huge, a big, a very powerful transnational, ChevronTexaco.

GREG PALAST: Do you think that the US government is going to support your attack, your government’s attack, your people’s attack on the oil company that Condoleezza Rice came from?

PRESIDENT RAFAEL CORREA: It’s not an attack. It’s justice. So we expect—yes, we hope that the US government supports this, if you want, this claim.

GREG PALAST: Now, you’ve thrown Occidental Petroleum out. You have forced ChevronTexaco out of your country. What is Ecuador’s problem with US oil companies?

PRESIDENT RAFAEL CORREA: What is the problem of the US company [inaudible]? Because we are not crazy. We are—our indigenous people are fighting against ChevronTexaco [inaudible], you know? You can see our rainforest before Petroecuador. It’s not true that the fault is in Petroecuador. You know, before Petroecuador, we already had a lot of damage in our rainforest. And also with Occidental, it’s very clear that they break up their contracts on the Ecuadorian law. So it’s not—


AMY GOODMAN: You’ve been watching and listening to an interview with the Ecuadorian President Rafael Correa, conducted by Greg Palast in Ecuador. We are breaking out of this interview because of breaking news from Pakistan.

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Ecuador hikes private sector wages by 17.6 pct

QUITO, Dec 27 (Reuters) - Ecuador on Thursday decided to hike the minimum salary for private sector workers by 17.6 percent next year in a move that could fuel more tensions between the leftist government and business groups.

The increase that will set the minimum wage at $200 per month is one of the largest since Ecuador adopted the U.S. dollar as its national currency in 2000 after a crippling economic crisis.

"We have decided ... that starting on Jan. 1 of 2008 the remuneration will be $200," Labor Minister Antonio Gagliardo told reporters in Quito. The government made the decision after business owners and workers failed to reach an agreement.

Ecuador expects to register inflation between 2.7 and 3.2 percent in 2008.

President Rafael Correa, a leftist former economy minister, has vowed to battle the oil-producing country's rich elite and help the poor majority.

He has clashed with business leaders over his proposed legislation to reform the tax law, which could force businesses to pay in advance part of their income tax and hike duties on unproductive lands.

Business trade groups says Correa's plans to boost state control over the economy will erode the Andean country's finances in the long-run.

A Quechua Christmas Carol

Good and Evil at the Center of the Earth:
A Quechua Christmas Carol
by Greg Palast
http://www.gregpalast.com/

December 24th, 2007

[Quito] I don't know what the hell seized me. In the middle of an hour-long interview with the President of Ecuador, I asked him about his father.
I'm not Barbara Walters. It's not the kind of question I ask.
He hesitated. Then said, "My father was unemployed.”
He paused. Then added, "He took a little drugs to the States... This is called in Spanish a mula [mule]. He passed four years in the states- in a jail.”

He continued. "I'd never talked about my father before."

Apparently he hadn't. His staff stood stone silent, eyes widened.

Correa's dad took that frightening chance in the 1960s, a time when his family, like almost all families in Ecuador, was destitute. Ecuador was the original "banana republic" - and the price of bananas had hit the floor. A million desperate Ecuadorans, probably a tenth of the entire adult population, fled to the USA anyway they could.

"My mother told us he was working in the States."

His father, released from prison, was deported back to Ecuador. Humiliated, poor, broken, his father, I learned later, committed suicide.

At the end of our formal interview, through a doorway surrounded by paintings of the pale plutocrats who once ruled this difficult land, he took me into his own Oval Office. I asked him about an odd-looking framed note he had on the wall. It was, he said, from his daughter and her grade school class at Christmas time. He translated for me.

"We are writing to remind you that in Ecuador there are a lot of very poor children in the streets and we ask you please to help these children who are cold almost every night.”

It was kind of corny. And kind of sweet. A smart display for a politician.

Or maybe there was something else to it.

Correa is one of the first dark-skinned men to win election to this Quechua and mixed-race nation. Certainly, one of the first from the streets. He'd won a surprise victory over the richest man in Ecuador, the owner of the biggest banana plantation.

Doctor Correa, I should say, with a Ph.D in economics earned in Europe. Professor Correa as he is officially called - who, until not long ago, taught at the University of Illinois.

And Professor Doctor Correa is one tough character. He told George Bush to take the US military base and stick it where the equatorial sun don't shine. He told the International Monetary Fund and the World Bank, which held Ecuador's finances by the throat, to go to hell. He ripped up the "agreements" which his predecessors had signed at financial gun point. He told the Miami bond vultures that were charging Ecuador usurious interest, to eat their bonds. He said ‘We are not going to pay off this debt with the hunger of our people. ” Food first, interest later. Much later. And he meant it.

It was a stunning performance. I'd met two years ago with his predecessor, President Alfredo Palacio, a man of good heart, who told me, looking at the secret IMF agreements I showed him, "We cannot pay this level of debt. If we do, we are DEAD. And if we are dead, how can we pay?" Palacio told me that he would explain this to George Bush and Condoleezza Rice and the World Bank, then headed by Paul Wolfowitz. He was sure they would understand. They didn't. They cut off Ecuador at the knees.

But Ecuador didn't fall to the floor. Correa, then Economics Minister, secretly went to Hugo Chavez Venezuela's president and obtained emergency financing. Ecuador survived.

And thrived. But Correa was not done.

Elected President, one of his first acts was to establish a fund for the Ecuadoran refugees in America - to give them loans to return to Ecuador with a little cash and lot of dignity. And there were other dragons to slay. He and Palacio kicked US oil giant Occidental Petroleum out of the country.

Correa STILL wasn't done.

I'd returned from a very wet visit to the rainforest - by canoe to a Cofan Indian village in the Amazon where there was an epidemic of childhood cancers. The indigenous folk related this to the hundreds of open pits of oil sludge left to them by Texaco Oil, now part of Chevron, and its partners. I met the Cofan's chief. His three year old son swam in what appeared to be contaminated water then came out vomiting blood and died.

Correa had gone there too, to the rainforest, though probably in something sturdier than a canoe. And President Correa announced that the company that left these filthy pits would pay to clean them up.

But it's not just any company he was challenging. Chevron's largest oil tanker was named after a long-serving member of its Board of Directors, the Condoleezza. Our Secretary of State.

The Cofan have sued Condi's corporation, demanding the oil company clean up the crap it left in the jungle. The cost would be roughly $12 billion. Correa won't comment on the suit itself, a private legal action. But if there's a verdict in favor of Ecuador's citizens, Correa told me, he will make sure Chevron pays up.

Is he kidding? No one has ever made an oil company pay for their slop. Even in the USA, the Exxon Valdez case drags on to its 18th year. Correa is not deterred.

He told me he would create an international tribunal to collect, if necessary. In retaliation, he could hold up payments to US companies who sue Ecuador in US courts.

This is hard core. No one - NO ONE - has made such a threat to Bush and Big Oil and lived to carry it out.

And, in an office tower looking down on Quito, the lawyers for Chevron were not amused. I met with them.

"And it’s the only case of cancer in the world? How many cases of children with cancer do you have in the States?" Rodrigo Perez, Texaco's top lawyer in Ecuador was chuckling over the legal difficulties the Indians would have in proving their case that Chevron-Texaco caused their kids' deaths. "If there is somebody with cancer there, [the Cofan parents] must prove [the deaths were] caused by crude or by petroleum industry. And, second, they have to prove that it is OUR crude – which is absolutely impossible.” He laughed again. You have to see this on film to believe it.

The oil company lawyer added, "No one has ever proved scientifically the connection between cancer and crude oil." Really? You could swim in the stuff and you'd be just fine.

The Cofan had heard this before. When Chevron's Texaco unit came to their land the the oil men said they could rub the crude oil on their arms and it would cure their ailments. Now Condi's men had told me that crude oil doesn’t cause cancer. But maybe they are right. I'm no expert. So I called one. Robert F Kennedy Jr., professor of Environmental Law at Pace University, told me that elements of crude oil production - benzene, toluene, and xylene, "are well-known carcinogens." Kennedy told me he's seen Chevron-Texaco's ugly open pits in the Amazon and said that this toxic dumping would mean jail time in the USA.

But it wasn't as much what the Chevron-Texaco lawyers said that shook me. It was the way they said it. Childhood cancer answered with a chuckle. The Chevron lawyer, a wealthy guy, Jaime Varela, with a blond bouffant hairdo, in the kind of yellow chinos you'd see on country club links, was beside himself with delight at the impossibility of the legal hurdles the Cofan would face. Especially this one: Chevron had pulled all its assets out of Ecuador. The Indians could win, but they wouldn't get a dime. "What about the chairs in this office?" I asked. Couldn't the Cofan at least get those? "No," they laughed, the chairs were held in the name of the law firm.

Well, now they might not be laughing. Correa's threat to use the power of his Presidency to protect the Indians, should they win, is a shocker. No one could have expected that. And Correa, no fool, knows that confronting Chevron means confronting the full power of the Bush Administration. But to this President, it's all about justice, fairness. "You [Americans] wouldn't do this to your own people," he told me. Oh yes we would, I was thinking to myself, remembering Alaska's Natives.

Correa's not unique. He's the latest of a new breed in Latin America. Lula, President of Brazil, Evo Morales, the first Indian ever elected President of Bolivia, Hugo Chavez of Venezuela. All "Leftists," as the press tells us. But all have something else in common: they are dark-skinned working-class or poor kids who found themselves leaders of nations of dark-skinned people who had forever been ruled by an elite of bouffant blonds.

When I was in Venezuela, the leaders of the old order liked to refer to Chavez as, "the monkey." Chavez told me proudly, "I am negro e indio" - Black and Indian, like most Venezuelans. Chavez, as a kid rising in the ranks of the blond-controlled armed forces, undoubtedly had to endure many jeers of "monkey." Now, all over Latin America, the "monkeys" are in charge.

And they are unlocking the economic cages.

Maybe the mood will drift north. Far above the equator, a nation is ruled by a blond oil company executive. He never made much in oil - but every time he lost his money or his investors' money, his daddy, another oil man, would give him another oil well. And when, as a rich young man out of Philips Andover Academy, the wayward youth tooted a little blow off the bar, daddy took care of that too. Maybe young George got his powder from some guy up from Ecuador.

I know this is an incredibly simple story. Indians in white hats with their dead kids and oil millionaires in black hats laughing at kiddy cancer and playing musical chairs with oil assets.

But maybe it's just that simple. Maybe in this world there really is Good and Evil.

Maybe Santa will sort it out for us, tell us who's been good and who's been bad. Maybe Lawyer Yellow Pants will wake up on Christmas Eve staring at the ghost of Christmas Future and promise to get the oil sludge out of the Cofan's drinking water.

Or maybe we'll have to figure it out ourselves. When I met Chief Emergildo, I was reminded of an evening years back, when I was way the hell in the middle of nowhere in the Prince William Sound, Alaska, in the Chugach Native village of Chenega. I was investigating the damage done by Exxon's oil. There was oil sludge all over Chenega's beaches. It was March 1991, and I was in the home of village elder Paul Kompkoff on the island's shore, watching CNN. We stared in silence as "smart" bombs exploded in Baghdad and Basra.

Then Paul said to me, in that slow, quiet way he had, "Well, I guess we're all Natives now."

Well, maybe we are. But we don't have to be, do we?

Maybe we can take some guidance from this tiny nation at the center of the earth. I listened back through my talk with President Correa. And I can assure his daughter that she didn't have to worry that her dad would forget about "the poor children who are cold" on the streets of Quito.

Because the Professor Doctor is still one of them.

Ecuador's Correa popularity drops, but still high

QUITO, Dec 24 (Reuters) - Ecuadorean President Rafael Correa's popularity dropped eight points in December, but after nearly a year in office his approval rating remained high at 64 percent, a Cedatos-Gallup poll showed on Monday.

Correa, a left-wing economist who took office in January, is popular among the poor for his pledges to raise taxes on the wealthy and tough stance against foreign oil companies.

The approval rating of a temporary assembly set up by Correa to draft a new constitution plunged to 43 percent from 62 percent in November, as Ecuadoreans grew frustrated by the slow pace of reforms.

Congress, which the assembly suspended in November, had only a 19 percent popularity when it closed. The assembly is controlled by Correa's party and has lawmaking powers.

The assembly is expected to approve tax and banking reform legislation that aims to boost state control over the Andean nation's economy.

Correa's approval ratings and credibility dropped due to the 44-year-old's confrontational attitude toward opponents and the media, polling company Cedatos said.

Some analysts believe Correa could soften his reforms if his popularity continues to drop in the politically unstable country where three president have been toppled in 10 years.

The survey interviewed 1,289 people in five major cities across the country between Saturday and Sunday. It had a 3.4 percent margin of error.