Ecuador: Sovereignty Takes One Step Backwards

Interesting stuff going down in Ecuador. A fragile new Government installed after the ouster of Lucio Guitierrez is weakened after the forcing out of the popular Finance Minister, Rafael Correa (pictured above). Correa had earned the enmity of the US after pushing for a renegotiated free-trade deal and another deal that would have shared the country's oil wealth more with the poor rather than international banks. When the World Bank then amazingly canceled a promised $100 million loan, he arranged to make up the cost by selling bonds to Venezuela. Venezuela's offer to refine Ecuador's costly oil also pissed off Washington, who fears President Hugo Chavez's growing influnence in the region. Officially, the Government says he was fired for not clearing the moves, though his resignation letter claims that everything had been known by the President.

Or as the always revealingMiami Herald puts it: "Correa's belligerence toward the United States and multilateral lenders, combined with his support for populist domestic policies, made him the most popular member of the administration." For the Herald, standing up for the poor against the wishes of US corporations has always equalled "belligerance" in Latin America.

The current Ecuadorian President, Alfredo Palacio, was installed after protests forced out his predecesor, Lucio Guitierrez. Both men had initially secured support among the social and indigenous movements by promising reform, but lost it by not acting in the interests of the people. Now, Palacio's pick to replace Correa, Magdalena Barreiro, says she will not accept the post unless she received the backing of Correa - now the most popular political figure in Ecuador.

For more information on the sad situation in Ecuador and Correa's sacking, check the August 15, 2005 article by toni solo at dissidentvoice.org by clicking on the title above. And read more Latin insight by Central American activist toni solo's at his webpage.

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QUITO -(Dow Jones)- President Alfredo Palacio said Friday Ecuador would continue to strengthen its relations with Venezuela, and tried to downplay growing tensions between the Andean nation and multilateral lenders, not to mention the U.S. government.

Investors and analysts alike said Ecuador's increasing alignment with Venezuela concerns the market, given the virulent anti-American and interventionist policies championed by Chavez. INTERVENTIONIST.... WHO??

Correa is portrayed locally as the "good guy," standing up against U.S. companies, and that type of local reaction does not favorably impress the market, Estes said.

Even if Correa's replacement is someone credible and market friendly it is hard to.... (who needs to finish such a jem)

"Market Friendly" means accepting 40% of a country's budget to service external debt, sacrificing health, education and development projects...