Left Wing Pragmatism III

Ecuador

It's oil that gives the Left it's power in Latin America. And Ecuador has lots of it.Ecuador to seek to rejoin OPEC: Correa And Canadian Petrocompanies are major investors, though they have sullied reputations having been implicated in the destruction of Ecuadors rainforests.

Kapawi Journal; Ecuador Indians Fend Off Oil Companies With Eco Tourism
But while many ecology-friendly getaways are operated by big tour companies or foreign entrepreneurs, the Kapawi Ecolodge and Reserve is run with the participation of the Achuar, the region's dominant Indian tribe.For the Achuar people, Kapawi is becoming an increasingly important symbol of their independence as they try to resist oil companies that want to drill here. The idea, indigenous leaders say, is to demonstrate options to oil exploration.

People and Forest of Intag…the forests of western Ecuador are among the hottest of the hot spots of the world, meaning that they are among the most endangered ecosystems—down to less than 10 percent of their original extent, mostly destroyed in the past 40 years—and also contain exceptionally large numbers of plant and animal species found nowhere else in the world. The extraordinary value of the Ecuadorian western forests, including the largest remaining remnant that includes Intag, is well known to biologists around the world and often cited in the scientific literature…

Now China and India the new Asian Dragons are investing in Ecuador.Which is real Free Trade but not the kind the Americans want.

China's two largest oil companies will link up to buy assets of EnCana Corp. in Ecuador for $1.42 billion, the second time in a month that Chinese producers won a bidding contest for overseas oilfields against India.China Petrochemical Corp. and China National Petroleum Corp. ``are partners in this venture,'' Liu Weijiang, a spokesman at China National Petroleum, said in Beijing today. Oil & Natural Gas Corp.'s bid may have been rejected because EnCana wouldn't agree to a term guaranteeing that Ecuador honor the sale, an official at the Indian company said.

In capitalist terms the oil companies have nothing to fear from a stable left government in Ecuador. Or they would be pulling out. But of course being pragmatic capitalists they won't. And they will pay the price to stay and profit from Ecuador's rich oil fields. Which includes their social responsibilities to the people and rainforests of Ecuador. The price of oil: how we live and die in the Amazon

Correa may default on Ecuadors debt however that has been done before, and not by a left government but by puppets of US Imperialism. So whats the beef. Nothing. Correa keeps the Ecuador dollar on par with the U.S. and uses oil profits for social programs.

If Venezuela is the example then consumers and workers benefit as more money in their hands means more money bouying up the local economies. Something any good neo-con understands. That's why the keep calling for tax cuts; to put money in the hands of the people. Which is where Ecuadors petrodollars will go with Correa.

Hugo Chavez Gains An Ecuadoran Ally

Ecuadorans voted for populist economist and self-styled "humanist, leftist Christian" candidate Rafael Correa who promised big changes in another Latin American country ruled up to now by and for the interests of capital and against the public welfare.

Correa will face huge challenges ahead when he takes office on January 15 in a country of 13 million, over 70% of whom live in poverty and who supported a man promising to help them with the kinds of social programs Hugo Chavez instituted in Venezuela. Correa sounded a positive tone last night at his campaign headquarters as the early returns showed him to be the likely winner. He told his supporters "It won't be Rafael Correa who assumes power in January; it will be the people." He'll be Ecuador's eighth president in the last decade including three of them driven from office by mass street protests against their misrule. In Mr. Correa, Ecuadorans expect something much different, and he promised to deliver it for them.

Correa said he'll deliver a "citizens' revolution" and supports beginning it by calling for a constituent assembly to write a new constitution, a pattern similar to the one Hugo Chavez followed after his election as Venezuela's president in 1998. He called for renegotiating the country's $16 billion foreign debt and hasn't ruled out an Argentine-style default to free up money for vitally needed social programs that include 100,000 low-cost homes, doubling the $36 "poverty bonus" 1.2 million poor Ecuadorans receive each month and raising the minimum wage.

Debt Restructuring

Correa, who has taught economics at San Francisco University in Quito, said during his four months as finance minister last year that he favored restructuring the nation's $11 billion of foreign bonds. During his campaign Correa said he wouldn't rule out an Argentine-style default. Argentina stopped payments on $95 billion of bonds in late 2001, the biggest sovereign default ever, two years after Ecuador defaulted on its own debt.

Born in Guayaquil, on the Pacific coast of Ecuador, Correa studied economics in Belgium and later at the University of Illinois at Urbana-Champaign. Correa was appointed finance minister in April 2005 by President Alfredo Palacio. El Comercio reported he was fired four months later for fighting with the World Bank and arranging to sell bonds to Venezuela without providing details to the president.

Ecuador's economy recovered from recession after the government defaulted on $6.5 billion of debt in 1999 and adopted the use of the dollar as its official currency in 2000. The IMF forecasts Ecuador's economy will expand 4.4 percent this year, buoyed by the rally in oil, the country's biggest export, after growing 3.9 percent in 2005.
Last night, Correa reiterated he may default on the country's debt and said Ecuador doesn't need a free trade agreement with the U.S. He also said he would maintain the dollar as Ecuador's currency, replace congress with a constituent assembly and try to ensure Ecuador, South America's fifth-largest oil producer, rejoins the Organization of Petroleum Exporting Countries after leaving it in 1992.
The switch to the dollar attracted investors, revived an insolvent banking system and helped reduce the inflation rate to 2.1 percent last year from 108 percent in 2000. In 2005, the economy expanded 4.7 percent, according to Standard & Poor's.

Correa's opposition comes from the United States in particular the agribusiness giant Dole Fruit company which benefits from its banana monopoly in Ecuador. This is what is meant by Free Trade, allowing American agribusinesses to maintain their colonial style monopolies in Latin Amercia. While European competitors find their African based markets undercut by companies like Dole. Dole Fruit company bought out the Chiquita Company which was part of the CIA backed United Fruit Company that maintained a monopoly in the region over the past fifty years.

Correa's opponent is the richest man in Ecuador who is the countries coffee, construction and Banana magnate. And a fruit cake.

Banana Magnate

Noboa, Ecuador's richest businessman and a proponent of free trade and foreign investment, may have scared some voters by his references to God and by falling to his knees at campaign rallies to pray for victory, said Daniel Linsker, an analyst at London- based Control Risks Group, a political risk consulting company. ``Noboa was an embarrassment,'' said Esperanza del Castillo, 61, who owns a gift store in San Antonio de Pichincha. ``Correa is an economist, he is academically capable of managing the economy and I like that.''

See

Left Wing Pragmatism II