Ecuador: a hot summer

Cuatro semanas de movilizaciones callejeras en contra y a favor del gobierno de Rafael Correa, previa a la visita del Papa Francisco. 

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Youth concentration in support of Rafael Correa'sgovernment, Quito July 2 2015


Many have wondered if the visit of Pope Francis to Ecuador (5-8 July) will allow for a truce in the street mobilizations against and in support of the government of Rafael Correa, mobilizations that have already lasted four consecutive weeks.


Spokespersons for the Ecuadorian Episcopal Conference have called on both believers and non-believers to undertake a sincere dialogue and to abandon aggressive attitudes during the papal visit. But the opposition have declared that the protest demonstrations will continue, even if this disrupts the visit.


The motives that spurred the protests were the bills for the "Organic Law for the Distribution of Wealth" (inheritance tax) and another for a capital gains tax, that the executive branch sent to the National Assembly early in June. The first of these establishes a progressive tax would start at 2.5% for an inheritance of over 35.400 dollars and reach 47.5% for inheritances over 566.400 dollars.


According to government spokespersons, the law will affect only two per cent of the population, the objective being to avoid tax evasion via trust funds and to achieve a "better distribution of wealth by strengthening taxation in those segments where there is greater concentration".


The capital gains tax basically aims at those who "are enriched in an illegitimate way" through speculation on holdings of real estate and who benefit from rising prices when the State intervenes through carrying out public works.


Counting on a comfortable majority in the National Assembly, the government thought that these laws would pass without much problem, as has happened with many others in recent years. But this time the reaction was furious on the part of those affected, and also of others who are not, but found in them a pretext to stir up trouble, with ends that are clearly destabilizing, as the government has claimed.


Economist Luis Rosero considers that the government has approved projects of law counting on their parliamentary majority, but "without having a strategy of communication, analysis of the context, nor the tact to deal with sensitive issues, a situation the opposition took advantage of to provoke misleading information and confusion as to who would pay the aforementioned taxes" (1).


The right cleverly took advantage of the moment to create confusion, claiming that the laws of inheritance and capital gains would affect the family (a highly sensitive theme among Ecuadorians), those who "worked and sacrificed themselves" all their lives to leave “an inheritance” to their children, which, with these laws "will be confiscated by the ‘vulture State’".


In spite of the fact that the neoliberal project proposed by the right-wing has been questioned and defeated in elections in Ecuador and in Latin America, they retain the hegemony of conservative and egoistic ideas on society, according to Brazilian sociologist Emir Sader.  He adds that "the American way of life" has grown very deep roots at all levels of society, alongside egoism, consumerism, discrimination, racism and a lack of social solidarity" (2).


After a number of sympathizers of the Alianza País movement (in government) were physically and verbally attacked during the first days of the opposition marches, President Correa, in order to calm tensions, announced the temporary suspension of the legislative process of the aforementioned law bills, and he called for a national dialogue on issues of equity and justice and announced modifications of the proposed "inheritance law", such as not taxing inheritors of businesses that are already in operation.


Nothing has served to calm spirits, however, and the opposition of the right and the extreme left, of the big economic sectors and private media power groups, of certain professional associations and other groups that are discontent with governmental policy, have united under the slogan "Fuera, Correa! Fuera!” (Out with Correa! Out!)


A soft coup


Surely, at this point in the XXI century, there are no conditions for the classic coup through assassination of presidents or military intervention because the resulting regime would be immediately isolated. Nevertheless, today the tactics are those of the so-called "soft coups", or "mild coups" or "colour revolutions", ideas of the ideologist Gene Sharp of the Albert Einstein Institution, which have been taken up by Washington to destabilize governments not in tune with their interests.


During the last few weeks, the tactics and methods of the "mild coups" have been widely employed. Their objectives are to wear down the government, provoke chaos, ungovernability, to fish in troubled waters. Thus we have seen the employment of physical and verbal violence, including the burning of Alianza País banners, aggression with blunt instruments against followers of the government, calling them "sheep", “sandwichers", "longos" (Indians),and "vagrants".


To this are added the recourse to dramatic effects such as motorized caravans and attempts to surround the Palace of Government in Quito, the use of social networks to send hate messages and calls to harass public workers. In addition rumours have circulated about scarcity of goods in the supermarkets and "analysis" by supposed foreign experts who warn that the dollarization process is in danger(3).


Wallets first


Big businessmen and bankers, who have not done at all badly under the government of Rafael Correa, in office since 2007, have now proclaimed that they cannot dialogue until these projected laws are buried, laws that they have qualified as "confiscatory" and contrary to "the desire for progress".


In these eight years, businessmen have made large profits and continue to concentrate and monopolize certain branches of the economy. For example, in the five first months of this year, the banks made profits of $131,565,000, which represents an increase of 7.8% over the same months of 2014 ($122,009,000) (4). It is worth noting, however, that in contrast to past times, these and other economic groups are paying taxes, as registered by the Inland Revenue Service, that last year collected 13.6 billion dollars, three times more than in 2006.


High oil prices and the renegotiation of the foreign debt and petroleum contracts, as well as successful tax collection, have allowed the government of Rafael Correa to dispose of sufficient resources to develop a redistributive social model whose works are visible: roads, ports, airports, hydroelectric projects, recreational parks, modernization and improvement of public institutions and services, an increase in social investment in healthcare and education, scholarships for 10,000 students in foreign universities, reduction of poverty and extreme poverty, attention to migrants and the disabled, etc. The government has taken on planning as a central element of public policy and prioritizes social investment; however, at the moment growth is affected because of the fall in the price of petroleum and the overvaluation of the dollar, which has obliged the government to impose customs tariff safeguards to protect national production.


For and against


Social movements and organizations are divided with respect to the process and the Rafael Correa government and in recent weeks have taken part in marches both for and against.  In the opposition are the Frente Unitario de Trabajadores (FUT – United Workers’ Front) and the CONAIE (indigenous peoples’ confederation), sectors linked to the ex MPD (of Marxist-Leninist inspiration), among others.  Grouped together in the Coordinadora Unitaria de Trabajadores Campesinos, Indígenas y Organizaciones Populares, they call for a national strike with an extensive platform that includes the definitive archiving of the laws of inheritance and capital gains and of the proposed constitutional amendments that would allow for presidential reelection as well as that of other public servants.  They reject the Labour Justice Law, and what they call the criminalisation of social protest; and call for recuperating and strengthening the Bilingual Education program (for indigenous languages), etc. These organizations attempt to differentiate themselves from the right-wing, launching their own calls to mobilization; but they coincide in questioning what they call the authoritarianism of the regime, and in the cry of "fuera Correa!” although they have declared that they have no intention of provoking a coup d'état, but simply of calling for attention to their demands.


Among the organisations that support the project of the Revolución Ciudadana (Citizens’ Revolution) is the Central Unitaria de Trabajadores (CUT – workers’ union), Alianza Indígena (indigenous alliance), FENOCIN (member of the regional CLOC-Vía Campesina), organizations of the Montubios (a people of mixed descent from the coastal region), people of African descent, the disabled, etc., who have announced that they "will defend the political model of the Revolución Ciudadana in the face of the efforts of destabilization from the Ecuadorian right". From the political camp the Frente Unidos supports the process. This is made up of 16 organizations, plus local and most municipal governments.


The return of the past


Those driving the opposition marches are the dinosaurs of the economic and political right (supported by the large private media) who believe that now is the time to take over the power that over the last eight years has been in the hands of a head of State who is not “one of ours".


Some of the opposition marchers carry black flags which, according to them, symbolize "the death of democracy", but for other observers it is inevitable to associate them with the "black shirts" of the times of Mussolini in Italy, or with the symbols of the march of the "black crepe" headed by the late ex-president León Febres Cordero in support of banker Fernando Aspiazu, during the banking crisis of 1999-2000. Others carry Ecuadorian flags, and yet others, flags of Guayaquil, agitating an archaic regionalism that has not been uprooted by the elites of the country’s Main Port.


United through their hatred of Correa, it is the politicians of the right who are disputing the leadership of the marches with an eye on returning to power. What terrifies them is that Correa could be reelected in 2017, after approval of the constitutional amendments by the National Assembly that would permit the indefinite reelection of political officials.


On the one hand there is the mayor of Guayaquil, Jaime Nebot, who has established an alliance with the mayor of Quito, Mauricio Rodas, with the prefect of the Province of Azuay, Paúl Carrasco, who comes from social democracy but has united with the first two in the name of a so-called "unity in diversity". There is also banker Guillermo Lasso, who leads the movement Creando Opportunidades (CREO), and is practically the presidential candidate for this political group for the 2017 elections.


Nebot, who headed a massive mobilization in Guayaquil, was with the Partido Social Cristiano (PSC – Social Christian Party) and is now with the Madera de Guerrero movement. He was governor of the Province of Guayas during the Social Christian government of León Febres Cordero (1984-1988) in which violence, torture and the forced disappearance of persons was the order of the day. As an elected member from his province he promoted embarrassing incidents in the National Congress, in which he used unprintable language to refer to opposing members. After losing two presidential elections, he took refuge in Guayaquil, the most populous city of Ecuador, where he is mayor since the year 2000, and in which, as has been documented in the public media, "his" police regularly beat up on informal street vendors and young people who protest.


Nebot admitted to the CNN that he belongs to the two per cent of "wealthy" people who would be affected by the laws of inheritance and capital gains tax. Nebot has been involved in the real estate business for many years. The former Congress member Alfredo Vera, in an article published in the Telégrafo  (30/06/2015), points out that in the period 1984-1988, Nebot carried out "mismanagement to modify the route of the Perimeter Highway (in Guayaquil), built by the Government, to benefit through capital gains on great extensions of rural land, of his property and that of his associates, so as to convert them into urban areas, in order to boost their prices to unrealistic levels, in the zone called La Orquidea". President Rafael Correa, in his weekly report on Saturday March 27, called for the General Attorney, the National Assembly and the Comptroller to investigate Nebot and the banker Guillermo Lasso, in order to ascertain why some years ago they paid low amounts of income tax, and why these amounts have increased considerably in recent years.


Guillermo Lasso was the ex-super-Minister of the Economy for the Jamil Mahuad government (responsible for the banking crisis of 1999-2000) and former adviser to the government of Lucio Gutiérrez. His bulky bank accounts allow him to pay for expensive ads in private newspapers of broad circulation, calling for rallies invoking "the defence of the family".  In 2014 he made more than 15 million dollars and paid more than five million in income tax, an income equivalent to the wages of 28,920 workers (5). Lasso has proposed the overthrow of the redistributive model implemented by Rafael Correa and a return to the neoliberal model of the small State, guarantees for foreign investment and a return to privatisations. A member of CREO, the National Assembly member Andrés Páez, former leader of the now extinct party Izquierda Democrática (social-democrat) is in charge of launching the calls for the marches in Quito and must be astonished to see he now has hundreds following him.


CREO maintained conversations with a sector of the Pachakutik movement (which were rejected by CONAIE) which coincides with the fact that, in the latest opposition mobilizations, they have been seen participating together.


Another of those who joined the mobilisations is the Mayor of Quito, Mauricio Rodas, from the Suma movement, a former Social Christian youth leader (and therefore from the same political current as Jaime Nebot). Rodas defeated Augusto Barrera, of the Alianza País movement, in the last elections, offering to "reduce Municipal fines and tributes" and to establish a pluralist city in which one can "live better." After a year as Mayor of Quito, criticisms of his administration have multiplied, above all due to the paralysis of the project to build a metro system, which was begun under the previous administration. Also, the failure to carry out works of importance, the appropriation of works of the previous administration to present them as his own, his failure to explain his relationship with Mexican Ignacio Muñoz Orozco, presumed money-launderer for the Sinaloa cartel, the subsidies for private transport services that have received 22 million dollars in subsidies without improving service, etc. What has functioned in the Rodas administration is the plan of publicity in view of an eventual presidential campaign.(6)


The panorama for the next few weeks is complicated for Ecuador, since what is at issue is more than the destiny of a government. At issue is a democratic regime that has cost a lot to re-establish.



(Translated for ALAI by Jordan Bishop) 



(1) Marchas: ¿qué país queremos? (I), El Telégrafo 29-06-2015


(3) NdE: Since the 1999 bank crisis, Ecuador has adopted the US dollar as its national currency.


(5) In exact figures, Lasso earned $15,105,488.15 in 2014, and paid $5,270,536.85 in taxes.

(6) Expenses in institutional communication and publicity of the Quito Municipal government totaled $ 9,116,000 last year (excluding metropolitan companies), when the budget for those items was $3 million, according to the Municipal General Administration

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