Ecuador’s emergency

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The IMF (International Monetary Fund) approved its 14th agreement with Ecuador this March, imposing an austerity package in exchange for $4.2bn in funding over several years, with a further $6bn from other institutions. As part of this agreement, Ecuador’s president Lenín Moreno issued decree 883 on 2 October, deregulating fuel prices and provoking the biggest demonstrations in the country’s modern history. Next day, he declared a state of emergency, suspending some constitutional guarantees and authorising the armed forces to quell the protests. When this failed he imposed a curfew on the capital, Quito, on 12 October, on a scale unseen since the military dictatorship of the 1970s.


Under the state of emergency, Moreno moved the government to Guayaquil, a city controlled by his allies. In a statement broadcast on all television channels, he accused me of orchestrating the demonstrations in an attempt to oust him and, flanked by senior military figures, he appealed to the previous constitution, which designated the armed forces as guarantors of democracy. He seemed unaware of how politically precarious these images looked.


Less than a year ago, he had promised that he would never raise fuel prices because of the impact on the poorest. By October, his tone had changed: he told the protestors he would not back down, describing his decision as ‘brave’ and confirming he wanted to end subsidies, which he said ‘encouraged idleness’.


But the scale of the protests forced him to negotiate with the Confederation of Indigenous Nationalities of Ecuador (CONAIE), which had led the demonstrations, and to repeal decree 883 on 13 October. According to official figures, eight people are dead, and 1,340 have been injured and almost 1,200 detained during these events.


To justify the IMF agreement, the government had claimed Ecuador was in crisis, especially because of the debt it had allegedly inherited. But this claim was based on manipulated figures: Moreno said that the public debt was $60bn when he took office, though official figures from the finance ministry put the cumulative public debt at $43.542bn in June 2017, 41.7% of GDP. The external debt was just $28.55bn, 21.4% of GDP, despite record public investment of $100bn between 2007 and May 2017.


Major shocks to the country


In 2016 the economy had contracted by 1.2% because of a fall in oil prices, a much stronger dollar, international judgments against the state which resulted in sanctions costing over 1% of GDP, and a devastating earthquake with an economic cost of almost $3bn. Despite these major shocks, the economy began to recover in the fourth quarter of 2016; in 2017 it grew by 2.4% and in 2018 by 1.4%.


The Moreno government often mentions the budget deficit that it claims to have inherited. The budget deficit, having reached 5.34% and 5.39% of GDP in 2016 and 2017 (mainly as a result of reduced oil revenue), was back at 2.4% in 2018, less than the limit the Maastricht treaty imposes on EU countries.


So if there was no debt crisis and no growing budget deficit, what crisis was Moreno talking about? The situation is more the result of the current economic mismanagement of the country than any poisoned legacy. On coming to power, Moreno reduced or eliminated customs tariffs on 372 categories of product, depriving Ecuador of an estimated $400m of revenue, and increasing the total cost of non-essential imports by around $800m. The government cut off domestic sources of revenue from the Ecuadorean Institute of Social Security (IESS) and the central bank, state bodies that now send their surpluses and their reserves abroad.


Ecuador has long suffered from instability. From 1996 to 2006, no government completed its mandate, and solutions to crises came from outside the institutional framework. So as a democratic response to permanent political tensions, articles 130 and 148 of the 2008 constitution allow the national assembly or the president to call an election in the event of a ‘severe political crisis or internal unrest’. Between 2007 and 2017, I was elected three times and the chronic instability eased: our project, the Citizens’ Revolution, brought us success each time, including when Moreno ran for the presidency on a campaign promise of continuing our project.


‘Stay in your mountains’


But once in power, Moreno changed his direction, aligning himself with neoliberal orthodoxy and opting to defend the interests of Ecuador’s rich and powerful. He began persecuting his former comrades, using all possible means including the judiciary, and weakened national institutions. In less than two years he has had three vice-presidents.


Ecuadoreans waited patiently for him to keep his promise of a better-run country. But with poor economic and social results, a lack of state infrastructure projects and many corruption scandals, some involving the presidency, his popularity plummeted. Decree 833 inflamed long-smouldering grievances. Private bus drivers went on strike, then the indigenous base rose up, soon followed by a large part of the population.


The elites quickly tried to discredit the demonstrations. The mayor of Guayaquil, Cynthia Viteri, closed the bridge to her city to protect it from alleged looting by the indigenous people’s march; her predecessor, Jaime Nebot, revealed his racism when he told them to ‘stay in their mountains’. The government and its allies in the privately owned media tried to misrepresent the demonstrations as a coup. They alleged that Venezuela’s president Nicolás Maduro and I had paid agents to infiltrate the protests and provoke violence. In an attempt to substantiate these allegations, the police arrested 17 Venezuelans, who turned out to be Uber drivers rather than agents provocateurs.


But the official rhetoric persisted: it was said that my supporters and I were provoking trouble to hinder the authorities’ attempts to tackle corruption, and that Ecuador was suffering as a result. Moreno claimed that ‘there is not the slightest doubt that that madman is directing all this from Venezuela because he knows very well that the judiciary has him in its sights.’ The privately owned press defended the government despite its unprecedented repression, and angry protesters eventually ejected that press’s journalists from their marches; unfortunately, some were physically assaulted. The rare independent media outlets that spoke out, such as Pichincha Universal, were closed down.


While the demonstrations continued, the national assembly president and Moreno ally César Litardo prevented parliament from sitting. Yet the severity of events justified it being in permanent session to take measures that could have averted the use of violence, including the dismissal of the interior and defence ministers, who bear direct responsibility for the repression. Defence minister Oswaldo Jarrín was even allowed to boast that ‘criminal or terrorist acts will be put down by force ... No one should forget that the armed forces can claim concrete experience of war.’


Out with the IMF!


Out of options, the government accepted the mediation efforts of the UN’s representatives in Quito and the Ecuadorean Bishops’ Conference; it would speak to only one group, CONAIE, whose leaders have supported it since Moreno came to power. Until the demonstrations began, CONAIE’s former president Humberto Cholango ran the national water authority; the indigenous Pachakutik Plurinational Unity Movement was part of the governing coalition, and Moreno had appointed many indigenous leaders to important jobs.


But CONAIE members outflanked their leaders, so the government organised a dialogue with its allies (with no indication that it would succeed) in an attempt to defuse the street protests. It only conceded the repeal of decree 833, although demonstrators were also demanding the departure of the IMF and Moreno.


The attempt to neutralise the indigenous movement coincided with a further wave of repression of supporters of our political movement. On 14 October police searched the homes of Paola Pabón, prefect of Pichincha Province, and Virgilio Hernández, executive secretary of the Citizens’ Revolution Movement (named after the process begun in 2007), and five others including the former president of the national assembly, Gabriela Rivadeniera, who sought protection in the Mexican embassy. Pabón is now in prison, as are Yofre Poma, an MP from Sucumbíos Province, and Alexandra Arce, the former mayor of Durán.


Our movement alone has demanded the implementation of articles 130 and 148 of the constitution as a peaceful, democratic and constitutional response to the crisis; for that we have been called putschists. Unprecedentedly, the IMF has declared its support for the repeal of the fuel price rise, a clear indication that it would rather back the Moreno government than the agreement the IMF signed with it. The IMF’s priority is keeping Moreno in power, at any price, because since May 2017 Ecuador has become the US’s regional bridgehead, and the US is not willing to lose its new ally. Moreno’s regime has recently allied itself with the Lima Group in support of an attempt to oust President Nicolás Maduro of Venezuela. It has delivered Julian Assange to the British police, left the Union of South American Nations (Unasur), authorised a new military base in the Galápagos, betrayed the Citizens’ Revolution Movement and persecuted its activists. The economic, social and political situation is deteriorating and the government no longer has legitimacy. Ecuador is adrift.



- Rafael Correa is an economist and was president of Ecuador from 2007 to 2017. Translated by George Miller.


Copyright ©2019 Le Monde diplomatique — used by permission of Agence Global.
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