Ecuadors' Debt

[bemildred]

George Bush has someone new to hate. Only twenty-four hours after Ecuador's new president took his oath of office, he was hit by a diplomatic cruise missile fired all the way from Lithuania by Condoleezza Rice, then wandering about Eastern Europe spreading "democracy." Condi called for "a constitutional process to get to elections," which came as a bit of a shock to the man who'd already been constitutionally elected, Alfredo Palacio.

What had Palacio done to get our Secretary of State's political knickers in a twist? It's the oil--and the bonds. This nation of only 13 million souls at the world's belly button is rich, sitting on 4.4 billion barrels of known oil reserves, and probably much more. Yet 60 percent of its citizens live in brutal poverty; a lucky minority earn the "minimum" wage of $153 a month.

The obvious solution--give the oil money to the Ecuadoreans without money--runs smack up against paragraph III-1 of the World Bank's 2003 Structural Adjustment Program Loan. The diktat is marked "FOR OFFICIAL USE ONLY," which "may not be disclosed" without World Bank authorization. TheNation.com has obtained a copy.

The secret loan terms require Ecuador to pay bondholders 70 percent of the revenue received from any spike in the price of oil. The result: Ecuador must give up the big bucks from the Iraq War oil price surge. Another 20 percent of the oil windfall is set aside for "contingencies" (i.e., later payments to bondholders). The document specifies that Ecuador may keep only 10 percent of new oil revenue for expenditures on social services.

ZMAG

[Robbien]

1. Those oil contracts are just plain evil, but it appears Palacio has

his own ideas on whether they should be honored

http://www.kentucky.com/mld/kentucky/news/special_packages/iraq/11662473.htm

QUITO, Ecuador - Ecuador will review all of its current oil contracts with foreign companies, the country's self-described "nationalist" energy minister said in an interview published Monday.

In an interview with the daily Expreso, Energy Minister Fausto Cordovez said if the contracts "are well formulated and within legal and ethical norms ... they will be respected."

He added that he was not trying to cause panic, but that "if the multinationals believe that a nationalist minister is going to do them harm, they will have to make a decision. I'm not going to be frightened by the threat of someone leaving."

Ecuador's government has sounded a more populist tone since Congress ousted ex-President Lucio Gutierrez, a fiscal conservative, and replaced him last month with his elected vice president, Alfredo Palacio, who advocates greater spending on social programs.

Oil exports, which account for 43 percent of Ecuador's national revenue, brought in $2.13 billion in 2004.

[bemildred]

2. He sounds pleasingly sensible to me.

I expect that the recent events in Venezuela, Argentina, etc. and
the demise of his predecessor have helped stiffen his spine.
And he is not a politician by trade. Let us wish him the best.
I expect that obstacles will be thrown in his way.

[bemildred]

3. Bolivia Erupts

At around 8:00 am on Monday morning, massive crowds of mostly poor indigenous Bolivians gathered on the cusp of a mountainside that descends into the capital city of La Paz. They are residents of the massive shantytown of El Alto, located on the high plateau (the altiplano) that overlooks the valley which encompasses La Paz.

Workers in the massive informal sector, ex-miners "relocated" to the shantytown after privatization of the mines in 1985, the unemployed, recent migrants from the countryside pushed from their former livelihoods through the devastation of the agricultural economy in the high plateau, women in traditional indigenous dress with their unique bowler hats, shoe-shine boys, Trotskyist teachers, communists, socialists, indigenists, neighbourhood activists, populists, and others milling around in a jovial mood eating breakfast on the street, provided by women venders who have erected their food-stands along the opening path of the planned march for the nationalization of the country’s natural gas. Organizations participating in the day’s actions include the Federation of United Neighbours of El Alto (FEJUVE-El Alto), the Regional Workers Central of El Alto (COR-El Alto), the Public University of El Alto, the Departmental Workers Central, the Confederation of Original Peoples, the Federation of Peasants of La Paz "Tupaj Katari," the Bolivian Workers Central (COB), the teachers unions of El Alto and La Paz, among many, many others.

The theme is the nationalization of gas, but it doesn't stop there. They want to close the Parliament and kick out the president. Frustration is running high in El Alto and throughout popular sectors in the country. The nationalization of gas was the historic demand of the October rebellion of 2003 that left many dead and ousted the hated president Gonzalo ("Goni") Sánchez de Lozada. Vice president at the time, Carlos Mesa Gisbert, who had distanced himself from the state violence perpetrated by Goni, assumed the presidency through constitutional mechanisms, with the support of many of the protesters who believed Mesa would carry through the "October Agenda," as he promised. Nineteen months later and Mesa remains in the hands of the transnationals, the American empire, European imperialists, the IMF, the World Bank, and the internationalized sections of the local bourgeoisie.

It took three hours to march the roughly 7 miles from the edge of El Alto to downtown La Paz. When we were close to the edge of downtown, we could look up the mountainside to the start of El Alto, and a steady and thick stream of protesters was still visibly just beginning their participation in the march. This seriously calls into question the low-ball figures of twenty to twenty-five thousands protesters provided by the mainstream daily La Razon. Other dailies failed to provide figures, simply assuring the readers that the protests were "massive."

http://www.zmag.org/content/showarticle.cfm?SectionID=52&ItemID=7886