by Kevin Zeese and Margaret Flowers
Part 2 - Ecuador in Rebellion Against IMF and the US Puppet Moreno
On October 4, Moreno proclaimed the end of a 40-year policy of fuel and petrol subsidies, which had traditionally benefited his country’s working-class population. He also announced a 20 percent decrease in the salary of public employees and initiated plans to privatize pensions. He removed workplace and job security safeguards. Decree 883, known as ‘The Package’, was a series of neoliberal policies demanded by the IMF in return for a $4.2 billion dollar loan. It was preceded by policies for the wealthy including reducing their taxes.
The IMF loan was part of Moreno serving as a puppet and bowing to multiple US demands. Ecuador promised to settle a long dispute with Chevron whose oil drilling and pipelines have polluted the country. Tens of billions of dollars in restitution from Chevron are at stake but Moreno said he is willing to give them up. In fact, the IMF loan is strange in that it was dependent on Ecuador paying external debt obligations, i.e. it was not new funds for Ecuador but new debt to subsidize paying back Wall Street.
In making the announcement, Moreno called the people “Zánganos,” or Drone Bees leading to the uprising of the Drone Bees. The mass protests were called by the Popular Front, a group of unions, and the Unified Workers Federation of Indigenous Nationalities of Ecuador (CONAIE). Students and social movements joined protests throughout the nation in Loja, Guayaquil, Cuenca, Ambato, and Riobamba, among other cites as well as Quito, the capital. Moreno claimed without any evidence that the uprising was financed by Venezuelan President Nicolas Maduro and Correa.
Protests in Ecuador were relentless with no end in sight. They grew when 20,000 indigenous people marched into Quito. Police responded with violence, tear gas, and mass arrests. An October 4 video circulated on social media showed nonviolent protesters killed in the street by the police as well as other police violence. On October 5, Moreno declared a 60-day state of Emergency. Sometimes police had to retreat in the face of mass protests. On October 7, Moreno fled the capital to hide in the Navy base 260 miles away in the conservative stronghold of Guayaquil.
Protests in Ecuador were relentless with no end in sight. They grew when 20,000 indigenous people marched into Quito. Police responded with violence, tear gas, and mass arrests. An October 4 video circulated on social media showed nonviolent protesters killed in the street by the police as well as other police violence. On October 5, Moreno declared a 60-day state of Emergency. Sometimes police had to retreat in the face of mass protests. On October 7, Moreno fled the capital to hide in the Navy base 260 miles away in the conservative stronghold of Guayaquil.
As we wrote this newsletter, unrest in Ecuador was escalating. On Saturday, the nation was put on military lockdown. Law enforcement attacked protesters with pellets and tear gas in the immediate vicinity of the National Assembly. By Sunday, Moreno decreed a 3:00 pm curfew, which people defied. Then, facing an emergency session in the National Assembly, Moreno backed down. Protesters celebrated when Moreno’s government announced that Decree 883 had been repealed after eleven days of popular mobilizations.
Peter Koenig describes a root cause of the problems: “Since January 2000, Ecuador’s economy is 100% dollarized, compliments of the IMF (entirely controlled by the US Treasury, by force of an absolute veto). The other two fully dollarized Latin American countries are El Salvador and Panama.” The US and IMF used the economic crises of the 1990s to dollarize Ecuador’s economy and gain full control over the nation’s riches as Ecuador is the second-largest oil economy in South America. This led to unaffordable goods for Ecuadorians, social unrest and a series of unstable governments until President Correa, who served from 2007 to 17, was elected.
Peter Koenig describes a root cause of the problems: “Since January 2000, Ecuador’s economy is 100% dollarized, compliments of the IMF (entirely controlled by the US Treasury, by force of an absolute veto). The other two fully dollarized Latin American countries are El Salvador and Panama.” The US and IMF used the economic crises of the 1990s to dollarize Ecuador’s economy and gain full control over the nation’s riches as Ecuador is the second-largest oil economy in South America. This led to unaffordable goods for Ecuadorians, social unrest and a series of unstable governments until President Correa, who served from 2007 to 17, was elected.
A Center for Economic and Policy Research 2017 report found under Correa Ecuador did well with an average annual GDP growth of 1.5% compared to 0.6% average for the previous 26 years; a decline of 38% in poverty with extreme poverty reduced by 47%; and a decline in inequality with the Gini coefficient falling substantially. Correa doubled social spending from 4.3% in 2006 to 8.6% in 2016; tripling education spending from 0.7% to 2.1%; and, increasing public investments from 4% of GDP in 2006 to 10% in 2016.
Correa served threeo terms. A fourth term would have required a constitutional amendment. Rather than running, Correa endorsed Lenin Moreno who had served as his vice president from 2007-13. He was expected to continue Correa’s policies but instead reversed them.
Correa served threeo terms. A fourth term would have required a constitutional amendment. Rather than running, Correa endorsed Lenin Moreno who had served as his vice president from 2007-13. He was expected to continue Correa’s policies but instead reversed them.
Moreno was unpopular before announcing ‘The Package’ due to structural poverty increasing from 23.1 percent in June 2017 to 25.5 percent in June 2019 with projections of 30 percent by the end of the year. Injustices like the imprisonment of the popular former Vice President Jorge Glas on dubious charges and his continuous political witch hunt against Rafael Correa and other leaders of the Citizens’ Revolution Party added to his unpopularity. In addition, he has been engulfed in a personal corruption crisis involving an offshore Shell corporation INA, which cast Moreno’s presidency in doubt.
Moreno’s forcible and illegal ejection of Julian Assange from the London embassy in return for payoffs from the US and UK resulted in a national strike in Ecuador in July. This, along with the arrest of Ola Bini, who is being prosecuted falsely as a conspirator with Wikileaks, was unpopular with Ecuadorians.
Will repeal of ‘The Package’ end the protests and the threat to Moreno’s presidency? As we write, the answer to these questions are unclear. The people won a major victory, but the Moreno/IMF infection remains.
Will repeal of ‘The Package’ end the protests and the threat to Moreno’s presidency? As we write, the answer to these questions are unclear. The people won a major victory, but the Moreno/IMF infection remains.
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