By Leon Kaye. Triple Pundit
Editor's Note: This brilliant move by Ecuadorian President Rafael Correa reflects his education, humanistic philosophy and his view that nature is sacred. He speaks 4 languages, Spanish, French, Quechua, and English. He holds degrees in Economics from universities in Ecuador, Belgium and a PhD from the University of Illinois in the US. He stood up against Exxon over their pollution of the Ecuadoran Amazon and has frustrated Washington and the big transnationals since he was chosen by the people to serve as their president by an overwhelming majority in 2006. He declared Ecuador's national debt illegitimate because it was contracted by former, corrupt regimes in lock-step with the U.S. He brought the Ecuador into the Bolivarian Alliance for the Americas in 2009 and he is the current President pro tempore of the Union of South American Nations. His mandate and future in Ecuador?
"His first mandate was due to end on January 15, 2011, but the new approved constitution written by the new National Assembly mandated general elections for April 26, 2009. In these election Rafael Correa won in the first round with 51.9% of votes accounting, achieved for the first time since 1979, a representative be elected without having to face the second round. Therefore, his first mandate will end 2013."
The following article concludes with 3 questions. With them, Axis of Logic provides our answers:
- Is this a small country standing up to years of pollution by foreign firms? Answer: Yes.
- Or is Ecuador blackmailing wealthy countries to compensate for years of what some say is mismanagement? Answer: We hope so!
- Will Yasuni become a model for other countries who feel pressured to exploit their resources? Answer: Definitely!
More on President Correa's biography, policies and achievements is provided below this article from Triple Pundit.
- Les Blough, Editor
Ecuador to World: Pay Us $3.5 Billion to Not Drill Oil
Two years ago, we were given a lesson on how the price of oil correlates with risk. The cost of a barrel of oil also depends on demand, the quality of crude, and the temperament of the market. Whatever your take is on fossil fuels, the vagaries that affect the giant yo-yo of oil prices is fascinating. One country, however, is turning the assumptions over the price of oil on its head.
Ecuador has told the world to put a price on oil that will never hit the market. Yesterday the small South American nation signed a deal with the United Nations Development Program that leaves a huge amount of oil reserves untouched in exchange for the approximate sum of US$3.5 billion.
Under Yasuni National Park lies about 850 billion barrels of crude oil. Smack in the middle of the Ecuadorian Amazon, the park ranks among the most bio-diverse regions on the planet. Among the countless species of plants, animals, birds, and insects are two tribes who are among the few peoples still not in contact with the modern world. What does Ecuador receive in return? A windfall from wealthy countries, led by Germany and Spain, that will go towards renewable energy programs, environmental and social development projects, and eco-tourism.
The deal is a notable victory for Ecuador, which has tangled with Chevron for years over the company’s operations in the Amazon, and has moved toward eliminating fossil fuels in the Galapagos Islands by 2015. The fact that Ecuador could even get this agreement inked is also impressive because its populist president, Rafael Correa, has threatened to nationalize the oil industry. His administration insists that oil agreements switch from production-sharing deals, which North American and European energy companies prefer, to less lucrative service contracts that only give companies a flat fee for a company’s operations.
Correa is following the path of Venezuela’s Hugo Chavez, who ripped up oil production contracts, giving his government a greater share of oil production profits. Venezuela, however, benefits from huge reserves and can use them as leverage when negotiating with companies that need the fuel for its energy-thirsty customers. Ecuador’s production, in contrast, is miniscule: its daily production is only 1%, but those revenues are desperately needed: one of the country’s largest sources of revenue is the estimated US$1.7 billion in remittances sent from its people who live abroad.
This is not yet a done deal. Ecuador’s government has stated that if US$100 million of the promised amount does not arrive by December 2011, the agreement could be nixed, the contributions, returned, and then the country can decide what to do with Yasuni.
Is this a small country standing up to years of pollution by foreign firms? Or is Ecuador blackmailing wealthy countries to compensate for years of what some say is mismanagement? Will Yasuni become a model for other countries who feel pressured to exploit their resources? Perhaps the argument for “post-oil” economies just got a boost. Other countries balancing oil reserves and pristine swaths of land are watching.
Source: Triple Pundit
President Rafael Correa's biography, policies and achievements
Rafael Correa was born in Guayaquil and earned an Economics degree at the Universidad Catolica de Guayaquil in 1987. Following his degree, he worked for one year in a mission at a kindergarten and run by the Salesian order in Cotopaxi Province, where he acquired some knowledge of Kichwa, the language of the majority of the native pre-Columbian population concentrated in the Andes region. In addition to Spanish, he speaks French, Quechua, and English.
In June 1991, he received a Master of Arts in Economics from the Université Catholique de Louvain in Belgium. He later studied at the University of Illinois at Urbana-Champaign, where he earned a Master of Science in Economics in May 1999, and later a PhD in Economics in October 2001. According to The Washington Post, Correa's adviser at the University of Illinois, Werner Baer, supports his former student. "He appreciates the market to a certain point, but he knows that the market left alone concentrates wealth", he said. "He is not going to do anything foolish... because he is a fairly open-minded person."
In 2005, Correa served as economy and finance minister under President Alfredo Palacio. During his four months in office, he advocated poverty reduction and economic sovereignty. Correa was skeptical of a free-trade deal with the United States, did not take the advice of the International Monetary Fund, and worked to increase Ecuador's cooperation with other Latin American countries. After the World Bank withheld a loan (citing the changes to the oil income stabilization fund), Correa resigned from Palacio's government. Correa had also proposed the issue of government bonds at a lower interest rate than the contemporary one (8.5%); Venezuela was to purchase half of the new bond issue. Correa claimed in his resignation letter that the sale was done with full presidential authorization, but cited lack of support from the president as a factor in his decision to resign.
When Correa resigned, polls showed he had the highest credibility of any official in the administration at the time, with 57% of Ecuadorians saying that they trusted him.
At the start of 2006 presidential campaign, Rafael Correa founded the Alianza PAIS—Patria Altiva y Soberana ("Proud and Sovereign Fatherland Alliance"). The movement espouses political sovereignty, regional integration, and economic relief for Ecuador's poor. Correa, an observant Roman Catholic, describes himself as a humanist, a Christian of the left, and a proponent of socialism of the 21st century.
During the campaign, Correa proposed a constituent assembly to rewrite Ecuador's constitution. Alianza PAIS did not run any congressional candidates, as Correa had stated that he would call for a referendum to begin drafting a new constitution. However, the Alianza PAIS movement signed a political alliance with the Ecuadorian Socialist Party, which did present candidates for Congress.
On economic policy, Correa called for reform of the petroleum industry, including an increase in the percentage of petroleum revenues spent on social programs for the Ecuadorian poor, following the reforms of the Hydrocarbons Law promoted by former Economy and Finance Minister Diego Borja. He accused foreign petroleum companies operating in Ecuador of failing to meet existing environmental and investment regulations. In an interview, Correa stated:
Many of the oil contracts are a true entrapment for the country. Of every five barrels of oil that the multinationals produce, they leave only one for the state and take four... That is absolutely unacceptable. We're going to revise and renegotiate the contracts."
Finances and debts
He advocated reform of the financial sector, including limiting offshore deposits by local banks to no more than 10% of their holdings.
Correa also proposed strategies for reducing the burden of Ecuador's foreign debt service through compulsory debt restructuring. He indicated that his top priority would be spending on social programs rather than servicing Ecuador's debt.
Correa criticized the neoliberal policies of recent Ecuadorian presidents, especially Jamil Mahuad. He criticized the decision by President Mahuad in 2000 to adopt the US dollar as the country's official currency while later acknowledging that it would not now be feasible to abandon that policy.
Commerce and foreign policies
Correa also criticized Ecuador's draft free trade agreement as currently negotiated with the US, although he does advocate expanding trade and opening markets with other countries, urging in particular the integration of South American economies.
On foreign policy, Correa commented on Ecuador's relations with its neighbor Colombia. Correa stressed Ecuador's interest in staying uninvolved in internal conflict in Colombia. In October 2006, Correa added that he would "pursue and capture" FARC members if they enter Ecuador. He also declared that he condemns their kidnappings, violations of human rights and bombings. Later, during his presidency Colombian police accused Correa of having ties to the FARC. Correa denied the accusations. See section Presidency.
In August 2006, Correa told the Ecuadorian press that he is not part of the Venezuelan Bolivarian movement, although he considers Hugo Chávez a personal friend. In June 2009, nonetheless, Correa joined the Chavez-backed Bolivarian Alternative for the Americas (ALBA), together with Cuba, Nicaragua, Bolivia and other countries.
In response to Chávez's comparison of US President George W. Bush with Satan, Correa said it was unfair to the devil.
In addition to his platform on economic and social policy, Correa's ability to communicate with Ecuador's indigenous population in their own language also differentiated him from the other presidential candidates. He learned Quichua in his youth during a year he spent volunteering in a remote highland town. However, in the 15 October election, a large percentage of the votes in areas with high concentration of indigenous people went to candidate Gilmar Gutiérrez, brother of former president Lucio Gutiérrez, although Correa generally ran second in these areas.
In the 15 October 2006 general election Correa obtained second place (22.84%) behind banana tycoon Álvaro Noboa (26.83%). Correa won the subsequent 26 November 2006 runoff election with 56.67% of the vote. He took office on 15 January 2007.
First Presidency 2007-08
Rafael Correa was officially declared president of Ecuador on 4 December 2006 by the country's electoral court. He was sworn in on 15 January 2007 as the 56th president of Ecuador, the seventh to occupy the post since the legislature removed President Abdalá Bucaram 10 years earlier in the midst of a debt crisis that devastated the country. His inauguration was attended by most regional leaders, as well as the Iranian President and Spanish Crown Prince.
Correa promised to get rid of the traditionally corrupted political class.
"Socialism will continue. The Ecuadorian people voted for that. We are going to emphasize this fight for social justice, for regional justice. We are going to continue the fight to eliminate all forms of workplace exploitation within our socialist conviction: the supremacy of human work over capital. Nobody is in any doubt that our preferential option is for the poorest people, we are here because of them. Hasta la victoria siempre!"
— Rafael Correa, April 30, 2009
Correa's administration has suggested that the new government will not sign an agreement allowing the International Monetary Fund to monitor its economic plan. In February 2007, Correa's economy minister Ricardo Patiño stated: "I have no intention ... of accepting what some governments in the past have accepted: that (the IMF) tell us what to do on economic policy." "That seems unacceptable to us," Patiño added. However, as a member of the IMF, the annual report known as the "Article IV" report will be undertaken.
Repudiation of Ecuador's foreign debt
In early 2007, Correa has called for a renegotiation of Ecuador's $10.2 billion external debt, at 25% of GDP, following the example of Argentine President Néstor Kirchner. In his inaugural address on 15 January, Correa stated his belief that part of Ecuador's external debt is illegitimate, because it was contracted by military regimes. He also denounced the "so-called Washington Consensus." Correa threatened to default on Ecuador's foreign debt, and to suspend review of the country's economy by the World Bank and the International Monetary Fund; indeed, on April 26, 2007, he ordered the expulsion from Ecuador of the World Bank's country manager.
On 12 December 2008, Correa said that an interest payment due on Ecuador's national debt would not be made. He declared the country in default: "We are ready to accept the consequences". He described the debt as "immoral", saying the government would take its findings that past debt sales were tainted by graft and bribes to international courts.
In a radio address on December 13, Correa said that he wants to force a “big discount” on creditors, whom a day earlier he called “true monsters who won’t hesitate to crush the country”.
"I have lost sleep over this ... this will cost us tears and sweat but I think we are doing the right thing." Correa, who endorses anti-debt NGO Jubilee 2000's slogan "life before debt", is popular among Ecuadorians for his stance against foreign investors.
On April 16, 2009, Finance Minister Maria Elsa Viteri embarked on a trip to Europe in a mission to present Ecuador's offer to buy back global bonds 2012 and 2030 at 30% of their current value. In May 2009, Ecuador announced that it had successfully bought 91% of the bonds at a cost of 35 cents to the dollar.
Hydrocarbon production reforms
Correa announced that on Monday 26 July, 2010 Ecuador will enact reforms to a hydrocarbons law that aims to expropriate foreign company operations unless they sign service contracts increasing state control of the industry. Correa reminded oil companies that if they don't abide by the state's policies, they will have their fields nationalized and will be forced from the country.
During Rafael Correa's tenure as presidency he took some radical alternative steps to change the course of Ecuador's relations with the rest of the world. Amongst these were economic moves to correct Ecuador's debt imbalance, a distancing from the United States, a rift with its northern neighbour Colombia, and a strengthening of ties with ALBA (including Venezuela and Bolivia), as well as Iran.
In February 2007, Correa's plan to have a referendum on the convening of a constituent assembly was approved by Congress. The referendum took place on 15 April 2007. However, after this date was set, the "statutes" for the referendum were modified by Correa to allow more powers to the constituent assembly. One of these powers was the ability to dismiss Congress, a power which Congress never approved. The newer version of the referendum was approved by the majority of the seven-seat Electoral Tribunal. In early March, Congress, which was controlled by Correa's opposition, reacted by trying to impeach the President of the electoral tribunal. The electoral tribunal then removed from office the 57 members of Congress who tried to impeach the President of the Electoral Tribunal, on the grounds of attempting to intervene an electoral process. Correa backed the electoral tribunal (which approved his version of the referendum) while stating that the removal of the 57 congressmen was constitutional. The situation escalated to a feud between the opposition in Congress and the Executive and marches in the street against Congress and police intervention to prevent the Congressmen from entering the legislative building.
On 22 March, 21 alternate deputies were sworn in, allowing the Congress to regain quorum, and on 23 March and 24 March a further 20 deputies were sworn in. The new majority (formed by 28 alternate deputies and 31 deputies from parties that support the referendum and Assembly) pledged to support the referendum on the Constitutional Assembly. On 15 April, Ecuadoreans voted overwhelmingly (81.72% in favor) to support the election of a constituent assembly.
On 23 April, the Constitutional Tribunal decided to try to reinstate 51 of the 57 Congressmen who had been fired by the Electoral Tribunal. The Constitutional Tribunal claimed that it was illegal to remove them in the first place, and approved a petition by the 51 requesting their reinstatement. But before the congressmen had the chance to reenter Congress, Congress voted to fire all nine judges of the Constitutional Tribunal for their "unconstitutional actions".
On 30 September, as a result of a national election, President Correa won backing for his plans to rewrite Ecuador's constitution and expand state control of the nation's economy. Correa's faction won approximately 61% of the seats in the National Assembly (80 of 130 Assembly Members).
Ecuador's democracy opposed media
Correa, paraphrasing Tony Blair, stated that the Ecuadorian press acted as "a group of wild beasts". He has also regularly criticized it as
"...mediocre, incompetent, inaccurate, lying and is a part of the structure of corruption and accomplice of the national disaster."
On May 19, during a press conference called by Correa to talk about freedom of speech, he ordered that security eject the opinion editor of the Guayaquil-based El Universo newspaper, whom he had invited to the event. Correa ordered him to be ejected because the editor began talking about Correa's personal life.
Repeatedly during the Government of Rafael Correa, many news entities in Ecuador (and abroad) have in plain view expressed their opposition and despise of the person Rafael Correa. Many of them following their own economic interests hide or distort the news stories. As an answer to the destabilizing power of certain media companies, Correa declared that he would not hesitate to revoke the license of "coup instigating" media stations.
Lawsuit against the La Hora newspaper
On 10 May 2007, Correa filed a lawsuit against Francisco Vivanco Riofrío, president of the board of directors of the Quito-based La Hora newspaper, over an editorial published in the paper on March 9. The editorial, titled “Official Vandalism,” said that Correa intended to rule Ecuador “with turmoil, rocks and sticks”. It described the president’s behavior as “shameful.”
Correa's suit is based on Article 230 of the country’s penal code that sets prison penalties of up to two years for contempt, expressed in “threats or libel that would offend the president.”
Francisco Vivanco Riofrío has declared that he will not apologize for the editorial and that he is prepared to face the lawsuit. He has also declared that "that editorial reflects our thoughts and we will defend not only our right to manifest our opinions but also the opinions of all citizens, as we have done during the 25 years of our newspaper existence.”
Reactions to the lawsuit
In connection with Correa's complaint against La Hora, the Ecuadorian Association of Newspaper Publishers (AEDEP), has shown its support for that newspaper and declared that "no contemporary Ecuadorian politician has employed such legal figure (contempt) as an instrument to frighten the press."
The Inter American Press Association (IAPA) has declared that it is "a clumsy step on the part of the Ecuadorean president to file a criminal charge against a news outlet, accusing it of contempt, an archaic concept in a modern democracy and outmoded in Latin America and which should be eliminated from penal codes, as the IAPA has been insisting." The Committee to Protect Journalists has also protested against the lawsuit: “Fear of criminal penalties will inhibit the Ecuadoran press in reporting and commenting on issues of public interest. We call on President Correa to drop the libel suit against Vivanco and repeal defamation laws that contradict international standards on freedom of expression.” The World Press Freedom Committee has declared that "it is clear that this attempt to silence the Ecuadorian press goes against very basic freedom of the press tenets, as consecrated in at least two of the most important international human right charts."
Expropriation of Gamavision and TC television channels
Correa has constantly denounced what he views as the political activism of the major Ecuadorian television channels. He has also denounced the fact that they are owned by business groups who own banks related to the financial crisis of 1999, where millions of state dollars were given to rescue them while these left thousands of people without their life savings. In mid 2008, the Correa government expropriated Gamavision and TC television channels because these were property of the Isaias group. This group owned Filanbanco, a bank involved in the crisis of 1999. Correa did this to give back the savings to those affected by it. Currently these channels are owned by the state and have been defined as assets before calling an auction to sell them. Correa hopes that the stations' own workers gather together to buy each channel.
Correa decided to create Ecuador TV, the first state-owned channel in the country in order to produce television with better quality standards than the private channels. Also newspaper El Telegrafo became state owned.
In June 2009, CONARTEL (a radio and television regulating body) imposed fines on a remaining independent television station, Teleamazonas, for transmitting bull-fights and "The Simpsons" during prime time. A third fine could lead to a temporary or permanent ban on this private television channel.
Yasuní - ITT Project. The aim of the proposal is to provide a creative solution for the threat posed by the extraction of crude oil in the Ishpingo-Tiputini-Tambococha (ITT) oil fields, which are located in the highly vulnerable area of Yasuní National Park. The proposal would contribute to preserving biodiversity, reducing carbon dioxide emissions, and respecting the rights of indigenous peoples and their way of life.
President Correa has stated that Ecuador’s first option is to maintain the crude oil in the subsoil. The national and international communities would be called on to help the government implement this costly decision for the country. The government hopes to recover 50% of the revenues it would obtain by extracting the oil. The procedure involves the issuing of government bonds for the crude oil that will remain “in situ,” with the double commitment of never extracting this oil and of protecting Yasuní National Park. If Ecuador succeeds in receiving the hoped for-amount – estimated at 350 million dollars annually – it would only be for a period of ten years beginning after the sixth year, since production, and thus potential revenues, would progressively decline after those ten years.
A more promising alternative would be a strategy to provide the government with the 50% of resources in such a way as to provide a consistent income for an indefinite period of time. This resource would be channeled towards activities that help to free the country from its dependency on exports and imports and to consolidate food sovereignty.
Correa overturned a ban on the sale of shark fins, which are popular in Asia, but stipulated that the fins can only be sold if the sharks are caught accidentally and by artisan fishermen. He did not say how authorities would determine whether the shark had been caught accidentally or deliberately.
On August 3, 2007, Correa ordered the deportation of Sean O'Hearn-Gimenez, director of the Sea Shepherd Conservation Society, saying that he would not allow "gringuitos" (literally, "little gringos") to tell Ecuadorians what to do or to pursue local fishermen. However, a local newspaper noted that O'Hearn-Gimenez had signed a 5-year agreement with Ecuador's own Environmental Police rather than acting unilaterally (as a foreigner with no authority of his own), and was married to an Ecuadorian. The deportation was ordered because Sea Shepherd, in partnership with the Ecuadorian National Environmental Police, exposed and stopped the biggest shark-fin shipment in the port city of Manta. Correa later rescinded the extradition order because O'Hearn-Gimenez was married to an Ecuadorian woman. All the arrested fishermen were released, too, and the confiscated shark fins returned to them.
Rafael Correa was re-elected for a second term in April 2009. It was the first time in thirty years that the country had re-elected a President. He won by a margin over the other seven candidates, taking 52 per cent of the vote to the 28 per cent of Lucio Gutiérrez, his nearest rival. His party also won the largest legislative block in the National Assembly, although not a majority.
Correa was sworn into the Presidency on 10 August 2009, the same day as Ecuador's bicentennial. His speech took place in front of several South American dignitaries, such as President of Argentina Cristina Fernández de Kirchner, President of Bolivia Evo Morales, President of Cuba Raúl Castro and President of Venezuela Hugo Chávez. Correa used the opportunity to promise a continuation of his “socialist revolution”, his plans to end poverty and to go on “stamping out the structural causes of poverty”. He also said the actions of the media were opposing his government. He claims that the continuation of his "citizens' revolution" policy is intended to ensure all citizens are equal.