Ecuador

Michael Pollak mpollak at panix.com
Tue Jan 18 16:19:31 PST 2000


On Mon, 17 Jan 2000, Doug Henwood wrote:


> Ecuador seems to be blowing up - economic crisis, strikes, protests.
> Does anyone know what's going on?

It doesn't seem that mysterious, does it? They started out in a precarious fiscal position 3 years ago largely because of political deadlock. The people elected an outsider, a left populist named Bucaram, so notable for eccentricities (like his willingness to shake his booty in public) that he was known as "El Loco," and who came to embrace the name himself, saying it was a symbol that he didn't accept the standard ways of doing things. He did make generous promises about welfare, and he didn't have much support in the Congress. But the Congress reacted by inventing a new kind of congressional coup -- they impeached him on the grounds of "mental instability." He fled (I think to Panama?) and afterwards the Congress accused him of stealing millions of dollars. Both the mental instability charge and the corruption charge had the look of being trumped up (it all happened so fast and was so partisan), but for all I know it was true. At any rate, the established parties were back in charge, and just as deadlocked as ever. There was some argument about whether the head of congress, who was now interim president, could fill out Bucaram's term (which seemed to be clearly his goal), but eventually it was decided there had to be another election. And in came Mahoud, who had a reputation as a competent manager.

Meanwhile, during the year of Congressional rule, and during the year of Mahoud's rule, everything that could go wrong did go wrong. The country was absolutely devasted by El Nino and La Nina. Mudslides, floods, you name it. A billion dollars in damages. Things hanppened that hadn't happened in centuries. For example, a volcano became active that everyone had forgotten about, and which just happened to be placed right next to their main resort town, reducing one of their few earners of hard currency to virtually zero for the year. And all this made an originally bad fiscal situation ten times worse, and led to the Brady Default, and to a continually worsening situation thereafter.

Meanwhile of course, Mahoud had come in trying to push through an austerity program, and between the political deadlock that led everyone to be his rival and het up the opposition, and the poverty of the people in the first place, every step he took (raising the petrol price, for example) led to massive strikes from the outset and backing down on his part. So early in his term, about a year ago, the banks were so depleted that he took the enormous step of freezing all bank accounts. Not just big accounts, or hard currency accounts, but every bloody bank account in the country. Nobody could get their own money. Sometime afterwards, he set up a system whereby people could withdraw their money, but only 10% at a time.

Naturally every single person in the country was furious. And that was a year ago. The remarkable thing is not that there is opposition in the country, but that after this long is still looks like it might not be enough to topple him. Although one can imagine people's disgust with political tumult.

The lesson I come away with I compare Ecuador with Venezuela and Uruguay is that there is a vast populist disgust with long-ruling and completely corrupt two party systems, and a lot of push for any kind of solution that would throw out all presently acting politicians and start over again. In Ecuador and Uruguay it wasn't enough to stop the duopoly. In Venezuela it rather remarkably was. What will happen next there is a very interesting question.

Michael

__________________________________________________________________________ Michael Pollak................New York City..............mpollak at panix.com



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