In the midst of the drama this past week in Quito, I was really disturbed at the prospect of yet another extrajudicial transfer of power in Ecuador. It’s been since 1996 and the end of Sixto Duran’s term from 1992 to 1996 that a president of Ecuador has served a regular term. And Sixto’s government was not without scandal and serious corruption, including scandals involving his family members and charges brought against his Vice President Alberto Dahik. Dahik fled Ecuador for Costa Rica once the Supreme Court denounced him, and took along the funds he’d stolen from the treasury. But, he had nothing on Sixto’s successor, Abdalá Bucaram.
The Bucaram administration set new records for combining populism and corruption, and in the course of his short term (10 August 1996 – 7 Feberuary 1997), Bucaram and his henchmen managed to rape the national treasury while simultaneously enacting neoliberal “reforms” (punishments is probably a more appropriate term). Bucaram himself walked away when his government toppled with at least $22M. Bucaram’s corruption, though, hurt the wealthy as well as the poor, including scheme’s requiring bribes to get imported goods released from Guayaquil customs. And so, Bucaram’s government was toppled by mid-level military officers, the indigenous movement, and the popular sectors. It’s hard to imagine that anyone outside of his political party patronage network was all that upset. Of course, Bucaram didn’t pay the price for his criminality. He simply went into exile in Panama, where he still lives.
Until Correa’s election in 2007, under a previous constitution, there has been an endless succession of short lived and temporary administrations: Fabían Alarcon (Feb 1997 – August 1998); Jamil Mahuad (Aug 1998 – Jan 2000); Gustavo Noboa (Jan 2000 – Jan 2003); Lucio Gutierrez (Jan 2003 – April 2005); Alfredo Palacio (April 2005 – Jan 2007); and now Correa (Jan 2007 – Present). The instability at the top is expressive of both the abject corruption of the nation’s political class, and of the deep, deep damage done to Ecuador by neoliberalism. Mahuad, who was once a very successful and well-respected mayor of Quito, in part lost the confidence of the various sectors of the country because of a financial crisis caused by runaway inflation and the decision to official dollarize the Ecuadorian economy in response. And, while dollarization has provided a real measure of stability to inflation and interest rates, it also caused serious suffering from the lower middle class on down because of a real dislocation between new prices and wages. And, of course, the credit markets are only available to those who don’t necessarily need them.
There is a connection, as well, between dollarization and the current circumstances in Ecuador. By dollarizing the economy, Ecuador’s federal treasury ceded fiscal policy to the US Fed for all intents and purposes. The weakening of the US Dollar that began with the Bush administration put real strains on Ecuador, and left the country without any tools to respond. (The only thing minted in Ecuador today is coinage, because its weight makes it cost preventative to import.) Additionally, the national economy of Ecuador is tied intimately to petroleum extraction. Correa has been pursuing new regulations on the industry that would benefit the country, but that is subsidiary to the reality that petroleum prices aren’t where they were earlier during the Correa administration. (Ecuadorian crude is trading at about $70-75/barrel right now, and tends to get prices about $5/barrel lower than the international market average. In January 2007, Oriente crude was trading at about $47/barrel, but it peaked in July 2008 at like $126/barrel!)
What does all this add up to? Well, Correa took over a country steeped in political corruption, dependent on both international primary source markets, and on the fiscal policy needs of the US Fed during the midst of the USA’s housing-induced meltdown. I don’t want to go into the ins and outs of the new constitution, or the personality factor which has enabled Correa to alienate just about every group in Ecuadorian society at some point to some extent. I just want to note that this backdrop of political and socio-economic instability have defined Ecuadorian political economy for the past 20 years.
Which brings us to the police and the particular circumstances of Thursday. Despite my sympathies for the Correa administration, what I don’t understand is how he and his security team allowed themselves to be put in a situation where the president of the country was assaulted, tear gassed, backed into a Hospital, and required a confrontational liberation from several battalions of Ecuadorian troops? Was this an initial bad decision that spiraled into an opportunistic putsch attempt by the Quito police regiment, or something that was planned? In his speech late thursday night, Correa blamed Lucio Gutierrez as the figure behind an attempted golpe, but something doesn’t ring true given the circumstances of the initial confrontation. If the police were so upset, and Correa had no intention of ceding to their demands to reconsider cuts in their benefits, then why provoke a confrontation in the street? Why not send a negotiator to them, why escalate the stakes?
There are reports, going back to Philip Agee in the 1960s, that the Quito Police Regiment and its training school have been fertile ground for CIA infiltration and recruitment. And, I don’t doubt this. And I’m sure the Correa administration knows it. In fact, there have been confrontations between the US Embassy and Correa’s government specifically over meddling in the police. Two diplomats were expelled from in 2009 over such allegations. And its impossible for anyone conscious of the history of the CIA, and how it operates in Latin America, to see this as a coincidence with what happened on Thursday. But still, I’m having a hard time figured out what was orchestrated by whom. Was the immediate escalation by the police into a national strike, itself a source of instability, a spontaneous or a coordinated effort?
In the end, though, it is just heartbreaking to think about bullets flying in the streets of one of my favorite cities in the world. I just hope that this crisis can be long-term averted, and the Correa administration lives out its constitutional mandate. Honduras was enough. Let’s not move back to an earlier period of regional history where Latin American governments were routinely toppled by military enforcers of the ugly side of modernity.