Ecuador: open for business under neoliberal president

Protestors condemn President Moreno as a right-wing puppet

Fight Racism! Fight Imperialism! 268 February/March 2019

In April 2017, Lenin Moreno was elected as President of Ecuador with the promise he would continue the progressive policies of the Citizens’ Revolution (CR) movement that had started under Rafael Correa in 2007. In practice, he has made a sharp economic turn to the right, imposed autocratic rule and trampled on the country’s democratic institutions. Nearly two years after he took office, Moreno’s presidency reflects the resurgence of neoliberal ideology in Latin America and is a setback for the progressive movement.

Rafael Correa, who described himself as a revolutionary, had focused on wealth redistribution and development; between 2007 and 2017 extreme poverty in Ecuador was reduced from 20% to 4% of the population; by 2013 inequality according to the Gini coefficient had declined by six points – more than twice the average fall in the region. In 2008 Correa declared a moratorium on Ecuador’s international debt service and attacked the IMF, bankers and privatisations: ‘Ecuador is no longer for sale,’ he declared; ‘The country of despair has become one of hope’. Such a challenge to imperialism in Latin America, part of a tide of progressive governments pushed to power by growing social movements that included Hugo Chavez in Venezuela and Evo Morales in Bolivia, could not be permitted to continue.

The campaign of Lenin Moreno – who had been vice-president under Correa – was overtly based on his dedication to following in these footsteps. Indeed, only days after he won the 2017 presidential election we wrote: ‘the challenge for Moreno now is to maintain the momentum of PAIS Alliance’s successful “Citizens’ Revolution”’. However, once elected Moreno made it clear that his path was one of neoliberal economic policy, a disregard for the poor and oppressed, a reconciliation between the wealthiest Ecuadorians and the government, and a determination to destroy the CR movement. Despite the gains made by the Ecuadorian working class under Correa, the necessary forces had not developed that could have resisted this process.

Economic policy

Moreno’s first policies ensured an end to the economic growth and significant reduction in wealth inequality and poverty that Ecuador had seen under Correa by realigning foreign policy with the US and appointing Richard Martinez – who viciously opposes any redistributive policies – as finance minister. While almost one in 10 people in Ecuador lives on less than $50 a month, Moreno and Martinez formed an economic plan in April 2018 which included cuts of up to $1,000m to the public sector and tax breaks for the business sector. Four months later, while imposing more austerity, Moreno passed a law that ended Correa’s development policies, offered amnesty for tax evaders, and limited workers’ rights. The government says it wants to ‘facilitate wage competitiveness’ in an effort to reduce wages nationally. Moreno is deliberately pursuing policies which push the country closer to the brink of collapse so that there is no alternative other than to turn to the IMF, which is offering Ecuador $1.4bn in exchange for harsh austerity measures. Additionally, one government adviser, Santiago Cuesta, announced in November 2018 that the government would be privatising the electric utility companies, the national telecommunications corporation and a state-owned insurance company, among other companies and public works that had been built, developed or nationalised under Correa. Moreno has also done away with the so-called ‘windfall profit tax’ which Correa introduced in 2006, which imposed a tax, initially of 50% and later of 99%, on profits made by investors in the country’s state-owned oil and gas industries, replacing them with a new form of profit-sharing contract.

Democracy

Moreno has systematically targeted democratic institutions through his handpicked Council for Citizen Participation and Social Control (CPCCS), which has, amongst other changes, dismissed the Judicial Council, the National Electoral Council, the Attorney General and all six major regulators and appointed members of the judicial council and an interim prosecutor without contest or correct due process. Most crucially, in an act described by Correa as ‘a real coup’, the government has sacked the entire Constitutional Court. The court’s nine judges are to be replaced by ‘mercantile judges who historically have placed corporate interests above human rights… judges linked to the defence of the interests of capital’, according to Andres Arauz, a former member of Correa’s economic team (Counterpunch November 2018).

At the same time, using the pretext of a fight against corruption, Moreno has targeted political opponents, particularly Correa himself, who has been living in exile near Brussels since 2017 after having 14 criminal proceedings made against him. Former vice-president Jorge Glas has been jailed and Fernando Alvarado, former Secretary of Communication, had to flee the country. Moreno has also moved to block them – illegally – from participating in elections. He has threatened to end the asylum offered to Wikileaks founder Julian Assange, currently living in the Ecuadorian embassy in London.

Environment

In December 2018, Marcelo Mata Guerrero, a former executive at the Spanish oil company Repsol was appointed as new Environment Minister. Guerrero is expected to expedite the granting of a permit to allow the state oil company PetroAmazonas to develop the Ishpingo-Tambococha-Tiputini (ITT) heavy crude complex in the Yasuni National Park which has to date been held up by environmental concerns. ITT will threaten the existence of the Tagaeri-Taromenane indigenous community as well as destroy one of the most biodiverse areas in the world. Moreno has announced that he is working towards creating a public policy measure for the mining sector, which Ecological Action says will ‘facilitate mining operations in areas that are environmentally vulnerable’.

In the face of this sustained attack on the gains of the past 12 years,  there is a desperate need for a resurgence of the kind of grassroots movement that originally brought Correa to power – led by the working class, the campesinos, the indigenous people’s movements – that declares once again that Ecuador is not for sale and challenges the designs of imperialism to force the people back into poverty and subjugation.

Cassandra Howarth

 

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