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April 26, 2007
Which Way for Ecuador?
Whither goest Ecuador? For weeks, the tiny Andean country has been roiled by political uncertainty as politicians have clashed with police in the streets and the public in the ballot box.
Which, for President Raphael Correa, is better news than one might think.
Former president Lucio Gutiérrez was driven from office and into exile in 2005 after street protests overwhelmed the country. The demonstrations followed a controversial move on the part of the ex-president to sack the Supreme Court of Justice.
Correa, who took office just last January, seems to have the population behind him in this latest round of disruptions and the protests have been mainly against members of the legislature.
Ecudorians spoke loudly on April 15 when more than 78 percent voted in favor of Correa's plan to overhaul the government by calling for a constitutional assembly — a body that will be empowered to dismiss or change the three branches of government.
The next step will be for Ecuadorians to vote again in several months for 130 assembly members who, a few months after that, will meet to rewrite the constitution.
Yet, his opponents continue to fight his efforts. The Electoral Tribunal's dismissal of the congressmen last month had plunged all three branches of government into legal chaos and it didn't appear that this latest development would quickly restore stability.
And, this week, the conflict concerning the deposed lawmakers was ignited when the country's highest court reinstated them — a move Correa blasted as "shameful."
A judge who attempted to make this move a month ago was fired by the Supreme Electoral Tribunal — the body that dismissed the legislators in the first place.
But Correa has the upper hand at the moment with the question of how the lawmakers will be reinstated up in the air and the support of the public at his back. The outcome of the referendum has strengthened given him a freer hand to advance his other causes.
Just more than a week ago, Correa announced Ecuador had paid off it's debt to the International Monetary Fund with a $9 million payment and he now intends to sever ties with the financial institution.
In making the announcement, Correa made an overt comparison between Ecuador and Veneuzuela who also announced it had paid off its remaining debt with the IMF and World Bank that same week.
"We don't want to hear anything more from that international bureaucracy (the IMF)," Correa said, brushing off suspicions that "we are imitating brother nation Venezuela."
These include increasing state control over natural-resources industries. Indeed, the process of renegotiating contracts with private oil and gas firms so to give the state a majority stake and increased revenue could begin this year.
Yet Correa has made clear his intention to move away from the market-style economy many outside the country are pushing.
He has insisted he will not renew talks for a free-trade agreement (FTA) with the U.S. and he has also made clear his intention to reform the Banco Central del Ecuador (the Central Bank).
In the first quarter of this year the state-run bank and the 23 private banks operating in the country posted a combined $76.29 million in net profit, up 10% from $69.45 million a year earlier, according to the Banking Superintendency.
The question of whether or not Correa intends to default on the country's $16.4 billion foreign debt as he said he intended to do in his campaign for presidency.
Interestingly, some believe Correa's current popularity may work to keep him from more radical measures such as complete debt default — a last-ditch option for bolstering populist credentials.
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