By Rodrigo Acuña
19 October 2019
With most of the world’s corporate media giving endless coverage to protestors in Hong Kong, a far more critical political crisis has just taken place in the South American country of Ecuador. Although the government of Lenin Moreno continues to be in power, it has only just survived after a series of major protests led by the country’s indigenous communities, transport unions and student groups.
After days of massive demonstrations that started on October 3, which were sparked off by the government’s acceptance of a structural adjustment package by the International Monetary Fund (IMF) in March at $4.2bn, and saw Moreno recently end a fuel subsidies program that resulted in a 30 percent increase in the price of petrol, the administration moved its entire seat of government from the capital of Quito to Guayaquil for security reasons. When serious police repression and hundreds of arrests was still insufficient to quell protestors, Moreno called out the military and declared a state of emergency.
Once in Guayaquil, flanked by the military and members of his government, Lenin addressed the nation in a short video. Blaming ex-president of Ecuador Rafael Correa and Venezuela’s president Nicolas Maduro for the massive protests, Moreno stated that “the satrap that is Maduro has activated, along with Correa, his destabilization plan”. These two leaders, according to Moreno, were the ones that “are behind this attempted coup and are using and manipulating some indigenous sectors, taking advantage of their mobilizations to loot and destroy.” In another declaration Oswaldo Jarrin, Moreno’s Defence Minister, labelled the protestors “terrorists” and “criminals” while threatening to use lethal weapons.
When much of the global media turned its attention to Ecuador, the story was completely simplified. Here was a government trying to implement much needed economic reforms, however, with certain sections of society violently protesting, officials needed to resort to martial law to restore order.
Writing on October 13 on the violence by certain protestors, Michael Weissenstein and Gonzalo Solano in the Associated Press said nothing about State repression against sections of the media that were critical of Moreno (TeleSUR’s signal was taken off air on October 12 while Radio Pichincha Universal was raided by police), the hundreds of people wounded or the more than 1,000 people who were arrested, according to the Ecuadorian Ombudsman. On October 9, Amnesty International (AI) put out a statement condemning Ecuadorian authorities “heavy-handed repression of demonstrators, including mass detentions”. AI also called for authorities to investigate “allegations of arbitrary arrests, excessive use of force, torture and other ill-treatment of those who have been detained in the context of the protests.”
Weissenstein and Solano were also bereft of writing anything insightful on Moreno’s broader policies that contributed to trigging such massive protests. Writing on his track record of governance once he took office in early 2017, the authors simply state that: “Moreno served Correa as vice president before he became president and the two men went through a bitter split as Moreno pushed to curb public debt amassed on Correa’s watch.”
Guillaume Long, former Foreign Minister of Ecuador and a researcher at the French Institute for International and Strategic Affairs, challenges the above perspective. Speaking on a panel on Al Jazeera, Long argues that debt was “below 40 percent of GDP” which is “half of the European Union’s debt”. This debt, from Long’s perspective, is “pretty low by [an] international comparative perspective” while Moreno for his part indebted the country more in 2 years than did ex-president Correa in 10 years from 2007 to 2017.
According to Joe Emersberger – a Canada based observer of Ecuadorian politics – the Moreno administration has been looking to take out private loans to benefit the private sector while refusing to borrow internally. From his view Moreno’s “priority has been to just give the rich whatever they want.” And with the IMF package expecting a 20 percent cut in wages for new public sector jobs, the requirement that public sector employees sacrifice one day’s worth of wages to the government each month, and see their vacations days cut in half from 30 to 15 days a year, Emersberger’s comments appear on point.
Indeed, when one looks at who benefits from the IMF’s loans, it is difficult not to conclude that, not only is Moreno a neoliberal ideologue who did a 180-degree political turn soon after he took office (he was originally voted on a leftist agenda that promised to continue Correa’s “citizens’ revolution”), but is also personally corrupt.
Wilma Salgado – former Minister of Economic Affairs of Ecuador and an expert on fiscal affairs under various administrations – argues that the biggest winners of the IMF package are fossil fuel corporations, an offshore phone company, Exportadora Bananera Noboa S.A., several private banks and a Mr. Alex Bravo – a former manager of Petroecuador “known to still have accounts in offshore tax havens”. Currently in prison, Bravo owes US$6.3 million but will be forgiven US$3.9 million in debt thanks to the IMF. Salgado notes that the Brazilian construction conglomerate “ODEBRECHT is also on the list, owing US$11.8 million of which US$4.5 million will be forgiven.” In recent years ODEBRECHT was involved in massive acts of corruption throughout South America “for which Ecuadoran beneficiaries and accomplices have yet to stand trial”, according to Salgado.
Earlier this year, prior to WikiLeaks founder Julian Assange being expelled from the Ecuadorian Embassy in London and arrested by British authorities, Ecuador’s attorney general started an investigation into president Moreno and his family based on the establishment of INA Investment Corporation. Established in 2012 in Belice by Edwin Moreno (Lenin Moreno’s brother), a series of documents known as the INA Papers have implicated that, through INA Investment Corporation, the president and his family have allegedly, notes one press report, “been involved in crimes of corruption, perjury and money laundering”.
With that political crisis gaining momentum, and WikiLeaks publishing the INA Papers, Moreno, according to ex-president Correa, was motivated to hand over Assange to the British in order to deflect attention from himself and the ongoing investigation.
Returning to the latest political crisis over Ecuador’s acceptance of an IMF package, in the last few days Moreno has once again bought himself more time having reached a deal with the protestors and the Confederation of Indigenous Nationalities of Ecuador (CONAIE). Claiming he will reintroduce the fuel subsidies program, one economist writes that the “agreement contains other regressive ‘reforms’ that are sure to be unpopular, including layoffs, wage cuts, regressive tax increases, and pro-employer changes in labor law.”
Speaking to CNN ex-president Correa said Moreno’s government had been left in a “vegetative state” given that the level of State violence against protests was quite remarkable and has left “deep wounds” throughout Ecuadorian society. How much longer Moreno will continue in office remains to be seen but chances are high his legitimacy will once again be challenged.