[ecuador] the grim view of an ecuadorian academic Date: Tue, 18 Jan 2000 18:41:19 +0100 this is another kind of view of the situation by someone who seems to be an academic person in Ecuador. Brief update (2000-01-17) To the friends of CERLAC, and everybody else interested in Ecuador: I hope you are doing well. The following is a very simple and broad view of the current Ecuadorian situation. I don’t know how much information on Ecuador’s this year’s economic, social and political crisis is available for you. Let me sum it up: a new monetary scheme rules in the country and with it a new structural adjustment program, and there is social unrest. The political stability of the government, however, is not compromised anymore. Ecuador’s government opted for a plan of "dolarisación" of the economy. This plan is a variant of the method for "peggin" the sucre to the dolar. The government bets that in two months (i.e. in March) 80% of the sucres will be changed into U.S. dollars, at a freezed exchange rate of 25,000 sucres per dollar; in the meantime people is living with two currencies: sucres and dollars. All the money exchange will happen through the banking system. The new scheme paralysed all operations in foreign exchange for a couple of days; but today banks, money exchange facilities and the commercial activities are working normally. The country seemed "pacified" with the illusion of having enough dollars to live. I'm not a proffesional economist, but even for me it is obvious that given the predatory instintcs of the Ecuadorian banks, and the willigness of the government to support them, it is possible that the banks would use the dolarisacion for taking out of the country all the money they could. To give you only one example: Filanbanco, a bank that received a government's ""rescue package" of U.S.$ 700 millions in last year's March, made until the 31st of December a profit of U.S.$ 80 millions only in foreign exchange operations. The dolarisación was chosen, among other reasons, because of the bank's pressures. In his letter or resignation, Pablo Better (Director of Ecuador's Central Bank until January the 3th), says: "The dolarisación wasn't ever an option. The President changed his mind suddenly, and he saw it as a way to buy support and prevent an upcoming coup d'etat ..." (the letter was published in El Comercio, Jan, 05; you can read it in www.elcomercio.com ). The President's decission has been very effective in stopping the pressures coming from both the serrano and guaquileno oligarchies, which are now supporting the government in Parliament. In addition, the Armed Forces have confirmed their support to President Mahuad. The social situation, however, is much more despising. In all my life I haven’t seen so many poor people crying on TV; they are not only poor people, but also middle class ones that are affected by the delayed payment in their "freezed" savings. There’s sadness and frustration, but not anger; at least, not "active anger", in the sense of support for organised dissent. CONAIE (the indigenous movement's umbrella organisation), the worker's movement and various other organisations of the popular classes have called for a "popular uprising". Poor peasants, mostly natives, are marching peacefully to Quito, and "Parlamentos Populares" have been called. The army has publicly agreed to not interfer with the march by itself. No violence is expected, if it takes place it would happen in Quito. All the leaders of the protest are already in Quito, asking for support for the recently established "Parlamento Popular". Of course the government and all the other powers of the State are denying any law-abiding legitimacy to Parlamento Popular’s resolutions. In the best scenario, the Parlamento, the whole movement could achieve moral force, but politically speaking they are defeated. CONAIE, the worker’s movement and middle-class "social movements" have failed in obtaining and mobilising widespread support. Up to today, the "uprising" hasn't been able to provoke major disruptions in roads or food provision. They have shown their limits, and this by itself is a triumph for those who defend the status quo. Additionally, the government jailed 30 leaders of the workers' and students' movements. Even in those media that are normally simpathetic to CONAIE and other popular organisations, there is an atmosphere of deafeat . The whole situation seems to me one of those textbook lessons in Third World politics. The popular classes have been defeated again; the dominant class has reaffirmed its hegemony. The most basic political liberties, like the right to public protest and free information, are suspended; but the appearance of democracy remains untouched. However, if you walk in Quito's streets you would be surprised by the calm that prevails. One of the lessons that Ecuador has taught me recently is that this country is not prone to social explosion or sudden collapse, instead it tends to follow its own particular pace of disintegration. Drama does not necessarily mean abrupt disruptions; it could be only a cathartic moment. I hope that my grim description would not blind you to see whichever hope for change that may exist. Cheers, Pablo . Louis Lefeber CERLAC, York University Professor emeritus Toronto, Ontario Economics and Grad. Program for tel.: (416) 736-5237 Social & Political Thought fax.: (416) 736-5737