By Stansfield Smith on April 17, 2017
Ecuador’s transformation during the presidency of Rafael Correa (2007-2017) and the Citizens Revolution stands as a significant step forward for the worldwide struggle against the world’s 1%. President Correa, who leaves office at the end of May, came to power in a country traditionally controlled by a super-rich elite, dependent on oil and commodities exports. Ecuador still suffered from the devastating effects of corrupt banker dealings, which caused the currency and citizens’ savings to lose two-thirds of their value, leading to the US dollar becoming the new national currency. Governments preceding Correa instituted neoliberal austerity and privatization programs, prompting inequality, poverty and unemployment to soar. Ecuador became one of the poorest and least developed nations in the region. Poverty rates reached 56% of the population, and from 1998 to 2003 close to 2 million[i] Ecuadorians out of a population of 12-13 million, had left the country for economic reasons.
William Blum, in Killing Hope, wrote that the CIA in Ecuador had “infiltrated, often at the highest levels, almost all political organizations of significance, from the far left to the far right.” “In virtually every department of the Ecuadorian government could be found men occupying positions high and low who collaborated with the CIA for money. At one point, the agency could count among this number the men who were second and third in power in the country.”[ii] Ecuador was also saddled with the US’s largest air base in the region at Manta, which was instrumental in Plan Colombia and in enforcing international banking and corporate rule over Ecuador.
Ecuador’s economic collapse and social explosion was similar to Greece’s a few years later. But in 2006, after nine presidents in ten years, Ecuadorians elected Rafael Correa, who was no capitulating Greek Prime Minister Tsipras or Bernie Sanders. Correa’s government carried out programs that peoples in progressive social movements have advocated throughout the West if not the world. Ecuador provides an example for what Greece could have done when its crisis hit, if it had a firm anti-neoliberal, anti-imperialist leadership.
Ecuador’s Citizens Revolution, not a socialist revolution as in Cuba, arose from a popular repudiation of neoliberalism and neocolonialism, similar to Chavista Venezuela and Evo Morales’ Bolivia. It demonstrates what can be accomplished with social programs and infrastructure investments when national wealth is redirected to benefit the majority instead of the 1%, while still confined in a capitalist economy.
What did Rafael Correa do?
Correa was fortunate to be part of a South American resurgence, exemplified by the 1998 electoral victory of Hugo Chavez, which stimulated anti-neoliberal anti-imperialist movements also assuming power in Bolivia and to a much lesser extent in Brazil and Argentina. As with Chavez’ Venezuela and Evo’s Bolivia, Ecuador approved a new constitution by national referendum that includes a new social contract enshrining the rights of Mother Earth, the rights of Original Peoples, and protections for national sovereignty when it comes to natural resources.
Correa rejected IMF and World Bank policies, which had made Ecuador numerous loans to entrap the country in debt, a game plan for Western countries to dominate the global economy. Ecuador’s debt was $14 billion in 1980, the country paid back $7 billion, and it still owed $14 billion. The IMF demanded cuts in wages and state budgets, that 80% of the oil revenues go to debt payment, or it would use international courts to seize their fleet and their contents.
Correa renounced $3.9 billion of the debt (one-third of the total) found to be illegitimate, showing, he said, “government has the power to cancel debt” with clear lessons in Greece, Spain and Ireland. The savings were invested in meeting the nation’s pressing needs.
His government increased taxes on the rich, and cut down on tax evasion which bled government revenues. “The government is now collecting the taxes owed by companies” which Correa half-jokingly said was “a radical innovation in the capitalist world.” Government funds quadrupled.[iii] Correa also instituted a tax on capital flight, generating $1 billion in revenue between 2012-2015.[iv]
He compelled the Central Bank to repatriate billions in assets held abroad, and renegotiated oil contracts with multinationals on more favorable terms. These new funds enabled the government to triple investments in infrastructure and public services, such as housing, free education and health care. The economy was diversifying, away from dependence on oil, so that now non-oil exports accounted for 64% of export income.[v]
These measures enabled Ecuador to experience a 4.2% annual growth from 2007-2015, even during the 2008-2009 international financial crisis brought on by Wall Street corruption. Not only has Ecuador’s economic growth been among the best in the region, but it has also favored the poorest in the country, making Ecuador a worldwide leader in reducing socioeconomic inequality. Unemployment is now down to 5.2%.
Since 2014 the national income shrank as oil and commodity prices hit near record lows. In 2016 Ecuador was hit by a major earthquake, the country’s worst natural disaster in 70 years, killing 668 people, causing $3.3 billion in damages, equal to 3% of the Gross Domestic Product, and harming the economy. Ecuador also has been hurt by the rise in the dollar, making its exports more expensive. These factors combined to create a recession in Ecuador, after years of impressive growth. However, by December 2016, the rate of economic growth had risen to 3.3%,[vi] with an inflation rate of only 1%.[vii]
Contrary to stories that Ecuador is now crushed by debts to China (which stepped in after Western banks cut lending), the country actually reports one of the lowest debt levels in Latin America. At the end of 2016, Ecuador reported a foreign debt of 25.7% [viii] relative to the GDP and a total debt is 26.9%. This is lower than under the ten preceding presidents.
Education: The Key to Developing and Diversifying the Economy Correa has said “quality, free public education is the basis of a real democracy,” and that the path away from a Third World raw material export dependent economy lies in raising the educational and skill level of the population.[ix] Consequently, over $20 billion has been invested in education over his ten year presidency. Not only is education free, including university, but to reduce barriers for low-income students the government provides free school supplies, books, uniforms, and meals. Now more than 300,000 children who used to have to work have gone back to school.
Ecuador is completing a program of building 14 schools focused on teaching and preserving the country’s various ancestral ethnic languages. So far Quechua and Shuar language schools[x] are operating. Royalties from nearby mining and oil projects now are allocated to help fund many of the advanced and modern schools being built in the indigenous countryside.
In contrast to the U.S., where student loan debt is now $1.3 trillion,[xi] in Ecuador free education is a human right, guaranteed through university. In 2015 the country had the second highest level of public investment in higher education in the world. Over $1 billion has been invested [xii] in university construction, including in the Amazon region to specifically serve the Original Peoples of the country. These government efforts, combined with student stipends, have led to the number of poor students in university doubling, while the number of Original Peoples gaining university degrees has almost tripled. Compared to 2006, now a quarter million more Ecuadorans are in university.[xiii]
Social Programs to Fight Poverty
Ecuador’s minimum wage has more than doubled, from $170 a month in 2007 to $375 today, one of the highest in Latin America. The minimum wage, unlike the case with US minimum wage earners, covers the cost of the basic basket of goods, whereas in 2006 it covered only 68%.[xiv]
In the US, the minimum wage has fallen by 1/3 since 1968[xv], and here, people normally do not have free health care. Moreover, Ecuador has enforced a living wage policy, revolutionary if instituted in the US: companies cannot pay dividends until all employees earn a living wage.
The labor of homemakers, contributing to 15% of the GDP, is now legally recognized. Consequently, 1.5 million homemakers, and so their families, now receive social security benefits, including disability compensation and a pension.
The Bono de Desarrollo Humano [Human Development Bonus] of $50 a month aids 1.3 million poor families with children. Now 328,000 three and four year-olds go to pre-school, compared to 27,470 in 2007.[xvi]
These various Citizens Revolution programs to serve Ecuador’s citizens, combined with major investments in infrastructure and economic development, have reduced the poverty rate from 37.6% in 2007 to 22% today. Rural poverty has been reduced from 61% to 35%. Extreme poverty has been cut in half, from 13% of the population in 2006 to 5.7 % now [xvii]. Poverty among Afro-descendants, 7% of the population, dropped by over 20%. In a country of 16.5 million today, in ten years, two million have risen out of poverty.
In contrast, 46.7 million US people live below the poverty line, 15% of Americans, up from 12.3% in 2006 (including the undocumented poor[xviii] , it is over 50 million.) The Black population in poverty totaled 26.2% in 2014, up from 24.7% in 2007.[xix]
Ecuador slashed income inequality: before, the richest 10% of the population accounted for 42 times as much as the poorest 10%, now it is 22 times as much, one of the most dramatic reductions in inequality in Latin America.
Health Care
In contrast to the U.S. corporate for profit health system, Correa has invested over $16 billion[xx] in providing quality free health care, eight times that between 2000-2006. In the 40 years prior to the Citizens Revolution, not one new public hospital was built in any of the main cities. Since then, 13 new hospitals have been constructed, with 18 more underway around the country.[xxi]
This health system has added 34,000 medical professionals. Thanks to free health care (still a dream in the United States), combined with increased access and services, visits to the doctor have almost tripled in ten years.
Environmental Protection
The United Nations recognizes only eight countries in the world as meeting the two minimum criteria for sustainable development.[xxii] In the Americas, there are two, Cuba and Ecuador. They enjoy “high human development”(“very high human development” in the case of Cuba) while keeping their Ecological Footprint lower than 1.7 global hectares per person, according to Global Footprint Network and United Nations data.
Ecuador made major advances in converting to renewable energy. Correa noted, “Thanks to the investment made in energy generation made in the last 10 years, with immense cooperation from China, Ecuador now counts on 85 percent [now 95%] renewable energy, one of the highest percentages on the planet.” [xxiii]
By 2015 Ecuador had cut the rate of deforestation in half, and plans to reduce it to zero this year.[xxiv] Part of this includes reforestation, and the country broke the Guinness world record for the number of trees planted[xxv] in a day. The country also pays communities, mostly in the Amazon, to protect forests [xxvi] by permitting only fishing and hunting within them.
For the fourth straight year, Ecuador has won the award, “World’s Leading Green Destination 2016” by the World Travel Awards, regarded as the Oscar of tourism.[xxvii]
Defending Original Peoples’ and LGBT Rights
To preserve Original Peoples’ identity, besides providing a system of new schools in native languages, the government has fostered public TV and radio stations which promote programs in Quechua and other languages. These projects have boosted the use of different endangered native languages and strengthened Original Peoples’ identity and shared heritage. The 2013 Media Law gave the indigenous communities even greater access to community media. By December 2014, 14 radio frequencies, combined with funding and training, have been assigned to each of the country’s indigenous groups.
It is now illegal for employers to discriminate due to sexual orientation, and the government cracks down on “gay treatment centers” where LGBT people are forced to undergo “treatments” meant to change their sexual orientation. Same-sex unions are legal and a gender identity law allows citizens to state on their ID their gender identity instead of the sex given at birth.
Affirmative action laws now require companies to reserve 4% of jobs for people with disabilities, and other quotas for minority ethnic groups, such as Original Peoples and Afro-descendants, in order to combat discrimination and narrow inequality gaps.
This year, the UN Department of Public Information recognized Ecuador for its innovative public policy for people with disabilities. Correa noted, “Ecuador would have never been a world model in the past. We now set an example to the planet in many areas as in this case with programs for people with disabilities.” [xxviii]
The UN special rapporteur on Indigenous Peoples also highlighted the efforts of Ecuador and Bolivia to implement the UN Declaration on the Rights of Indigenous Peoples. She declared that Ecuador and Bolivia are unique in their efforts to enact the charter into law.[xxix]
Democratizing the Media
“When we came into government in 2007, there were five TV channels in Ecuador, four of them owned by the four biggest banks in the country,” noted Culture Minister Guillaume Long. The media law,[xxx] passed by national referendum, prohibits banks from owning the media. It redistributes the airwaves into three parts: a third for private, for state-owned, and for community grassroots outlets. A company cannot own more than one AM station, one FM station and one television station. This is an important advance, but the oligarchy still dominates the media. Foreign minister Ricardo Patino explained on Democracy Now [xxxi] “What we’re doing is promoting the broadening of freedom and access to media…. There were no public TV, no public media, no public radio, no public newspaper. Now there are. And this allows there to be a diversity of media. And now they attack us for reducing freedom of speech.”
Anti-Imperialist Foreign Policy
In 2009 Ecuador joined ALBA (Alianza Bolivariana de los Pueblos de América), the anti-imperialist alliance of Cuba, Venezuela, Bolivia, Nicaragua and some Caribbean countries. The alliance has stood firm against US interference in Latin America and the Middle East, and cultivated relations with Russia, China and Iran in part to counter US power. Ecuador has also been a leader in regional cooperation and integration.
Correa closed the US military base at Manta in 2009, saying “We can negotiate with the U.S. about a base in Manta, if they let us put a military base in Miami.” These bases are used to assure US control of other nation’s natural resources, and kicking a base out of the country is often met with some form of Washington retaliation. A US involved coup was attempted against Correa in 2010.
Despite intense pressure from the US and the West, Correa granted political asylum to Julian Assange, Wikileaks founder, who Hillary Clinton actually inquired about how to kill.[xxxii] Asked about Chávez calling George Bush “the Devil” at the U.N., Correa replied that the comparison was unfair to the Devil.[xxxiii]
Correa not only repudiated part of Ecuador’s external debt to Western Banks, but expelled the World Bank’s manager, the US ambassador, USAID, and some US backed NGOs.
Ecuador vastly expanded ties with China, which now helps finance projects, including renewable energy, technology and educational institutions. These have contributed to national economic growth and ensure that the profits remain in the country. Chinese investments, Correa said, are “an example for Latin America and for the rest of the world.”[xxxiv]
Three Revolutionary Initiatives
Ecuador made the revolutionary proposal to leave the Amazon Yasuni oil in the ground to preserve the Yasuni’s unique biodiversity as a world treasure and carbon sink. In exchange, the country wanted compensation from the global polluting countries, a type of recognition of their ecological debt. The project was not just for Ecuador, but for the rest of the world – a signal about their overall need to control global warming, to live in harmony with nature and our fellow beings. Correa stated that no conservation will work that is not tied to people’s improved living standard. The Correa government offered not to drill oil in the Yasuni in exchange for 50% of the value of the reserves, $3.6 billion. However, the six-year initiative fell on deaf ears in the West. As a result, the Correa government opened a mere 3/4 square mile area of the Yasuni to drilling, within the 3800 square mile park. (In comparison, Canada’s tar sands strip-mining will most likely destroy 1160 square miles of the Canadian Boreal Forest, 1500 times as much. Canada now leads the world in deforestation.) Opening the Yasuni to drilling was not in opposition to all the indigenous, as we are told in the West.[xxxv]
At the Paris COP21 2015 Climate Summit, Correa called for an International Court of Environmental Justice to punish multinational corporations and developed countries’ environmental crimes and for reparations for their ecological debt. Rich countries have a historic debt to the Global South because of their plundering of resources, their carbon dioxide emissions, their continuous production of technological waste and their role in climate change. He noted, “Someone in a rich country emits 38 times more carbon dioxide than someone from a poor country,” there is a planetary emergency that demands worldwide action, an ecological debt that should be paid.[xxxvi]Corporations have international courts to protect their overseas investments, but developing countries do not have such institutions to protect their environment from these corporations. Countries can be sued for a financial debt, but there should be comparable suits for ecological debts. The case against Chevron [xxxvii] would be a prime example. In 2011, Chevron was ordered to pay $9.5 billion for environmental and public health damage for having contaminated part of its Amazon, home to more than 30,000 people. In contrast to the BP Deepwater Horizon oil spill in the Gulf of Mexico, Chevron deliberately dumped 19 billion gallons of oil waste, a quantity that is 140 times as much as that of BP. So far, 1400 have died from the environmental contamination. With $266 billion in assets in 2015, Chevron refuses to pay. An International Court of Environmental Justice could end this blatant abuse.
Ecuador has stated that wealthy citizens and companies hide $30 billion in overseas tax havens, equivalent to one third of Ecuador’s GDP, siphoning off national wealth. Ecuador just approved a groundbreaking referendum, stating politicians and public servants be barred from holding office if they hold assets in tax havens. Those affected will have a year to repatriate their assets. The issue of illegal capital flight and tax havens is a global problem, with $7.6 trillion – $21-$30 trillion, [xxxviii] adding corporate funds – lost to countries through capital flight, contributing to poverty and inequality. The developing world loses over $200 billion [xxxix] a year in lost tax revenue because of tax havens. Ecuador, as the new chair of the Group of 77 (134 Global South countries) is leading a campaign both for the elimination of tax havens and the creation of a new UN judicial body to regulate tax havens and recoup lost tax revenue. Long[xl] said “Corporations and wealthy people who avoid their obligations to pay taxes participate in denying the human rights of others, with every school that is not built, every medicine that is not bought for lack of funds, because the state doesn’t own the necessary financial resources.” “We can’t allow the practices of tax evasion and the tools used for it to continue to build an unjust economic system designed to enrich a small minority at the expense of the great majorities. It’s time to end these practices.”
US and Right Wing Campaign against Correa
As in Venezuela and also Bolivia, the US rulers, the domestic oligarchy and its rightwing supporters have sought to combat the progressive gains. Between 2012-2015, just one US agency, NED, supplied anti-Citizens Revolution political parties, trade unions, indigenous groups, and media with $30 million to foment protests. In 2013 USAID and NED spent $24 million in Ecuador, with their combined allocations for Cuba, Venezuela, Ecuador and Bolivia totaled over $60 million. [xli]
However, the US campaign against Correa started even before he first decided to run for president as documented in a Green Left Weekly [xlii] series and WikiLeaks.[xliii]
The first attempted US backed coup against Correa took place in September 2010, when he was temporarily held hostage by US-infiltrated police forces. The second came in summer 2015, when the oligarchy media and the right-wing deliberately misinformed the Ecuadorean public about two bills [xliv] aimed at increasing taxes on the wealthiest 2% to counter inequality in the country. These were later joined by some pro-opposition indigenous groups (CONAIE, Pachakutik, Ecuarunari – the latter two receiving USAID funding) and a few unions. Many of the protests turned violent, with attacks on police that left one hundred police injured. The lack of popular support led these protests to fizzle.
Corporate and much alternative media present the story that the indigenous are repressed by the government for opposing “extractivism.”[xlv] This is based on the selective focus and distorted reporting on a few indigenous groups. In reality most indigenous groups repudiate the conduct of the few anti-Correa ones.[xlvi]
Since Correa was elected president, over $800 million [xlvii] from abroad have gone to foreign NGOs in Ecuador. A number of Western NGOs (e.g. Amazon Watch, Pachamama Foundation) and too much of the liberal-left media (e.g., Guardian,[xlviii] NACLA Reports,[xlix] Jacobin[l]) have engaged in a propaganda campaign against the Citizens Revolution, claiming it represses the Original Peoples, sold the Amazon and its oil to China, undercut media freedom, shut down (Western financed) NGOs. Much of this is fake news [li], and cannot explain why the Original People vote for Correa was slightly higher than among the general population (In 2013 Correa won with 58% of the vote and over 60% of indigenous vote [lii]).
Conclusion
Ecuador, still a relatively poor Third World country, has made achievements we can still only dream of here: free health care, free university education, effective anti-poverty programs, democratizing the media, environmental protection, respect for the rights of oppressed groups such as LBGTs and Original Peoples, repudiation of debt gouging by the banks, increasing taxes on the rich, clean elections. It has taken the initiative, along with President Evo Morales of Bolivia, in demanding action by the West in combating
climate change and in shutting down tax havens. The challenges facing Ecuador remain the continued power of the old neoliberal ruling elite in the country, the need to further diversify the economy, to eliminate poverty, and the need to build an organized, politically active mass structure to carry on the Citizens Revolution.
The accomplishments of the Citizens Revolution have made President Correa one of the most popular presidents in Latin America.[liii] Moreover, in a poll of 18 Latin American countries, Ecuador ranked the highest in citizens’ evaluation of their country’s government, in reduction of corruption, and distribution of wealth.[liv] Yet, “The greatest achievement of this revolution is having recovered pride and hope. We recovered our country,” said Correa speaking on the 10th anniversary of the revolution.
Source: Council on Hemispheric Affairs