Roger Even Bove, Ph.D.
Associate Professor of Economics
Dept. of Economics & Finance
West Chester University
West Chester PA 19383-2220
Phone: 610-436-2134 email: rbove@wcupa.edu or rebove@post.harvard.edu
Fax: 425-645-4198 or 610-436-2592
Website: http://courses.wcupa.edu/rbove/Genkey.htm
-----Original Message----From: 50 Years Email List [mailto:stop-wb-imf@50years.org] On Behalf Of 50
Years Is Enough Network
Sent: Friday, April 22, 2005 2:35 AM
To: 50 Years Email List
Subject: (50 Years) Ecuador: new gov't anti-IMF
Key excerpts:
1) "[Palacio] and his economic minister, Rafael Correa,
criticized his predecessor's fiscal austerity measures and
ties to international lending institutions. Even before
Mr. Palacio took over as president, he had called it
immoral for a country to use 40 percent of its budget to
service its debt, and his new government may reconsider
the direction of trade talks now under way with the United
States. Mr. Palacio and his ministers have criticized the
government's fiscal responsibility law and have said they
would like to use oil money earmarked for the public debt
to pay for social spending. Mr. Palacio, who does not
belong to a political party, also stressed his
independence."
[the reference to trade talks is apparently to the Andean
Free Trade Agreement, which the U.S. wants to complete
this year with Colombia, Ecuador, Bolivia, and Peru]
2) "Mr. Correa, an economist, has criticized Ecuador's
trade pacts, its deals with the International Monetary
Fund and its decision to replace its legal tender with the
dollar."
Ecuador's New Chief Picks Cabinet; Leftist in Economic
Post
By JUAN FORERO
New York Times
Published: April 22, 2005
QUITO, Ecuador, April 21 - A day after President Lucio
Gutiérrez was driven from power, his successor, Alfredo
Palacio, named a new cabinet on Thursday, including a
left-leaning economy minister likely to appeal to poor
Ecuadoreans, while working to gain legitimacy with
Washington and Ecuador's Latin American neighbors.
Mr. Gutiérrez, 48, who was voted out of office by Congress
on Wednesday and fled the presidential palace in a
helicopter, was granted asylum by Brazil, which on
Thursday evening was making arrangements to fly him out of
the Ecuadorean capital. The attorney general's office has
issued a warrant for Mr. Gutiérrez's arrest for the deaths
of two people killed this week in anti-government
demonstrations.
After days of violent street protests over what opponents
called Mr. Gutiérrez's illegal overhaul of the Supreme
Court, the capital was relatively quiet on Thursday. Most
Ecuadoreans, long accustomed to political tumult and
short-lived governments, returned to work. Still, despite
a freezing rain, small but loud groups of demonstrators,
fuming at the politicians they say do little other than
sack the country, called for Mr. Palacio, who had been Mr.
Gutiérrez's vice president, to resign.
"The reality is people are not happy," said Pedro Oscullo,
33, an artisan who protested outside the presidential
palace. "We wanted to get the president out but we wanted
a new president with new ideas. This is just the same old
political parties taking over."
In a country and region where sentiment against
market-driven reforms is strong, Mr. Palacio tried to cast
himself as a different leader.
Speaking to reporters on Wednesday and Thursday, he and
his economic minister, Rafael Correa, criticized his
predecessor's fiscal austerity measures and ties to
international lending institutions. Even before Mr.
Palacio took over as president, he had called it immoral
for a country to use 40 percent of its budget to service
its debt, and his new government may reconsider the
direction of trade talks now under way with the United
States. Mr. Palacio and his ministers have criticized the
government's fiscal responsibility law and have said they
would like to use oil money earmarked for the public debt
to pay for social spending. Mr. Palacio, who does not
belong to a political party, also stressed his
independence.
"I am no politician," said Mr. Palacio, 66, a cardiologist
who practiced in the United States in the 1970's. "I'm a
simple doctor."
Mr. Palacio, though, faces a host of obstacles in a
chronically unstable country that has a bitterly divided
Congress, a citizenry fed up with corrupt and inept
politicians and, for the moment, no functioning Supreme
Court. The new government has yet to obtain international
recognition, though political analysts expect it.
"He has a new Cabinet but it's unclear how much support he
has," said Fernando Bustamante, a political analyst at
San Francisco University in Quito. "And there are doubts
about his legitimacy, especially abroad."
Indeed, the United States has not recognized the new
government, and the Organization of American States has
declined to support Mr. Palacio's administration until it
explains how the change in government meets constitutional
standards.
Traveling in Lithuania, Secretary of State Condoleezza
Rice called for adherence to the rule of law and seemed to
suggest that early elections could help defuse tensions.
"There needs now to be a constitutional process to get to
elections," she told Fox News.
In a vote that raised questions among some diplomats
because it did not include the full 100-member Congress,
lawmakers voted 60 to 2 on Wednesday to remove Mr.
Gutiérrez from power. Ecuadorean lawmakers based their
vote on Wednesday on a clause in the Constitution
permitting the removal of a president for "abandonment" of
his post. They justified the measure by arguing that Mr.
Gutiérrez's efforts to control the Supreme Court violated
the law and went beyond the president's constitutionally
mandated powers.
Mr. Palacio, a former health minister from coastal
Guayaquil, Ecuador's economic engine, is virtually unknown
in the country. Joining Mr. Gutiérrez's 2002 campaign for
president
- when Mr. Gutiérrez cast himself as a
leftist man of the people - Mr. Palacio quickly broke
with him once he won office.
For many Ecuadoreans and politicians here, the big
question is whether Mr. Palacio can unite a divided
country behind his government while forming political
pacts with Ecuador's myriad parties.
Mr. Palacio's pledge to call a referendum in the next few
months, the first step toward a reform of the
Constitution, will win him some supporters. But the new
president's steps have already ruffled some feathers, like
the appointment of Mr. Correa as economic and finance
minister. Mr. Correa, an economist, has criticized
Ecuador's trade pacts, its deals with the International
Monetary Fund and its decision to replace its legal tender
with the dollar.
Carla D'Nan Bass contributed reporting from Quito for this
article
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