Ecuador Bows to US and IMF, Entering New Neoliberal Era – by Elliott Gabriel (MINT PRESS)


The warmth displayed by authorities over the past month to visiting U.S. Vice President Mike Pence and the IMF, respectively, further proves that Ecuador is melting back into the arms of international financial interests.

Nos llegan fotos de como reciben las calles de Quito al vicepresidente de EEUU, mientras el gobierno ecuatoriano pliega…

Posted by Desborde – Ecuador on Wednesday, June 27, 2018


Global financial profits over people

Pence’s visit to Quito coincided with the first major IMF Article IV visit to the country in years, where a team held over two weeks of discussions with the government over how far the government would be willing to go to secure IMF loans.

The IMF report on the consultations enthusiastically discusses the re-establishment of “a competitive private-sector driven economy,” a far cry from the original sentiment of the Citizens’ Revolution – “Another World Is Possible” – that boosted Moreno into prominence. The IMF team praised the Productive Development Law, as well as moves made to introduce “flexibility” to the labor market – a euphemism for the weakening of the labor code to favor employers – tackle corruption, and broaden trade agreements like the anticipated free trade-agreement to be entered into with Washington later this year.

A report by JP Morgan released earlier this month offers a no-nonsense analysis of the government’s “complicated dance” to reintroduce conformity with IMF diktat back to the country’s ruling political culture, given the awareness of Ecuadorian social movement toward the devastation it would bring.

The report notes:

Moreno’s sense of political strength is a relevant variable for his ultimate decision to sign off on any recommendation to embrace a Fund program. A current court case against ex-President Correa for allegedly directing a 2012 kidnapping of a political opponent could impede Moreno’s chief political opponent from coming back to Ecuador from his current location in Belgium, and also weaken the Correista block in the National Assembly.

While Moreno would likely have to work hard to build a congressional coalition to pass any hypothetical additional IMF conditionality, we think the center-right opposition could be brought on board, especially as Moreno has no intention of running for reelection, and for now there is no heir apparent from the center-left. Meanwhile, the government has been portraying the Pence [visit] as a foreign policy victory and a sign of strong international backing for the Moreno administration. Aside from security and trade issues, the visit is likely to help secure key support from Washington in any future multilateral assistance program.”

But such “multilateral assistance,” whether it be from the IMF or the World Bank, will come at a great cost and will likely give a bigger boost to social inequality and environmental degradation than it will to the long-term financial health of Ecuador.

This would be disastrous for the people of the region, potentially leading to new waves of mass migration from the south to the north – another aspect of neoliberal globalization’s model for maximizing profit from poorly-paid labor.

As author and political economy professor John Smith wrote in Imperialism in the Twenty-First Century (2016):

By uprooting hundreds of millions of workers and farmers in southern nations from their ties to the land and their jobs in protected national industries, neoliberal capitalism has accelerated the expansion of a vast pool of super-exploitable labor. Suppression of labor mobility has interacted with this hugely increased supply to produce a dramatic widening of international wage differentials, which, according to World Bank researchers, ‘exceed any other form of border-induced price gap by an order of magnitude or more.’”

Ecuador is currently witnessing a rapid transformation from a proud, sovereign nation with progressive social and macroeconomic policies to a debtor nation ruled by a cunning technocrat whose government may well reduce investments in education, health care, food, energy and social programs back to pre-Correa levels. Government ministries could rapidly be dissolved, while public assets are in danger of being privatized.

As is the case in other parts of the Global South, the people of the Andes are facing a major offensive by U.S. imperialism and U.S.-aligned transnational elites. The fight against neoliberalism may not have found more than a glimpse of a “New Dawn” in the states, trade blocs, and alliances of “21st-century socialism” — but by no means does this signal that those who freed themselves from poverty, illiteracy and maldevelopment over the past years will allow themselves to be dragged once again into the long, dark night without putting up a fight.

Top Photo | Ecuador’s President Lenin Moreno, right, shakes hand with U.S. Vice President Mike Pence at the government palace in Quito, Ecuador, June 28, 2018. Dolores Ochoa | AP

Elliott Gabriel is a former staff writer for teleSUR English and a MintPress News contributor based in Quito, Ecuador. He has taken extensive part in advocacy and organizing in the pro-labor, migrant justice and police accountability movements of Southern California and the state’s Central Coast.

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