Big oil gets bad news in Ecuador
November 30, 2006
The Bush administration's streak of bad news in Latin America keeps on going.
On Nov. 26, the people of Ecuador went to the polls for a runoff vote and rejected a banana tycoon the U.S. government had favored. They instead elected economist Rafael Correa, who received 57 percent of the votes.
Correa's election is the latest sign that the United States should overhaul its policies toward an increasingly independent Latin America.
The conservative contender, millionaire businessman Alvaro Noboa, offered the same export-oriented economic policies that have succeeded in enriching oil companies but have failed to help the largely poor population.
President-elect Rafael Correa, by contrast, vowed to reject a one-size-fits-all free-trade agreement with the United States. And he pledged to renegotiate contracts with foreign oil companies to ensure that a greater share of the oil wealth goes into the national treasury.
With the Western hemisphere's fifth-largest oil reserves, Ecuador is an important source for the United States. It is the third-largest Latin American exporter of oil to American consumers, after Mexico and Venezuela.
Oil companies -- mostly foreign -- have enjoyed favorable terms for doing business in Ecuador for the last 30 years. At the short end of the stick have been the indigenous and "campesino" people, who bear the devastating local impacts of the oil industry but who receive little of the benefit.
More than half of Ecuador's population lives below the poverty line.
During his presidential campaign, Correa was openly critical of the corporate friendly free-market policies espoused by Washington in Latin America for the last two decades. He has promised to make other important changes in the country's economic system, especially in the oil sector.
Correa's attempt to exercise greater control over his country's profitable oil business is popular, as are similar efforts in other nations. Citizens in one country after another are rejecting the business as usual model in favor of a change in course.
From Mexico to Argentina, voters are giving right-wing candidates a run for their money, and more often than not, opting for the leader who can best offer them a break from Washington's bitter economic pills.
The Bush administration continues to push for open markets for U.S. companies, less government involvement in the provision of public services and other fiscally conservative policies that limit the ability of Latin American governments to fulfill the basic needs of their citizens.
For U.S. relations with Latin America to work, Congress will have to revamp our policies to accommodate the efforts of nascent governments that are following the mandates of their people.
One easy way to start is by encouraging American oil companies doing business in Ecuador to negotiate fairly with the new Correa administration so that average citizens there can begin to feel the benefits of their country's riches immediately.
A democratic government is one that responds to the wishes of its people. That, after all, is what America expects of its neighbors, and what those neighbors should expect of us.
Nadia Martinez was born and raised in Panama. She is co-director of the Sustainable Energy and Economy Network (SEEN), a project of the Institute for Policy Studies in Washington, D.C. She can be reached at pmproj@progressive.org.