Archive for the ‘Ecuador’ Category

Peter Foster: The limits of Ecuador’s shakedown statism

| October 25th, 2014 | No Comments »
Financial Post

By Peter Foster

The great eighteenth century lexicographer and wit Samuel Johnson described second marriage as the “triumph of hope over experience.” How then might one characterize the tendency of Canadian mining companies to return again and again to the altar of commerce with foreign government partners who recall Glenn Close in Fatal Attraction?

This week, Vancouver-based Lundin Group confirmed that a subsidiary would take over the Fruta del Norte prospect in Ecuador from Toronto-based Kinross Gold Corporation for US$240 million. Ecuador is run by the left-wing caudillo windbag Rafael Correa, whose hero was Hugo Chavez, the man who turned oil-rich Venezuela into a basket case.

Mr. Correa’s  preferred mode of money-raising is the shakedown. The two most spectacular examples in recent years have been an attempt, via the “Yasuni Initiative,” to blackmail the rest of the world into putting up US$3.6 billion in return for Mr. Correa (italics) not (close italics) drilling ... Read More

Rising Dragon? The Chinese Mafia Threat in Latin America

| October 16th, 2014 | No Comments »
From In Sight

By David Gagne

Chinese mafia operations in Latin America are little understood, but a recent report on these groups in Argentina illustrates how they make their presence felt via extortion, human smuggling rings, and the occasional murder. As China deepens its economic relationship with Latin America, it’s possible these mafias may become ever more prominent.

Authorities in Argentina have attributed 31 murders over the last five years, and four in 2014 alone, to seven Chinese mafias operating in the country, reported La Nacion. These mafias reportedly earn revenue by extorting businesses within the Chinese community, and resort to violence when owners do not comply with their demands.

In at least three of the 2014 cases, the victim did not appear to have been robbed, leading authorities to believe they were killed after running afoul of criminal groups in the Chinese community. According to La Nacion, the Chinese mafias (also known ... Read More

El legado de Insulza y el futuro de la OEA

| October 8th, 2014 | No Comments »
El Pais


Corría Febrero del año 2011. Un grupo de estudiantes en Venezuela había decidido iniciar una huelga de hambre en protesta contra el gobierno de Hugo Chávez. En Washington, junto con un grupo de estudiantes venezolanos, decidimos apoyar la protesta pidiendo un pronunciamiento de la Organización de Estados Americanos (OEA). Lo hicimos a través de decenas de cartas dirigidas a cada uno de los embajadores, notas de prensa, y una protesta frente al Edificio principal del organismo, previo a una sesión de su consejo Perrmanente.

Terminada esta sesión, el secretario general José Miguel Insulza nos otorgó una audiencia privada, en la que nos dijo: “Me compadezco con ustedes, yo también sufrí una dictadura en carne propia y tuve que refugiarme en el exterior. Pero tienen que entender, a Chávez no lo van a vencer con cartas, Chávez es un dictador, y en Venezuela hay una dictadura militar”.

Esta anécdota sirve para describir el ... Read More

Latin American Growth to Slow, World Bank Says

| October 8th, 2014 | No Comments »
Wall Street Journal WSJ-01 By RYAN DUBE LIMA, Peru—Latin America is on track this year to post its slowest rate of annual growth since 2009, when the global financial crisis began to be felt in the region, the World Bank said Tuesday.

The bank cut its growth forecast for the region by nearly half to 1.2%, following expansions of 2.4% and 3% in the previous two years. In its semiannual report on Latin America and the Caribbean, the World Bank said the region could grow 2.2% next year, but cautioned that it was still unclear whether the current downward cycle has bottomed out.

“We do not know if this deceleration has hit bottom, or if there is further deceleration to come,” said Augusto de la Torre, the World Bank’s chief economist for Latin America, in a telephone interview. But growth, he said, “is not going to be what it used to be in the past decade, partially because ... Read More

Summit missing a strong agenda

| October 8th, 2014 | No Comments »
The Miami Herald


With the ink not yet dry on the invitations, the April 2015 Summit of the Americas is perilously close to failure.

Failure rooted in the simple fact that a summit must be about more than its invite list.

And to date, summit host Panama and leaders across the Americas have done little to prepare other than obsessing about inviting Cuba and waiting to see how Washington responds.

That is not the basis for a mature, modern relationship, and it can’t make for anything but a missed opportunity in Panama.

This is particularly true when one considers the enormous shared opportunities and challenges that stand before the hemisphere and President Obama’s commitment to working as a good partner in the Americas.

From tackling the plague of violence in the Americas; to making good on energy and climate cooperation championed by President Obama at the ... Read More

Ecuador is freeing thousands of drug mules

| October 6th, 2014 | No Comments »
Global Post


LIMA, Peru — In Latin America’s latest challenge to Washington’s “war on drugs,” Ecuador has quietly begun releasing thousands of convicted cocaine smugglers.

The move is a result of the country’s new criminal law, which took effect Aug. 10. It treats “drug mules” who commit the low-profit, high-risk offense more as vulnerable people exploited by cartels than as hardened criminals.

The reform retroactively applies heavily reduced jail sentences to those already convicted of attempting to transport relatively small amounts of drugs — often hidden dangerously inside their own bodies — out of the Latin American country.

Around 500 mules have already been freed and at least another 2,000 are expected to follow, says Jorge Paladines, national coordinator of the Public Defender’s Office. The sentence reduction is not automatic and can only happen after a court hearing, which the prisoner has to request.

“There ... Read More

After More Than 50 Years, USAID Is Leaving Ecuador

| October 1st, 2014 | No Comments »

By John Otis

BOGOTA, Colombia — Under pressure from Ecuador’s left-wing government, the United States Agency for International Development (USAID) is shutting down its operations in the South American nation after 53 years.

In a telephone interview with GlobalPost, Adam Namm, the US ambassador to Ecuador, called the decision “very disappointing.”

But it was no surprise. The government in Quito had refused to allow Washington’s aid agency to renew its programs or start any new activity in the country.

President Rafael Correa is a fierce US critic who has already pulled the plug on US counter-narcotics operations at a Pacific coast base and expelled Namm’s predecessor as well as 14 US military advisers, whom he claimed were infiltrating Ecuador’s security forces.

Analysts say that the closure of the Agency for International Development, the US government foreign aid wing known as USAID, is part of a broader effort ... Read More

Was North Carolina Used as an Ecuadorean Money-Laundering Hub?

| September 26th, 2014 | No Comments »
The Huffington Post

By Ezequiel Vazquez-Ger

What happens when an Argentine businessman and Ecuador’s central bank chief select Newton, population 13,000, just outside Hickory, North Carolina, for their financial transactions?

Certainly not business as usual. And why is that? The story begins in December 2011 when Argentine businessman Gaston Duzac touched down in Ecuador to collect a highly irregular $800,000 loan from a local state-owned bank called Cofiec. The stated intent of this credit line was to create a so-called “mobile payment” system. At the time, an Ecuador public trust called Fideicomiso AGD managed hundreds of firms seized by the Ecuadorean government, including the Cofiec Bank. This public trust was presided by Pedro Delgado, who was also Ecuador’s central bank chief and cousin to President Rafael Correa.

The existence of the irregular credit came to light in Ecuador by mid-2012, spurring a swirl of controversy in Quito.

Not least of which was the controversial discovery that Iran made suspicious cash deposits ... Read More

Chevron sues another funder of Ecuadorian litigation

| September 25th, 2014 | No Comments »


The oil giant has sued Woodsford, a litigation funder, for investing in the allegedly fraud-tainted Ecuadorian environmental suit against it.

Chevron has sued Woodsford Litigation Funding Ltd. for financing the lawyers who are trying to enforce a $9.5 billion environmental judgment against the oil giant that was obtained in Lago Agrio, Ecuador, in 2011.

Chevron  CVX -0.62%  contends—and, last March, a federal judge in Manhattan held—that the judgment was procured by fraud, bribery, and many other crimes.

Chevron’s suit against the funder—filed in Gibraltar last June, but not previously reported—alleges that Woodsford conspired with the leaders of the Ecuadorian litigation to advance “a dishonest and fraudulent prosecution of a claim” against the company. The allegedly fraudulent claim in question is the one that led to the billion-dollar judgment, which purports to compensate residents of the Ecuadorian Amazon for contamination left behind by Texaco, after it drilled for oil there from 1964 ... Read More

Ecuador’s Dollarization Architect Doubts Correa’s Pledge

| September 16th, 2014 | No Comments »

By Nathan Gill

Ecuador President Rafael Correa, a critic of his nation’s use of the U.S. dollar as its official currency, is now creating a government-backed digital tender. One of the intellectual architects of the nation’s switch to the greenback 14 years ago sees a red flag.

With the country facing a record budget shortfall, a new currency may undermine confidence in the monetary system, said Steve Hanke, a professor of applied economics at Johns Hopkins University, who advised Ecuador on adopting the dollar in the late 1990s and early 2000s. His concerns were echoed by Ruth Arregui, a former general manager at the central bank, and the University of Georgia’s Myriam Quispe-Agnoli, who wrote about dollarization as an economist at the Federal Reserve Bank of Atlanta.

While government officials say there’s no plan to replace the dollar as the official tender and the virtual currency will help expand mobile-banking services in rural ... Read More

Ecuador economic “miracle” meets maturity

| September 12th, 2014 | No Comments »
Article originally appeared in Reuters

By Rob Cox

Turn on state television here, and within an hour or so a public service message will appear extolling the “Ecuadorean miracle” of President Rafael Correa. The advertisements highlight big new infrastructure projects and endorsements by experts, even an American or two.

Coming on one of the many formerly private channels that Correa tucked under government control during his seven years in office, it’s easy to dismiss this as propaganda. Yet here’s the thing: nearly every ordinary Ecuadorean I met during a recent stay was able to answer the Reaganesque question, “Are you better off now?” in the resounding affirmative.

To the amazement of Correa’s critics, Ecuador has undergone a relatively sustained period of economic progress since he took office in 2007. Annual growth in gross domestic product has averaged 4 percent. Unemployment is below 5 percent. Wages are up. Inflation is a tame 3.1 percent thanks to the dollarization of ... Read More

Miami conference: Better roads to improved ports creates business opportunities in Latin America

| September 4th, 2014 | No Comments »
The Miami Herald

Some 450 government and business leaders from 28 countries have gathered for the two-day Trade Americas & ConnectAmericas Expo — an opportunity to explore ways to bridge Latin America’s infrastructure gap.

But speakers at the conference, which was organized by the Inter-American Development Bank and Latin Trade Group, said that with growing populations — the region is expected to have 700 million people by 2030, more people moving into the middle class and globalization, most countries’ infrastructure is woefully inadequate.

Relatively brisk economic growth in Latin America in recent years also has “revealed the need to improve infrastructure,” said Bernardo Guillamon, the IDB’s manager of outreach and partnerships.

Even ... Read More

“Al Gobierno la cocaína le sale por los oídos”

| September 2nd, 2014 | No Comments »
Peru 21

“Lo que (Correa) me hizo a mí se lo fue haciendo a mucha gente y medios de comunicación, con lo cual hoy en día no hay libertad de expresión. Hay cosas de las que no se pueden hablar ni tocar”.

Por Mijail Palacios Yábar

Emilio Palacio es quizás el periodista ecuatoriano más crítico del presidente Rafael Correa. Tanto que tuvo que exiliarse y últimamente se ‘ganó’ una amenaza del mandatario, quien preguntó públicamente si no daban ganas de patearlo. Conversamos con el comunicador desde su exilio, en Miami, y aseguró que el narcotráfico está metido en ese Gobierno.

¿Por qué dejó Ecuador? Llegué a Miami hace tres años. El presidente de Ecuador aseguró que el 30 de setiembre de 2010 hubo un intento de golpe y asesinato en su contra, y yo sostuve que eso era mentira en varios artículos y a raíz de uno que se llamó “No a ... Read More

Ecuador Bonds Soar to Record as China Credit Line Renewal Sought

| August 29th, 2014 | No Comments »

By Andrea Jaramillo and Nathan Gill

Ecuador’s dollar bonds surged, sending yields to a record low, after the government said it’s in talks with China to renew a $1.5 billion credit line to help finance next year’s budget.

The South American nation’s dollar bonds due 2024 jumped 2.92 cents to 107.76 cents per dollar at 10:45 a.m. in New York. The yield dropped 40 basis points, or 0.4 percentage point, to 6.85 percent.

Ecuador, faced with the highest borrowing costs in South America after Venezuela and Argentina, has relied on Chinese lending to help cover swelling budget deficits since defaulting on $3.2 billion of its foreign debt almost six years ago. Finance Minister Fausto Herrera met with officials from China Development Bank Corp. on Aug. 22 in Quito to review investment projects financed by the bank and discuss the renewal of the credit line, the Finance Ministry said yesterday.

... Read More

Ecuador’s unhealthy dependence on China is about to get $1.5 billion worse

| August 29th, 2014 | No Comments »

Ecuador, the serial defaulter that had to ship half of its gold reserves to New York this year for a loan from Goldman Sachs, is asking Beijing about borrowing $1.5 billion more. According to the Andean nation’s finance minister yesterday, the government is in talks to re-open a credit line with China, a deal that adds to what critics say is the country’s unhealthy, growing dependency on its Asian partner.

Ecuador has borrowed over $11 billion from China since 2008, when the South American country defaulted on $3.2 billion of foreign debt. Last year, Chinese money helped cover as much as 61% of the government’s financing needs. In exchange, China has claimed as much as 90% of the country’s oil shipments over the next few years, most of which it thentrades around the world. (Ecuador is home to South America’s third-largest oil reserves.) China has become Ecuador’s second-largest foreign investor, investing mostly in mining and quarrying sectors: Reuters

... Read More

Ecuador’s game with Assange and free speech

| August 20th, 2014 | No Comments »

WikiLeaks founder Julian Assange created some confusion when he announced that he wanted to leave the Ecuadorian Embassy in London after two years. His statement has revealed Quito’s tense relationship with free speech.

“Ecuador’s government hasn’t got a thing to do with the Assange case,” said Winfried Weck, head of the Konrad Adenauer Foundation’s office in Ecuador’s capital, Quito. “It’s all about posturing and showing the US and the Europeans that they won’t allow meddling, and that they view their national identity and sovereignty as their biggest asset.”

At the beginning of September, Weck plans to shut down the foundation’s office in Ecuador after more than 50 years. The reason: Since 2011, Ecuador has reserved the right not only to examine political foundations and NGOs’ annual plans but also to change them.

“That was a condition we could no longer accept,” said Weck. “We’re ... Read More

Ecuador President Rafael Correa Seeks Law Allowing Perpetual Re-Election

| August 19th, 2014 | No Comments »
Wall Street Journal WSJ-01


President Rafael Correa, in speeches and televised interviews, assures followers he’d like nothing more than to step aside when his current term ends. “The easiest thing would be for me to retire in 2017 as one of the best presidents in our history, as the people refer to me,” he said in a recent televised interview.

But Mr. Correa, whom opponents characterize as a semi-authoritarian leader who controls all levers of power, has other plans. Ecuador’s Constitutional Court, whose judges are allied with the president, is now deliberating a proposal by the ruling Alianza Pais Party to permit indefinite re-election for every office-holder. The justices are expected in the days ahead to forward the proposal on to Congress, where Alianza Pais has a strong majority and is expected to pass the new law sometime next year.

Still popular after seven years in office, Mr. Correa, who is ... Read More

Julian Assange speaks of ‘leaving’ Ecuador embassy

| August 18th, 2014 | No Comments »

Wikileaks founder Julian Assange has suggested he will be leaving London’s Ecuadorean embassy “soon”.

He said he understood from Wikileaks spokesman Kristinn Hrafnsson he would be “leaving the embassy” after two years’ refuge but gave no more details.

Mr Assange is wanted for questioning over alleged sex assaults in Sweden and faces arrest if he leaves the embassy.

Mr Hrafnsson later said the plan “as always” was for Mr Assange to depart when the UK “calls off the siege”.

“The world is not coming to an end,” Mr Hrafnsson told reporters inside the embassy.

“The plan, as always, is to leave as soon as the UK government decides to honour its obligations in relation to international agreements.”

Mr Assange, 43, faces questioning by prosecutors in Stockholm over claims made by two women in 2010. He denies the allegations and sought refuge in the Ecuadorean embassy in June 2012 shortly after the UK’s ... Read More

Menor demanda externa reduce crecimiento de América Latina

| August 5th, 2014 | No Comments »
El Nuevo Herald


SANTIAGO – La menor demanda externa de materias primas por parte de los socios de América Latina y el Caribe, principalmente China, llevó a Cepal a reducir su estimación del crecimiento de la región de 2.7% a 2.2% en el 2014.

A la menor demanda externa se suma “un bajo dinamismo de la demanda interna, insuficiente inversión y un limitado espacio para la implementación de políticas que impulsen la reactivación”, sostuvo la Comisión Económica para América Latina y el Caribe (Cepal) en un informe económico presentado este lunes.

El menor crecimiento de China es “el principal riesgo” en lo que queda de año para los países de la región exportadores de materias primas.

En tanto, el crecimiento de Europa y Japón, otros importantes socios comerciales de Latinoamérica, caerá de 0.5% a 0.2% y de 1.7% a 1.4% respectivamente, lo que también significará una menor demanda de las ... Read More

Correa impone polémica ley financiera para blindar a Ecuador ante crisis

| July 25th, 2014 | No Comments »
La Patilla

El presidente de Ecuador, Rafael Correa, impuso una polémica ley de control financiero, decidido a blindar a Ecuador de una crisis bancaria como la de 1999, que dejó pérdidas millonarias al Estado y aún traumatiza a los ecuatorianos. AFP

El Congreso -de mayoría oficialista- aprobó el jueves el Código Orgánico Monetario y Financiero, que crea una junta reguladora controlada por el Ejecutivo con amplios poderes para supervisar todo el sistema financiero, el mercado de valores, de cambios y de seguros.

El organismo corregirá la “dispersión de distintas entidades haciendo lo mismo. El sistema necesita regulación”, explicó el vicepresidente Jorge Glass en declaraciones al canal RTS el jueves.

Glass negó que la junta, que direccionará los créditos y tendrá facultades para el uso de un millonario fondo de liquidez de los bancos, permita al gobierno decidir a quién deben prestar los bancos, como aseguran los opositores.

Con el texto, aprobado con el voto de 91 ... Read More

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