Archive for the ‘Ecuador’ Category

Ecuador Will Deal With Oil’s Drop and Dollar’s Rise, President Correa Says

| February 25th, 2015 | No Comments »
Wall Street Journal WSJ-01

By MERCEDES ALVARO

QUITO, Ecuador—President Rafael Correa said Ecuador will implement measures to curb the economic impact of the drop in oil prices and the stronger U.S. dollar, two events that private-sector economists say will hurt growth this year.

“We are taking all measures needed to be prepared. A good economic policy is to make the country less vulnerable to these external factors,” Mr. Correa said during his weekly address broadcast on Saturday.

The price of Ecuadorean crude oil has fallen almost 56%, from $91 in January 2014 to about $40 a year later.

Lower oil prices are expected to drag down economic growth, analysts say, or a country whose oil sector generates about one-quarter of total government revenue and about a half of the country’s exports.

“Ecuador is leaving behind years of prosperity with strong oil prices, in which the state took a leading role in the economy,” said Alberto Acosta, an economist with private ... Read More

Migrants’ remittances to Latin America grew 4 pct. in 2014

| February 24th, 2015 | No Comments »
From Fox News Latino

Expatriates’ remittances to Latin America and the Caribbean increased 4 percent in 2014 to $62.3 billion, the biggest jump since the global economic crisis in 2009, the Inter-American Dialogue, a Washington think-tank, said Tuesday.

The largest gains went to Mexico and Central America, while several South American countries saw a decrease in remittances, due largely to the persistent economic crisis in Spain.

The overall advance in remittances to Latin America reflects improvements in the U.S. labor market, new migration patterns and the proliferation of new ways to transfer money, according to the report.

Remittances to Mexico increased 8.8 percent over 2013, while funds sent to Honduras increased 12.5 percent, and to Guatemala, 9 percent.

The Spanish economic crisis, with high levels of unemployment and falling pay, is largely responsible for decreases in remittances to Bolivia, 2.4 percent; Peru, 2.3 percent, and Colombia, which saw ... Read More

In Ecuador, a rapid decline in press freedom

| February 24th, 2015 | No Comments »
KBIA

BY JASON MCLURE

Many people know Ecuador as the home of calm and picturesque sights, from the Galapagos Islands and lush Amazonian rain forest to soaring Andean peaks.

But the media environment in Ecuador is not so serene. President Rafael Correa, now in his third term of office, regularly files lawsuits against journalists and even cartoonists who mock his government. In his weekly television address, Correa often spends time singling out his critics on social media and is known to tear up copies of newspapers he dislikes. In addition, a communications law passed in 2013 has given the government greater legal powers to fine and censure its critics in the press. Will the situation get worse?

Click here for original ... Read More

Latin America 2015 outlook darkens as commodities sink: poll

| February 13th, 2015 | No Comments »
Article originally appeared in Reuters

BY SILVIO CASCIONE

(Reuters) – Latin America has embarked on a painfully long period of greater austerity, and lower commodity prices and economic growth will barely pick up speed this year, a Reuters poll found Thursday.

With nose-diving oil and metal prices weighing on government finances and jeopardizing investments, economists in the quarterly poll chopped 2015 growth forecasts again for the region’s seven largest countries, from Mexico to Argentina.

Brazil is now expected to grow a meager 0.5 percent in 2015, down from an estimate of 1.1 percent in the prior survey and barely up from an expected 0.2 percent growth in 2014.

Mexico will probably expand by 3.4 percent, compared to 3.7 percent in the last poll, while oil producer Venezuela, flirting with a debt default, will probably contract 2.0 percent, according to the poll of about 50 economists.

Growth would probably improve somewhat in 2016, but would still fall short of the ... Read More

The retreat of U.S. interests from Latin America has left a vacuum for the Chinese to fill

| January 22nd, 2015 | No Comments »
Wall Street Journal WSJ-01 BY ILAN BERMAN You have to feel a bit sorry for the Obama administration. The White House in December announced plans to normalize diplomatic relations with Cuba, including establishing a U.S. Embassy in Havana and formally revisiting Cuba’s status as a state sponsor of terrorism. The move was a clear effort by Washington to distinguish itself in a new international theater.

But that gambit was soon eclipsed by another: In a meeting that could herald a significant shift in the Western Hemisphere’s balance of power, China hosted a high-profile summit earlier this month with the Community of Latin American and Caribbean States, or Celac.

Celac is a relatively recent invention. Conceived in 2010 at a meeting in Caracas hosted by Venezuelan strongman Hugo Chavez , it is designed to deepen integration among Central and South American states—while excluding the U.S. and Canada. The 33-member bloc explicitly styles itself as an alternative to the U.S.-led Organization of ... Read More

Is Ecuador’s president using U.S. law to censor critics?

| January 20th, 2015 | No Comments »
USA TODAY

By Simeon Tegel

LIMA, Peru — You might think that using United States laws to shut up social media opponents would be the last thing Rafael Correa would do.

A vocal adversary of Washington, Ecuador’s leftist president has also made a name for sheltering WikiLeaks’ Julian Assange in his country’s London Embassy, and briefly offering asylum to U.S. intelligence leaker Edward Snowden.

So, it might come as a surprise to learn that Ecuadoreans who dare to post content critical of Correa and his government on Twitter, YouTube and Facebook say they are finding their images and videos systematically targeted and taken down.

Even more unexpected is the justification being given time and again: the supposed violation of the Digital Millennium Copyright Act (DMCA), passed by Congress in 1998.

The law, intended to combat online piracy, holds Internet companies liable for copyright violations they host, however unwittingly. It also establishes a fast track “notice and takedown” process ... Read More

Race on the high seas: Cartels feature new, faster smuggling boats

| January 16th, 2015 | No Comments »
FoxNews.com

By Perry Chiaramonte

Latin America’s drug cartels are leaving the U.S. Coast Guard in their wake, with new and faster speedboats law enforcement officials say are virtually undetectable by radar.

The new boats, nicknamed “Picudas,” after a tropical fish whose long, thin bodies they resemble, are made of fiberglass, making them invisible to radar and efficient with fuel. While older smuggling vessels took as long as three days to make the trip from Costa Rica to Jamaica, the Picuda can make the trip in two.

Dialogo, a newspaper published by the Pentagon’s Southern Command, quoted one Coast Guard source that called the craft “a wave-breaking go-fast wonder that defies radar detection.” The boats give the bad guys a leg up on authorities trying to cut off the flow of South American drugs, according to the article.

“They [cartels] are being forced to do something that they would rather not,” Adam ... Read More

China Rescues Ecuador Budget From Deeper Cuts as Crude Drops

| January 14th, 2015 | No Comments »
Bloomberg

By Nathan Gill

Ecuador, an OPEC nation that relies on crude for about a quarter of revenue, obtained enough financing from China to avoid deeper budget cuts even as its oil price fell below $40 a barrel, Finance Minister Fausto Herrera said.

The Latin American country expects total financing needs for 2015 to rise to about $10.5 billion from a previous estimate of $8.81 billion, Herrera said today in an interview at his office in Quito. The government will use loans from China, multilateral lenders and the nation’s social security agency to help offset a drop in the price of crude, the nation’s biggest export, he said. The ministry isn’t planning to sell international bonds this year after global interest rates rose, he said.

Ecuador’s government announced last week that it would cut $1.42 billion of public spending on items such as new schools and police stations while ... Read More

Latin America 2015: Time for Reform

| January 13th, 2015 | No Comments »
Brookings

By Daniel Zovatto

Latin America is starting off 2015 with a clear economic slowdown. The United Nations Economic Commission for Latin America and the Caribbean (ECLAC) projects a modest recovery (2.2 per cent) with respect to last year (in 2014 growth was only 1.1 per cent, the lowest since the 2009 crisis), though these calculations may vary due to several factors.

The world economy is not helping. The downward trend in raw materials prices, scant dynamism in global demand, and the appreciation of the dollar are three factors that work against the region today.

Venezuela and Argentina, are facing very complex economic contexts. Venezuela is in the midst of stagflation (aggravated by plummeting oil prices); and Argentina is experiencing negative growth, high inflation, and the unresolved conflict with the “vulture funds.”

The two largest economies of the region, Brazil and Mexico, are facing their own demons. Brazil President Dilma ... Read More

Crude Collapse Seen Boosting China’s South American Clout

| January 9th, 2015 | No Comments »
Bloomberg

By Juan Pablo Spinetto and Anatoly Kurmanaev

The worst commodities rout in six years is opening the door for China to increase its influence in Latin America, home to the biggest oil reserves outside the Middle East.

China, with the world’s largest foreign reserves at almost $4 trillion, agreed to a combined $27.5 billion of funding and investment with Venezuela and Ecuador in separate deals announced by South American officials this week in a bid to shore up their battered finances.

As crude’s 50 percent nosedive erodes reserves and funding options of OPEC’s two Latin American members, China, the world’s largest importer of commodities from oil to soybeans, is taking the opportunity to secure more resources in exchange for credit. While details of the accords weren’t divulged, locking in more oil supply to China may reduce the amount the countries have available to sell on the open ... Read More

China steps in to support Venezuela, Ecuador as oil prices tumble

| January 8th, 2015 | No Comments »
Fortune

BY GEOFFREY SMITH

Xi eyes doubling of trade volumes within 10 years and promises $250 billion of investment to Latin America.

China stepped up its courtship of Latin American countries Thursday, promising to double trade with the region by 2025 and offering fresh loans to support left-wing governments in Venezuela and Ecuador.

At a meeting in Beijing with the Community of Latin American and Caribbean States, or CELAC, President Xi Jinping said that annual bilateral trade would rise to $500 billion over the next 10 years, and that China would invest some $250 billion in the region in that period.

That would threaten the U.S.’s traditional pre-eminence as the region’s biggest trading partner, inevitably diluting its political clout there.

However, it’s not clear quite how Xi arrived at his figures. Although trade and investment have rocketed in the last 20 years as China has sucked up natural ... Read More

Ecuador Gains $5.3 Billion Credit Line From China as Oil Tumbles

| January 7th, 2015 | No Comments »
Bloomberg

By Nathan Gill 

The Export-Import Bank of China granted Ecuador a $5.3 billion credit line after a slide in oil to an almost six-year low prompted spending cuts for the OPEC member.

Finance Minister Fausto Herrera said in a statement published today in the president’s official gazette that the Andean nation will use about $1.5 billion of the funds this year to finance public-work projects such as irrigation and transportation. The credit line will have a 30-year maturity and an interest rate of 2 percent, according to the statement.

President Rafael Correa, a 51-year-old former economics professor, traveled to China this week to ask for loans to help prop up public spending after the price of crude, Ecuador’s biggest export, plunged to its lowest level since April 2009. The government announced yesterday that it would cut the 2015 budget by $1.42 billion, or almost 4 percent, because of a decline in ... Read More

Ecuador feels pinch from lower oil as budget cut

| January 6th, 2015 | No Comments »
Financial Times

Another South American nation is feeling the pinch from the falling oil price.

Ecuador, the smallest member of production cartel Opec, has cut its budget for this year by 4 per cent to $34.9bn writes, Andres Schipani, Andes Correspondent.

Oil accounts for more than 50 per cent of exports in Ecuador, and the government has room to cut up to 15 per cent of the budget “to adjust to external shocks.”

The government’s original 2015 budget was based on an average oil price of $79.70 per barrel, which is now far higher than the price of West Texas Intermediate – the benchmark for Ecuador’s oil which trades at a discount because of its lower quality.

WTI fell below $50 a barrel on Monday and is now at its lowest level in five and a half years.

The government is trimming $840m in future investment and $580m in current spending, but finance minister Fausto Herrera stressed the cuts would ... Read More

Ecuador Moves to Block Disclosure of U.S. Propaganda Activities

| December 15th, 2014 | No Comments »
The Washington Free Beacon

By  Lachlan Markay

The government of Ecuador is attempting to prevent the release of information related to its contract with a New York-based public relations firm that may have violated federal law and is under investigation in the South American nation.

A federal judge in New York last week ordered the firm, MCSquared PR, to turn over documents related to its work for the government.

The order came as part of an ongoing legal action brought by Chevron against the financiers of a number of attorneys that won a $9 billion judgment against the company for environmental contamination in the Ecuadorian Amazon.

Chevron has alleged a widespread campaign of fraud, extortion, and bribery by plaintiffs’ attorneys in that case, and brought a racketeering suit against them in U.S. courts. They also brought a suit against a Gibraltar-based investment firm that financed the plaintiffs’ efforts.

As part of the ... Read More

Oil price plunge means survival of fittest

| December 10th, 2014 | No Comments »
Financial Times

By Anjli Raval

The 40 per cent plunge in the price of oil over the past six months is testing the mettle of the world’s biggest producers, from Venezuela to Iran and Russia. But it is also a survival of the fittest at a more granular level — among the world’s megaprojects.

Energy Aspects, a London-based consultancy, estimates that more than 12 per cent of global oil production would be uneconomic if the majors were to give the go-ahead to existing projects at today’s prices.

Most at risk are those in the Canadian oil sands which has a break-even price of $80 a barrel, US shale plays and other areas of tight oil ($76). Brazil’s deepwater fields ($75) and Mexican projects (around $70) are also vulnerable.

None of this looks pretty, particularly as most new production scheduled to come on line in the next couple of years is set to come ... Read More

Oil Rout Signals Budget Cuts or More Debt for Ecuador

| December 10th, 2014 | No Comments »
Bloomberg

By Nathan Gill

Crude’s slump to five-year lows means OPEC member Ecuador is facing the choice of spending cuts that risk crimping growth or taking on more debt to finance outlays, Jefferies LLC said.

Ecuador, which defaulted on $3.2 billion of its foreign debt in 2008 after crude tumbled 58 percent, will lose an additional $2.5 billion in oil revenue next year if prices remain at current levels and may need to double the amount of cash it seeks from capital markets to $4 billion, according to Siobhan Morden, head of Latin America strategy at Jefferies.

With crude prices down more than 20 percent since the government sent Congress its 2015 budget on Nov. 1, President Rafael Correa has said he plans to cut funds for new schools and police stations before sacrificing spending on oilfields needed to generate revenue. Correa, who has criticized former presidents for cutting social spending and taking on too much ... Read More

Japan’s profile rises in the Americas

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

BY MIMI WHITEFIELD

As Asian rival China invests billions in Latin America and snaps up strategic commodities, Japan also is looking at the region with new interest.

Shortly after Chinese President Xi Jinping’s Latin American tour in July, Prime Minister Shinzo Abe made a 10-day, five-nation swing through Latin America and the Caribbean.

His trips to Mexico and Brazil were the first bilateral visits by a Japanese prime minister in a decade, and his trip to Chile was the first such visit by a Japanese prime minister since 1996. Abe’s stop-over in Port of Spain marked the first time that a Japanese prime minister had ever visited the twin-island nation of Trinidad and Tobago, and his trip to Colombia also was the first official visit for a Japanese prime minister.

In September, Abe also held a summit with Panamanian President Juan Carlos Varela while both were attending the U.N. General Assembly and they discussed ... Read More

Latin America, Caribbean 2014 Growth Likely Reached Only 1.1%

| December 2nd, 2014 | No Comments »
Wall Street Journal WSJ-01 By ROBERT KOZAK Growth in Latin America and the Caribbean likely reached only 1.1% this year, the slowest rate of expansion since 2009, but will jump back up to twice as high next year, the United Nations Economic Commission for Latin America and the Caribbean said.

The organization, known as Eclac, said Tuesday that Central America, including the Spanish-speaking Caribbean and Haiti, will post the best expansion in gross domestic product in the region next year, rising by 4.1%. The English-speaking Caribbean will lag with an expansion of 2.2%. South America will expand 1.8% next year, it added. Overall the area will expand 2.2% in 2015, it said.

A slump in demand in developed economies and the slowing of growth in emerging economies, especially China, hit Latin America and the Caribbean nations hard this year. China has become an important trading partner, especially for raw materials, for many countries in the region.

The agency said an economic deceleration became ... Read More

Chevron Takes Ecuador’s Government to Court

| December 1st, 2014 | No Comments »
Wall Street Journal WSJ-01 By MARY ANASTASIA O’GRADY New York federal judge Stephen Kaplan ruled last week that Chevron may “conduct discovery” regarding a $6.4 million contract between the government of Ecuador and MCSquared, a Brooklyn, N.Y., public-relations firm. Score another victory for the oil company over plaintiffs seeking to blame it for environmental damage in the Ecuadorean jungle. MCSquared “likely possesses evidence relating to the coordination between the Republic of Ecuador and the plaintiffs behind the fraudulent lawsuit,” Chevron said in a statement on Nov. 24. The company is attempting to scrutinize Ecuador’s role in what increasingly looks like a corporate shakedown. But Chevron isn’t the only potential beneficiary of what might come to light. Ecuadoreans who live powerlessly under a repressive, secretive regime that bills itself as democratic will also be better informed. No opposition member of the national assembly has access to public contracts under Ecuadorean President Rafael Correa. Requests for such information are batted away by the ... Read More

Ecuador: Can President Correa’s popularity keep him in office indefinitely?

| November 25th, 2014 | No Comments »
Article originally appeared in The Christian Science Monitor

By Ruxandra Guidi

QUITO, ECUADOR — A meme circulating on social media features a portrait of Ecuador’s controversial president, Rafael Correa, winking at the camera. The image is split down the middle, with one half reading “before“ and the other “after.“

In the before section, he’s quoted in November 2007, soon after he was first elected, saying, “indefinite reelections are absurd, because democracy requires a rotation in leadership.”

But on the “after” side is a quote from a speech he gave in June 2014: “Rotation of leadership is a bourgeois discourse that no one believes anymore. It’s a myth.”

A recent vote from Ecuador’s Constitutional Court partially cleared Correa’s path for indefinite reelection, and it appears he’s poised to stay in power beyond 2016. The National Assembly has until October 2015 to decide whether the issue should go up for a vote, or whether it can be resolved through a constitutional amendment ... Read More

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