Archive for the ‘Ecuador’ Category

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

Ecuador Weighs Escape From Dollar ‘Straitjacket’

| July 24th, 2014 | No Comments »


Ecuador, one of only eight countries to adopt the U.S. dollar as its official currency, is poised to create its own parallel currency for use in local transactions as the government struggles to meet spending commitments.

Congress has until the end of today to vote on President Rafael Correa’s proposal to change the South American nation’s financial laws, which would allow payments in “electronic money.” Lawmakers are debating whether to insist the central bank back the new currency with a one-to-one dollar guarantee.

As a current-account deficit drains dollars from the economy, making it harder for Correa to fund a burgeoning budget gap, a new currency could be used to meet government payments, said Jaime Carrera, a former deputy finance minister and director of the Quito-based Fiscal Policy Observatory. It could also lose its value quickly if not backed by the central bank, he said.

“It’s still not clear in the monetary law if each electronic ... Read More

Citizens’ security is Latin America’s biggest problem

| July 14th, 2014 | No Comments »
The Economist

PEDRO RODRÍGUEZ, head of Nicaragua’s youth-affairs police, grabs the shoulder of 17-year-old Axel Matus and gives it a shake. “He was one of our worst cases,” he says. In most of Latin America, a youth with Axel’s background—gangs, drugs, knife-fights, joblessness—would cringe at such attention from a burly police commander. But Axel stands bolt upright and admits: “My life was utter chaos.”

Not any more. Axel now attends the Juvenile Affairs police headquarters in Managua, where he is given free meals and tuition every day. Besides subjects like maths and English, he is learning how to be a barber (his blade skills now applied with scissors). Hundreds of troubled kids voluntarily study with him, and the police chief knows most of them by name. They are neatly dressed and ooze self-esteem.

Nicaragua’s police force is in danger of giving socialism a good name. The country is one of the poorest in the ... Read More

Ecuador Says China Signed $2 Billion Oil Deal to Access Crude

| July 7th, 2014 | No Comments »

By Nathan Gill

Ecuador’s state oil company got $2 billion of financing from China backed by future crude supplies, adding to funding the country has obtained this year by tapping the bond market and taking a loan from Goldman Sachs Group Inc.

The OPEC-member country disclosed the China deal in an offering circular to bond investors last month. Under the May agreement, Unipec Asia Co., a unit of China Petroleum and Chemical Corporation, known as Sinopec, prepaid for oil from PetroEcuador over an unspecified timeframe.

President Rafael Correa, who more than tripled public spending since taking office in 2007, had said the government was seeking additional financing sources from China, the world’s biggest oil consumer after the U.S. Ecuador has borrowed more than $11 billion from the Asian nation in the past five years.

The Andean country’s $2 billion bond sale last month was its first offering in international debt markets since a default in 2008. In ... Read More

Ecuador’s President may seek ultimate job security: indefinite reelection

| July 7th, 2014 | No Comments »
The Miami Herald

By Jim Wyss

Franklin D. Roosevelt had it, so did Venezuela’s Hugo Chávez and so does Nicaragua’s Daniel Ortega. Could Ecuador’s Rafael Correa be the next president to win the right to consecutive and indefinite reelection?

That’s the question the country’s constitutional court is debating, and the answer could radically change the future of this Andean nation of 16 million.

After years of vowing that he wouldn’t seek office when his term ends in 2017, Correa recently announced that his Alianza País political party would push for a constitutional amendment that would open the gates for the charismatic socialist to keep his job permanently.

Stung by recent municipal elections where his party lost key cities, including the capital, Correa said the change is needed to preserve the advances of his “Citizens’ Revolution.”

“My sincere position was always against reelection,” he told the country recently, “but after deep reflection, and knowing that sometimes our choices are ... Read More

Ecuador ruling party proposes end to presidential two-term limit

| June 27th, 2014 | No Comments »
Article originally appeared in Reuters

BY ALEXANDRA VALENCIA Ecuador’s ruling political movement presented to the national assembly on Wednesday on a controversial plan to end a two-term limit for the re-election of the president, give new powers to the military and increase oversight of the country’s media.

The opposition has fiercely criticized the proposed package of at least 17 reforms to the 2008 constitution with possibly more to follow, which the ruling Alianza Pais (AP) presented to the national assembly where it has a majority.

“All of us AP assembly members have decided to present this initiative,” Marcela Aguinaga, the assembly’s vice-president told reporters.

The proposals will require approval by the Constitutional Court before legislators can begin to discuss the proposals.

The Alianza Pais’ proposal aims to enable President Rafael Correa to seek re-election in 2017 when his second five-year mandate expires, and give him more time to implement his broadly supported socialist program.

Correa has brushed off criticism that ... Read More

Remittances to Latin America and the Caribbean in 2013 still not back to pre-global-crisis levels

| June 11th, 2014 | No Comments »
The Miami Herald

By Mimi Whitefield

A study released Tuesday shows that the money sent home by migrants from Latin American and the Caribbean reached $61.3 billion last year, with three-quarters of those remittances coming from the United States.

The report by the Multilateral Investment Fund, a member of the Inter-American Development Bank Group, found that remittances to the Caribbean and Central America increased, but money flows to Mexico, which received $21.6 billion in remittances, and South America were down.

Overall, remittances — considered an economic lifeline for many families in the region — still haven’t recovered to the levels before the 2008-2009 global economic crisis. Remittances reached a high of $64.9 billion in 2008 before plummeting by more than 10 percent the next year.

Remittances began to grow again in 2011 but have remained fairly flat since then. There was virtually no growth between 2012 and 2013

The strengthening of the economies of European nations and the ... Read More

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