Archive for the ‘Ecuador’ Category

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

Ecuador Prepares to Return to Bond Market

| June 9th, 2014 | No Comments »
Article originally appeared in the Wall Street Journal

Country to Meet Investors in London, Boston, Los Angeles and New York


The Republic of Ecuador is preparing to return to the bond market for the first time since the country defaulted in 2008, taking advantage of robust demand for emerging-market debt in a low-yielding world.

The default-prone sovereign, rated Caa1 by Moody’s Investors Service and B by both Standard & Poor’s and Fitch Ratings, is due to meet investors in London, Boston, Los Angeles and New York, via a three-day roadshow hosted by Credit Suisse CSGN.VX +1.74% and Citigroup C +0.49% that commences on Tuesday, bankers involved said.

A U.S. dollar bond is expected to follow, but no indication has been given of the timing.

A transaction would likely provide a severe test of investors’ appetite for risk, just five-and-a half years after the country defaulted on $3.2 billion in foreign debt that it argued was illegal and illegitimate.

Other emerging-market countries, however, such as Turkey, Hungary and Mexico, ... Read More

Ecuador Bites the Dust … Again

| June 3rd, 2014 | No Comments »


Readers will recall my report on the RICO conviction of the plaintiffs’ attorney in the notorious case filed against Chevron in Ecuador.   Ecuador’s president (possibly president-for-life, the Ecuadorean constitution notwithstanding) may dislike America, but he sure seems to like the U.S. tort system.  His government heavily backed a suit against Chevron in America for (dubious) harm allegedly caused by Texaco in Ecuador, but it struck out in our courts, with the result that a corrupt judgment against Chevron was obtained in Ecuador itself.  Plaintiffs are still trying to collect on that judgment – good luck with that!

In a second contemporary and potentially mammoth torts case, a different American corporation (perhaps predicting the fiasco that would befall Chevron when it elected to defend itself in an Ecuadorean court) chose the U.S. legal system, which rendered a decision last week.[1]  The defendant is DynCorp, Inc. a contractor working in neighboring ... Read More

In 2013 (FDI) flows to Latin America reached a new historical high

| June 2nd, 2014 | No Comments »
The Economist

According to a report released by the UN Economic Commission for Latin America and the Caribbean (ECLAC) on May 29th, foreign direct investment (FDI) flows to Latin America in 2013 reached a new historical high of US$184.9bn. This is welcome news, given weakening growth rates and softening commodity prices, and is testament to the continued attractiveness of the region’s expanding domestic markets and copious natural resources. However, the outlook is not all positive. Growth in FDI inflows is slowing, the region’s share of global FDI remains relatively low, and there is still a long way to go for the region to diversify away from services and natural resources.

FDI flows to Latin America have been increasing steadily since 2003, with the exception of 2006 and 2009, boosted by booming domestic demand (crucial for market-seeking investment) and high prices for commodities exports. In 2013 FDI to the region continued on an upward trend. ... Read More

No Messiah Please, We’re Ecuadorian

| May 28th, 2014 | No Comments »


Ecuadorian President Rafael Correa appears to have joined the club of Latin American populists who have trouble relinquishing power. Correa announced over the weekend that he aims to change the constitution so that he — and any other Ecuadorian public official — can run for re-election any number of times.

Correa follows in the footsteps of Nicaraguan President Daniel Ortega, whose cronies in Congress last year passed similar legislation, Bolivia’s Evo Morales, who last year got a pliant Supreme Court toallow him another go at the presidency, and Venezuela’s late President Hugo Chavez, who sold voters the idea of unlimited presidential terms in a 2009 referendum.

Correa, already in his third term in office, is peddling his proposal as a way to safeguard Ecuador’s institutions. “I believe in the stability of institutions,” he told Congress during his annual address to the nation. “That’s why I’ve decided to support these initiatives.”

It is true that Ecuador lacks strong institutions and ... Read More

Iranian MPs Leave Tehran for Tour of Latin America

| May 27th, 2014 | No Comments »
FARS News Agency TEHRAN (FNA)- A delegation of Iranian parliament members headed to Ecuador’s capital on Monday to meet the country’s parliament speaker among other high-ranking officials on the first leg of their bi-nation tour which will also take them to Colombia.

The Iran-Ecuador parliamentary friendship group presided by Hamid Reza Fouladgar left Tehran for Quito Monday morning.

The MPs are scheduled to meet high-ranking Ecuadorian officials, including the parliament speaker.

After their visit to Quito, the lawmakers will travel to Colombia on a two-day visit.

Earlier this month, Chairman of the Iranian Parliament’s National Security and Foreign Policy Commission Alaeddin Boroujeri said Tehran lays emphasis on the deepening of relations with Latin nations, and called for holding a joint meeting of the parliamentary foreign policy commissions of ALBA members.

“Iran favors holding a joint meeting of the foreign policy commissions of the parliaments of ALBA members in Bolivia,” Boroujerdi said in a meeting with ALBA ambassadors to ... Read More

Fraying Relationship With Ecuador a Blow to U.S. Counternarcotics Efforts

| May 27th, 2014 | No Comments »
World Politics Review

By Eric Auner

Last month, Ecuador expelled 20 U.S. Defense Department employees from the country. Less than two weeks later, the U.S. announced it would withdraw its anti-narcotics personnel from Ecuador, dealing a further blow to America’s ailing counternarcotics partnerships in the Western Hemisphere.

Ecuador’s expulsion of U.S. military personnel “reflects the increase in capacities and resources of Ecuador to directly assume security and defense efforts independently,” said a statement from the Ecuadorean Embassy in Washington. The statement pointed in particular to  Ecuador’s own counternarcotics efforts from the previous year.

State Department spokeswoman Jen Psaki told reporters that while the United States would respect Ecuador’s decision, “we regret that the outcome will severely limit our bilateral security partnership.” She said that military cooperation between the two nations over four decades “has resulted in significant advances against drug trafficking, human trafficking, terrorism and other transnational crime.”

The moves come in a context of a generally strained U.S. relationship with Ecuador ... Read More

Ecuador’s Correa Seeks to Allow Indefinite Re-Election of All Officials

| May 27th, 2014 | No Comments »
Article originally appeared in the Wall Street Journal

Ecuador’s President Asks for Constitutional Amendment

By MERCEDES ALVARO QUITO, Ecuador—Ecuador’s President Rafael Correa said Saturday he would ask his legislative block to introduce an amendment to the nation’s Constitution to allow indefinite re-election of all elected officials, including the presidency.

“I have decided to request to our block in the Assembly that the Constitution be amended to establish indefinite re-election in all positions of popular election so that the people can choose who continues and who alternates,” said Mr. Correa during his speech to the nation at the National Assembly.

However, Mr. Correa said his decision on whether to run again will be decided upon by his political movement Alianza Pais as well as taking into account conditions before the 2017 elections.

Mr. Correa took office in 2007 and quickly set about to change the constitution to allow him to run for another term, which he won in 2009.

Last year he won another re-election until ... Read More

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