1-4-07    Ecuador's President-elect Rafael Correa is a liar. He noticeably and irrefutably lied to the people of Ecuador in October and November, 2006 about his platform and his intentions. He did this to garner votes which he would not have had were his true self/his true intentions known. A more polite way to say this is that Rafael Correa knowingly and deceptively presented a false promise of moderation to his people. No amount of justification, excuses, lame notions of "face washing" or passive-aggressive foolishness of expediency can remove the fact that Rafael Correa is an accomplished liar in all matters.

The January 4, 2007 Financial Times, in an apparent effort to try to undo their past puff pieces about the Ecuadorean crisis, finally gets down to some commendable reporting on what so many have browned-out: core information about Correa's anti-democracy efforts, his strict adherence to Hugo Chavez’s minders, and his blatant abnegation of integrity during his campaign game of liar’s poker. No amount of overblown media puffery for their leftist idol, Rafael Correa or Ecuadorean TV footage showing Correa and his upcoming singing "Cabinet" cabaret of thugs, pornographers, Socialist-Communist Party leaders, and Chavez-apologists (complete with one on one Chavez minders already installed) can remove the facts. Correa and his singing Cabinet crooned campfire- style 1960’s songs of solidarity with CHE! as the cameras rolled. Obviously, this dimwitted cabaret act of the Correa Cabinet would be well advised to sing a different tune, starting with Ecuador's national anthem....not love ballads to Che. We do not believe that Correa’s crooning cabaret style “Cabinet” performed their CHE! ballads for U.S. Senator Harry Reid during the mutual leftist love fest ceremony at the U.S. Embassy in Quito on December 29, 2006. 

Mysteriously, Harry Reid, himself under an ethical and legal cloud, reported that he had a "spiritual experience" during his Andean shopping and posh spa visit, paid for by U.S tax dollars. We can also assume that Mr. Reid's incomprehensible (and irresponsible) meaningless vague efforts at multinational diplomacy- itself a mere cover for his New Year's vacation- will not be regarded as anything significant by any outside Hugo Chavez's well padded political propagandists.

Not a single agenda item uttered by Correa and his crooning cabaret performing “Cabinet” bears the imprimatur of honesty or sound governance. Harry Reid and the media may be shamefully entranced by Correa and his clownish crooning cabaret “Cabinet” but anyone with a brain to use and eyes to see (aka responsible adults) must apply common sense and reject the duplicitous Correa deceptions which guarantee the destruction of Ecuador’s future as liberty dwindles. Campfire songs by youthful Chavez-style communists may hold some appeal to some, especially the For a de Sao Paulo and latent Hezbollah recruiter types, but the real work of Ecuador cannot be managed by this coterie of goofy, ill-prepared and badly educated crooners. We also remind that there is nothing to idolize in the utterly debauched and depraved Che Guevara whose own failed schemes with Fidel Castro led many to an early grave. The following article raises huge warnings that must be given adult supervision, long lacking. Indeed, Ecuadoreans may soon sign a new tune, revising The Battle Hymn of the Republic.

- The editors, ECrisis

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 Investors wary of Ecuador’s president-elect

By Hal Weitzman in Lima

Published: January 3 2007 17:59 | Last updated: January 3 2007 17:59

There are still 11 days to go before Rafael Correa is sworn in as Ecuador’s president on January 15, but the radical leftist has already sparked jitters among foreign investors.

Mr Correa, an ally of Hugo Chávez, the fiery Venezuelan leader, campaigned on a platform of overhauling political institutions, prioritising social spending above debt repayment, reviewing contracts with foreign investors and terminating the lease of the only US military base in South America.

The former finance minister softened some of his rhetoric ahead of his election victory in November, leading to widespread expectations that he would moderate his stated plans once the poll was over. But those hopes have been dashed in recent weeks as the president-elect has reaffirmed his commitment to some of his more contentious pledges.

Mr Correa has said that under no circumstances will he sign a bilateral trade agreement with Washington, has stuck to his promise to eject the US from the Manta base and has condemned as “unacceptable” Colombia’s aerial fumigation of coca crops along the border as part of the US-sponsored “war on drugs”.

He has also reiterated his plan for an assembly to rewrite the constitution, saying the body would have “full powers to limit, restructure or dissolve” any branch of government – in effect crippling Ecuador’s newly elected Congress.

He may well be forced to compromise on his proposals for political reform once in office or face a war of attrition with the legislature. His party opted not to field any candidates for Congress, which it views as rotten and discredited. That means he faces a near-universally hostile legislature that will resist any attempt to limit its powers.

Recognising that rewriting the constitution will be a fraught exercise, Mr Correa may choose to focus his efforts instead on his plans for the oil sector and for handling Ecuador’s $11bn (€8.4bn, £5.6bn) debt burden.

If his agenda is blocked on the domestic front, he could feel more pressure to act against foreign investors and bondholders to prove he has not lost his radical credentials.

Superficially, Mr Correa’s views on debt are clear. “With this level of debt, we cannot move the country forward,” he said in December. “A country that spends twice as much on foreign debt as it does on education cannot develop.”

But in fact his views have produced uncertainty and confusion: he has refused to rule out an “Argentina-style” default, insisting that any renegotiation will be friendly rather than imposed.

The danger for Mr Correa and Ecuador is that the mere threat of default could prompt an “Argentina-style” financial crisis and a run on the banks, putting pressure on the country’s dollarised economy and weakening his position as president.

His refusal to clarify his intentions has wreaked havoc on perceptions of Ecuador’s credit worthiness: every time Mr Correa has restated his wish to restructure commercial, bilateral and multilateral debt, the value of the country’s bonds has tumbled. The issue has more to do with political will than economic need: Ecuador, the region’s second-largest exporter of crude to the US, is being cushioned by the oil price boom and can afford to pay its debt.

Most analysts are still betting that Mr Correa will calculate that the public purse is sufficiently well stocked to increase social spending and still make debt payments. However, Wall Street is still jittery, valuing Ecuador as more risky than Iraq. In recent weeks, the cost of a credit default swap covering Ecuador has soared.

On oil, Mr Correa has said he intends to review contracts individually, and will renegotiate those in which the government take is too low. That is unwelcome for foreign investors in the sector such as Repsol of Spain, Brazil’s Petrobras, Andes Petroleum of China and Perenco of France, which since April have been paying a new tax of 50 per cent on their “extraordinary profits”.

The president-elect has said he will not seek to change all existing contracts but is clearly intent on going for much bigger government revenues in some cases, saying last month that four out of every five barrels produced should be channelled into development.

Mr Correa has also said he favours rejoining the Organisation of the Petroleum Exporting Countries, which Ecuador left in 1992. Although the International Energy Agency in Paris has warned that to do so could inhibit fresh private investment, Opec membership would suit Mr Correa’s strategy of strengthening the power of Petroecuador, the state oil company, relative to that of foreign investors.

The detail of Mr Correa’s plans is still being worked on, but the confident voices that predicted he would soon turn market-friendly are becoming more uncertain.

Copyright The Financial Times Limited 2007