January 15, 2009   Ecuadorean president Correa has foolishly abandoned a multi-layered economic strategy for Ecuador and focused GOE's GDP almost entirely on oil production and bond market manipulations, both of which net him off the books rewards. The Washington Post-Reuters reported this week that oil prices are not likely this year to enjoy synthetic speculator highs from derivatives speculators, also aided by the then weakened U.S. dollar, as was suffered by most of the non oil producing nations last year, "Energy consumption has waned sharply, prompting oil prices to tumble by more than $110 since a record peak in July. Analysts said the glut in global crude supplies was likely to cap oil prices for the rest of this year." By relying on speculative off the books oil jiggerings, Correa's economy has collapsed, only boosted occasionally by the FARC, by Iran, by Chavez and by criminal bond market manipulations and theft of other people's assets. This is no way to run a country, even by the ignorant non-economist Marxist Correa. But it is a very good way to convert Ecuador in to Cuba.
 
This conversion to a failed state in Ecuador has been going on now for some time and has accelerated under the dictatorship of Correa, which is also supported by the phalanx of George Soros operatives, sometimes called NGOs and other times called Business Development specialists for buy-ups and more hedging off the books. Like recycling bad ideas, George Soros's own FOREIGN POLICY Magazine wants to tell you just how many of his own employees and his own actors will be enshrined across the Obama team. We figure he holds about 90% of all Cabinet names although due to improperly disclosed and dishonest personal practices of these cheap white trash carry overs from the Clinton days, some of Obama's cabinet picks may not make it or should not make it.
 
Nonetheless, the Soros team for Latin America is an especially sad recycling of socialist -communists [sometimes aligned with misguided CIA operatives who always tell you that they alone know better than anyone else] from the Clinton  era, most all are Soros and Obama election consultants. Here  from the Soros-John Podesta personnel placement - Transition and US governmental selection team are some more names in play: "And while Hillary Clinton's answers to Senate Foreign Relations Committee, incoming chairman Sen. John Kerry indicated final decisions on U.S. envoys to South Asia and Iran have not yet been made, Obama transition figures have made known that former U.S. ambassador to the U.N. Richard Holbrooke is in line for the South Asia envoy job, sources say. Department of Homeland Security-Former NSC official Rand Beers, who advised the Obama campaign on terrorism and intelligence issues and is now with the National Security Network, has been appointed counselor to incoming DHS chief Janet Napolitano.

Western Hemisphere

Sources telegraph a bunch of names in the mix for key USG Latin America/Western hemisphere posts, to be further untangled in coming posts. Key among them: Dan Restrepo, Obama campaign senior lead Latin America foreign policy advisor now with the Center for American Progress, former Clinton-era NSC and State Department inter-American affairs hand Arturo Valenzuela, Julia Sweig of the Council on Foreign Relations, Nelson Cunningham, Frank Sanchez, Fulton Armstrong (a former CIA Cuba hand who raised John Bolton's ire, now advising Sen. Christopher Dodd), mentioned as a possible NSC senior director for Latin America, and Robert Gelbard, a former assistant secretary of state and U.S. ambassador to Indonesia who's served as a member of the formal Obama transition team.

USAID

Among those in the mix for top USAID jobs, we've heard Gayle Smith, former Clinton-era Africa hand and advisor to the Obama campaign who is now with the Center for American Progress. Smith is also mentioned as a possible assistant secretary of state for African affairs. Helene Gayle, current president and CEO of CARE and a former CDC official, is in the running for a top job as well."

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The sorry news about these so called "friends" of Latin America, whose only skill is....what do they call it? - policy production [also called gas bagging] or diplomacy. Tragically, not one knows how to make serious decisions nor serve to lead anything....except to produce more paper and more cell phone calls...and aid and abet the George Soros family of funds, also called promoted by his "NGOs", unwittingly and illegally and opaquely currently and foreseeably co funded by the U.S. taxpayer to grow Soros's own business adventures which also sell legalized abortions, euthanasia, Jew hatred and Alvaro Uribe hatred- also called enabling the FARC narcoterrorists.

This is not a real way to deliver actual friendship when your friends are....dying, as Latin America is dying from crime and cartel corruption.

Because it is January, the Wall Street Journal-Heritage Index of Economic Freedom Report is out here . We reprint the Ecuadorean report here, which you will sadly and aberrantly never see from any US AID Report, also co produced by Soros activists:

2009 Index of Economic Freedom
The Link Between Economic Opportunity & Prosperity
A product of The Heritage Foundation & The Wall Street Journal

Regarding Ecuador:
About the Index
 
« Previous: #136 Cameroon
Next: #138 Argentina »
Ecuador
Map data ©2009 LeadDog Consulting, MapLink/Tele Atlas, Europa Technologies - Terms of Use
World Rank: 137 Regional Rank: 24 of 29
 
Ten Economic Freedoms of Ecuador
54.0 Business Freedom Avg. 64.3
30.0 Investment Freedom Avg 48.8
72.6 Trade Freedom Avg. 73.2
40.0 Financial Freedom Avg 49.1
85.8 Fiscal Freedom Avg. 74.9
25.0 Property Rights Avg 44.0
83.1 Government Size Avg. 65.0
21.0 Fdm. from Corruption Avg 40.3
75.0 Monetary Freedom Avg. 74.0
38.3 Labor Freedom Avg 61.3

Quick Facts
Population: 13.2 million
GDP (PPP): $94.3 billion
3.9% growth in 2006
5.1% 5-year compound annual growth
$7,145 per capita
Unemployment: 9.3%
Inflation (CPI): 2.2%
FDI Inflow: $2.1 billion

Ecuador's economic freedom score is 52.5, making its economy the 137th freest in the 2009 In-dex. Its overall score is 2.8 points lower than last year, primarily reflecting a decline in investment freedom and financial freedom. Ecuador is ranked 24th out of 29 countries in the South and Central America/Caribbean region, and its overall score is slightly below the world average.

Ecuador ranks above the world average in three freedoms. Fiscal freedom scores well because of moderate income and corporate tax rates and relatively low tax revenue as a percentage of GDP; government size reflects efforts at greater transparency and relatively low government spending; and monetary freedom remains stable.

Ecuador's score fell in seven of the 10 freedoms, most notably financial and investment freedom. Its property rights, freedom from corruption, and labor freedom scores are especially low. New tax and ownership laws have left private petroleum companies vulnerable to government intervention. Heavy regulation hurts business and labor flexibility. The rule of law is politically influenced and inefficient, and expropriation of private property is a constant concern. The judiciary rules erratically and is subject to corruption.

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Background
Ecuador is the world's largest banana exporter and has ample petroleum reserves. The government-run oil industry is mismanaged and corrupt, and production is dwindling. Factions in the legislature fuel political and institutional instability, and there is a lack of respect for the rule of law. In January 2007, U.S.-trained economist Rafael Correa was elected president on a populist platform of tighter government control of banking and oil production, default on debt owed to international lenders, and opposition to a proposed free trade agreement with the United States. Capital flight has soared, and foreign direct investment has fallen. Aligned with Veneuela's leftist President Hugo Chavez, Correa has worked to weaken constitutional and legislative restraints on his authority and to silence the press by seizing media companies.

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Business Freedom 54.0
The overall freedom to conduct business is limited by Ecuador's regulatory environment. Starting a business takes an average of 65 days, compared to the world average of 38 days. Obtaining a business license takes about half of the world average of 18 procedures. Closing a business is a lengthy process.

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Trade Freedom 72.6
Ecuador's weighted average tariff rate was 6.2 percent in 2006. Variable levies against certain agriculture goods, registration with the central bank to obtain import licenses for all products, mandatory pre-approval for imports of certain agriculture products, import bans, inefficient administration of tariff rate quotas, discriminatory standards and regulations, non-transparent government procurement, and issues involving the enforcement of intellectual property rights add to the cost of trade. Fifteen points were deducted from Ecuador's trade freedom score to account for non-tariff barriers.

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Fiscal Freedom 85.8
Ecuador has moderate corporate taxes. The top income and corporate tax rates are 25 percent. Oil companies are subject to a top tax rate of 44 percent on distributed profits. Other taxes include a value-added tax (VAT), an estate tax, and a capital gains tax. In the most recent year, overall tax revenue as a percentage of GDP was 13.2 percent.

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Government Size 83.1
Total government expenditures, including consumption and transfer payments, are low. In the most recent year, government spending equaled 23.7 percent of GDP. Despite steps to improve fiscal management, state-owned electricity and telecommunications enterprises remain inefficient.

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Monetary Freedom75.0
Inflation is relatively low, averaging 2.5 percent between 2005 and 2007. Monetary performance has been solid since the dollar became the national currency. The government applies price bands for agricultural products; controls the prices of electricity, telecommunications services, and pharmaceuticals; and subsidizes public transportation and cooking gas. Fifteen points were deducted from Ecuador's monetary freedom score to adjust for measures that distort domestic prices.

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Investment Freedom30.0
Foreign investment receives national treatment, but investment in petroleum exploration and development, mining, domestic fishing, electricity, telecommunications, broadcast media, coastal and border real estate, and national security is subject to government approval and additional regulatory requirements. Regulation is complex, non-transparent, and prone to corruption. There are no antitrust laws, and industry is relatively concentrated. Systemic weakness and political or economic pressure in the rule of law are the most important problems for investors. Profit repatriation and foreign access to Ecuador's credit market are allowed. There are no restrictions on foreign exchange accounts, direct investment, or current transfers. In some cases, the judicial system has failed to provide adequate protection from unlawful expropriation.

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Financial Freedom40.0
Ecuador's financial sector is not fully developed, and access to credit can be costly. In 2007, there were 25 commercial banks (one of them state-run), down from 48 in 1998. The four largest banks control 65 percent of deposits. The state controlled about 10 percent of bank assets at the end of 2007. The U.S. dollar is the official currency. Credit is available on market terms, but the lack of credit options hampers entrepreneurial activity. The two stock markets are underdeveloped, and little equity has been traded. Foreign takeovers of limited-partnership banks and insurance companies are restricted.

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Property Rights25.0
The rule of law is weak, and intellectual property rights are not enforced. Court delays are significant, judgments are un-predictable and inconsistent, and the judicial system is subject to corruption. Expropriation is possible, and agricultural land may be seized by squatters. In 2006, the government amended the hydrocarbons law to modify the terms of oil production-sharing contracts. In 2007, President Correa increased the state's share of extraordinary petroleum revenues under this amendment to 99 percent, and in December 2007, a new tax law set the state's share of extraordinary petroleum revenues at 70 percent for contracts signed after the law goes into effect.

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Freedom From Corruption21.0
Corruption is perceived as pervasive. Ecuador ranks 150th out of 179 countries in Transparency International's Corruption Perceptions Index for 2007. Corruption is blamed for a decade of steady decline in state oil production. Anti-corruption statutes are not enforced, and demands for petty bribes and theft of public property are common among officials.

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Labor Freedom38.3
Ecuador's burdensome labor regulations hinder employment opportunities and productivity growth. Job-tenure regulations create a disincentive for new hiring. Many employers resort to short-term outsourcing contracts.

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Economic Freedom Score
 
Country’s Score Over Time
 
 
This is a great and useful Report....pre 2006. Inexplicably the Report failed to review Correa's 9-08 so called constitution which kills all economic freedoms in Ecuador. We are sympathetic about this because a) the USA performs no fact based analysis on Ecuador and what little they do is based on inexplicable fact-free Soros contractors and silly USG employees and b) Ecuador delivers no fact based accountability and lies consistently to everyone. Tragically, it will shock none that next year's Report will no doubt conclude that Ecuador is on par with Venezuela and Zimbabwe for failure to thrive with no economic freedoms apparent.
 
While not predicting what will be but predicting what might be, the USA's Pentagon has a superb analysis of current trends here   which is a must-read for any serious citizen. This Report is useful for noting that failed states are like Black Holes in the galaxy- they suck life from inside their own space. Much attention is given to the corrupt activities across Northern Mexico- which Mexico City continues to pretend is a North American problem or that all problems can be solved a la Lopez Obrador with Castro's tender communism of total repression.

Today about 1/3 of the United States suffers from Mexico's very expensive crude export: crime in all its variants. To be sure not all Mexicans are criminals and not all Mexicans are illegally present in the USA and not all Mexicans suffered inside Mexico from cheesy socialized medicine or unpreparedness- called ignorance- from really silly education which prepares many to do not much. But what we do know is that the USA now warehouses tens and tens of millions of Northern Mexicans across 1/3 of the USA. Mexico thinks it is the USA's obligation to gift their non tax paying Mexican citizens in the USA with free votes for Obama, free housing and free benefits and a free hand to expand drug cartels in the USA which serves to distract from South American issues such as Lula's nuclear bomb building arena, still barring the UN inspectors.
 
This Pentagon Report shows that Pakistan and Mexico are similar because both could self destruct soon. We must point out that Mexico is functionally for more free than Pakistan and has a slightly better chance of building a better Mexico....if crime does not overcome. But Ecuador is today even worse than Pakistan....just review Correa's corrupt acts and his cartel corruption-enabling constitution which also protects and defends Ecuador's only import these days: more terrorists, which Correa considers his new economic base.
 
The Pentagon states that like Pakistan, Mexico itself could self destruct and die from its own hand...in corruption and ennui. If this is what Mexico is selling, we should not be buying. With a certainty, Correa's Ecuador is selling ennui and corruption and terror. No one should buy his evil.
 
-Pedro Camargo for ECrisis