CounterVortex

Ecuadoran president Rafael Correa announced on April 21 during his weekly radio program that he planned to expel World Bank representative Eduardo Somensatto from the country and would consider legal actions against the lending institution itself. According to Correa, the World Bank held up a $100 million credit when he was economy minister in 2005 because of a reform of the law governing funds from petroleum; the reform increased the amount budgeted to social services and cut back the amount for debt repayment.

Correa said the World Bank “gave us the runaround” for three months in 2005 and then told him that the payment was held up because of the reform. “[I]n other words, they punished a sovereign country for modifying a national law,” Correa charged, adding that his government “won’t put up with blackmail from this international bureaucracy.” “[W]e are nobody’s colony,” he said.

Ecuador currently owes $748 million to the World Bank. Correa has announced plans to cut back the country’s reliance on both the World Bank and the International Monetary Fund (IMF). On April 15 Correa said Ecuador was cancelling a $9 million loan from the IMF. Along with Argentina, Brazil and Venezuela, Ecuador is promoting the creation of a Bank of the South to lower dependence on institutions like the World Bank and the IMF, which are dominated by Europe and the US. On April 19 Correa launched a social assistance plan which is intended to create 300,000 jobs in the next three years. Correa, who took office in January, now has a approval rating of 70%. (La Jornada, Mexico, April 22 from
Reuters)

Correa’s position was further strengthened by the overwhelming support he received in an April 15 referendum on his proposal for a Constituent Assembly to write a new Constitution. Final returns showed an unprecedented 81.72% of voters backing the plan; the abstention rate was 28.4%. (El Diario-La Prensa, NY, April 21 from EFE)

Correa’s attack on the World Bank came as the bank itself was shaken by a corruption scandal involving its president, former US Defense Department official Paul Wolfowitz, who arranged a promotion and a large pay increase for his companion, World Bank official Shaha Ali Riza. On April 20 the bank’s board of directors expressed “grave concern” about Wolfowitz’s leadership and called for a broad inquiry. [New York Times 4/21/07]

From Weekly News Update on the Americas, April 22

See our last post on the Ecuador.