US concern at fragile administration in Ecuador

ECUADOR: Washington is concerned that unstable Ecuador is falling into the embrace of Venezuela's 'imperialistic' president, …

ECUADOR: Washington is concerned that unstable Ecuador is falling into the embrace of Venezuela's 'imperialistic' president, writes Hal Weitzman. 

Ecuador has a tradition of power by remote control. Political elites in Guayaquil, the country's main city, have long pulled strings in Quito, the seat of government.

Leon Febres-Cordero, a former president whose nickname is "the owner of the country", leads the Social Christians, one of Ecuador's most powerful political parties, from the western port.

Abdala Bucaram, a former president dismissed in 1997 on grounds of "mental incapacity", controls the Roldosistas - another of the country's main parties - from exile in Panama.

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Lucio Gutierrez, who was forced out of the presidency in April, is currently in Peru, rallying his supporters in Ecuador against the government of Alfredo Palacio, his successor, and vowing to return.

This week saw a more blatant example of the phenomenon, when Magdalena Barreiro, Mr Palacio's nominee for finance minister, said she would not accept the post unless she received the backing of Rafael Correa, the outgoing minister.

That the appointment depended more on Mr Correa - who was forced out last week after clashing with Mr Palacio - than the president powerfully illustrates the fragility of an administration which has been in office less than four months.

"This government was born weak," says Mauricio Pozo, a former finance minister. "It wasn't elected and it doesn't have a political party or deputies in congress.

"Moreover, it doesn't have the time or the political freedom to achieve the fundamental political change most Ecuadorians want."

Mr Correa's belligerence towards the US and multilateral lenders, combined with his support for populist domestic policies, made him the most popular member of the administration.

By contrast, polls show the president's approval ratings have plummeted from 78 per cent when he took office to 38 per cent.

As supporters of Mr Correa threatened social unrest this week in protest at his departure, Mr Palacio said he would resign if the people of Ecuador demanded it.

Although the pugnacious Mr Correa has gone, his policies will remain as part of the backroom deal done this week to secure his support for Ms Barreiro's appointment.

Specifically, Mr Correa wanted to ensure two measures: increased social spending funded by oil revenues and the completion of a deal to sell up to $300 million in bonds to Venezuela.

The pursuit of the former had brought Mr Correa to blows with the World Bank, which last month refused to disburse a $100 million loan, the second tranche of its fiscal aid programme for Ecuador.

While Ms Barreiro's appointment should improve relations with multilaterals, the government's prioritisation of social spending above paying down debt will continue.

The bond sale has caused consternation in Washington, where Hugo Chavez, Venezuela's president, is viewed as a malevolent force with imperialistic ambitions.

Besides the loan, Caracas has also offered to refine Ecuador's oil.

Some in the US State Department worry about what political favours Venezuela will expect in return.

"Ecuador is one country Chavez has identified as ripe to be part of his regional project," says Michael Shifter of the Inter-American Dialogue in Washington.

"The Bush administration is unhappy about Venezuela extending its influence in this way."

Mr Shifter says the US is concerned about pushing Ecuador further into Mr Chavez's embrace.

Aside from its flirtation with Venezuela, the government in Ecuador has also aimed some barbed comments at the US.

Foreign minister Antonio Parra said last month that Ecuador would not renew the agreement allowing the US to operate its only South American base at Manta, on the coast of Ecuador.

However, this government will not make the decision: the current agreement lasts until 2009, before which politically unstable Ecuador is likely to go through several administrations.

Washington is also concerned about hostile noises towards Occidental, the US oil giant, which has been accused of breaking its contract with Petroecuador, the state oil company. The head of Petroecuador resigned last week after demanding that Occidental be kicked out of the country.

Another worry is heightened tension between Ecuador and Colombia, the US's closest ally in the region.

Both countries have accused each other of not doing enough to secure the border, which has become a battleground between Colombian forces and Farc left-wing guerrillas.

While Mr Palacio focuses on clinging to power until elections next year, Mr Correa may be preparing his own presidential or vice-presidential bid.

Youthful, handsome and charismatic, the former academic is weighing whether he can translate support on the streets into votes.

In the meantime, freed from the constraints of government, he may come to enjoy exercising political influence from afar.