Sunday, June 19, 2005

A political side to oil economics, in Ecuador

In Ecuador Gets Chávez'd (May 11, 2005, The Nation) Greg Palast examines an interesting series of events related to Ecuador, Oil, and the political finaglings ...

Basically, Ecuador has a lot of debt, and the terms of the debt require that a huge portion of oil income to Ecuador go directly to paying the debt. This is instead of doing something useful like improving the social infrastructure in Ecuador. Instead of improving hospitals and the like, the terms call for sending money to the fat cats.

And just who are these fat cats? They are the people who'd previously pillaged Ecuador's economic wealth, and then fled to South Florida. They own the bonds, and hence own the mortgage on the country they had previously pillaged.

What's happened is that a new fellow is holding the office of President. The previous President fled the country in the face of massive protests, that followed tightened austerity measures required by the bond repayment requirements. The previous President had promised to overturn those bond repayment requirements in favor of improving the peoples welfare, but reneged on those promises just after taking office and flying to Washington for indoctrination by the power elite there.

The new President is the former Vice President. He was constitutionally put into place after the previous President fled. Yet, the U.S. government is making noises questioning his legitimacy - in a move which Palast likens to the treatment of Hugo Chavez, President of Venezuela.

The situation regarding oil is largely technological - that is, are there alternative energy technologies that can replace the role oil plays? But the technological solution is being hindered by political gamesmanship like is demonstrated in this case. There is a lot of money and investment tied up in the existing oil-based game, enough money so that the ones who own the related investments have enough power to buy the U.S. Presidency for President Bush (a.k.a. President Enron, Vice President Halliburton, Secretary of State Chevron, etc).


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