*{ http://www.foei.org/publications/link/90/e90imf_loans_to_ecuador.html
19 juillet 2002


issue90  
July-September 1999   
 
}

 *partie=titre IMF LOANS TO ECUADOR BAILOUT BANKERS, NOT THE PEOPLE *partie=nil
  
At a recent conference in Quito on alternatives to economic globalization, a Peruvian speaker made the observation that Ecuador may be the only country in South America that could still find a path out of the devastating impacts of globalization. And while he was probably right, that opportunity seems to be slipping away in the climate of austerity ushered in by the Jamil Mahuad government and the International Monetary Fund (IMF). The recent round of negotiations with the IMF, the latest in a long series of structural adjustment strategies, has led to high inflation and rising prices. This has had a severe impact on Ecuadorians, 60 percent of whom were already poor.

The IMF has offered Ecuador loans to stabilise the corrupt and virtually bankrupt banking system, loans which will no doubt include the requirement that the country further integrate itself into the global economy. To do this, Ecuador must commit to increased exports and open the country to free trade, particularly the free flow of investments. The IMF loans will increase Ecuador's debt by 15 percent. It is extremely unclear how the country will be able to service this higher debt, particularly since the government has already cut social programmes to zero. What is clear is that these loans will not benefit Ecuadorians, but are simply a way to keep the international banking system afloat. The IMF requirement on the free flow of investments is indicative of its strategy for the implementation of MAI-type agreements, even in the absence of an overarching international accord.

Increased exports spell disaster for the environment, and worsen the plight of the country's campesino and indigenous communities, who depend on natural resources for their survival. With the new austerity measures, Ecuador now has even less room to maneuver. The country's $15 billion debt has become unsustainable and unpayable, ranking far above the limits of the Highly Indebted Poor Countries (HIPCs) level of 250 percent of exports. Ecuador has an average per capita income, however, that is not low enough to qualify for debt forgiveness, even though most of the population lives on less than US$2 a day.

Ecuador also has oil and other valuable resources, so it is supposedly better off than most developing countries. Yet this is small comfort to the vast majority of Ecuadorians who have never benefitted from export revenues, but who have had to pay the costs of the bank bailout. Currently, food prices are 100 percent higher than at the beginning of the year and the costs for cooking gas and electricity have risen 50 percent. The unemployment rate has also risen dramatically, but the real problem is that more than 50 percent of Ecuadorians were sub-employed in the first place, part of the absurdly named "informal" economy.

The light on the horizon is that the people of Ecuador are now in revolt. Since July, the country has been in the grips of a general strike and indigenous uprising. People are rejecting the premise that they must go hungry in order to rescue corrupt bankers. Native groups have occupied and cut communications centres and marched in Quito, where twenty people were shot (two killed). Oil workers have occupied the Esmeraldas refinery, doctors are on indefinite strike and teachers have taken to the streets. Things are serious, but so are the consequences of an export-led economy that is based on poverty wages and environmental and social destruction. The trouble may be over soon, at least in the streets, but if the IMF and the government have their way, the possibility of finding a new, sustainable path for Ecuador and Latin America may be lost. Then the real trouble will begin.

Gerard Coffey, FoE Ecuador
 
 *partie=titre BILLIONS FOR SUSTAINABILITY? *partie=nil
  
 *partie=titre Finding the Path to a Sustainable Europe *partie=nil 

Approximately 120 NGO representatives, policy experts and politicians gathered alongside the official EU summit in Cologne, Germany, in June to discuss the future course of EU regional development. A staggering 235 billion Euro (US$ 249 billion) have been allocated for regional development in the next funding period, 2000 - 2006. How the EU spends these funds - which will be complemented by multilateral development banks and national, regional and private sources - will have a major impact on sustainable development in Europe.

As part of FoE's Sustainable Europe project, Friends of the Earth and Eco Counseling Austria carried out case studies in 15 European countries demonstrating how EU funds are currently allocated. Billions for Sustainability? EU Regional Policy and Accession, which was presented at the conference, offers one positive and one negative example from each country. The good news: In Ireland, a wastewater treatment plan using reedbeds is saving money and recycling nutrients back into the soil. In Germany, an old farm has been converted into an "eco-village" that supports itself with an organic farm, restaurant and educational center. The bad news: In Poland, the Poznan bypass highway project does not, as indicated in the name, bypass the city but actually crosses it. It passes through a drinking water reserve and a recreation zone. In Spain, the increasing concentration of landplots threaten biodiversity and may be followed by environmentally damaging intensive farming.

The conference served to empower groups to begin working on regional planning and produced marching orders for participants. Small groups will target their local, regional and national governments with questions about the regional development funding process. NGOs will demand seats on the planning committees, a strategy open to accession and pre-accession states.

To obtain a copy of Billions for Sustainability? EU Regional Policy and Accession, contact BUND/FoE Germany (e-mail info@bund.net). Summaries are available in 12 European languages by contacting the FoE offices in Cyprus, Czech Republic, Greece, Estonia, Ireland, Italy, Latvia, Lithuania, Poland, Scotland, Sweden, and Spain. In Austria, contact EcoCounseling Europe (umweltberatung.gmbh@magnet).

Petra Maier, BUND/FoE Germany