The oil crisis in Ecuador
is being ignored totally by the MSM — after all, there’s all the anti-war sentiment keeping them busy. Fortunately, thanks to the internet one can actually read about the pressing issues of our time. A.M. Mora y Leon at Publius Pundit has an excellent ECUADOR NEWS ROUNDUP,
Strife has engulfed Ecuador again, with thousands of protestors in two northeastern provinces shutting down oil wells that supply 15% of Ecuador’s GDP, 33% of Ecuador’s tax base, and 2.3% of the U.S.’s energy. The protestors didn’t just block the pipelines – they blew them up with dynamite and committed other acts of vandalism, spilling oil and harming the environment. Initial demands were for more local jobs, more roads and infrastructure and more more environmental from the foreign oil companies with investments there. But now they are interested in rewriting contracts of at least three foreign oil companies operating there – Oxy Pete, EnCana and PetroBras.
Ecuador is the U.S.’ second-largest oil supplier[*] in the hemisphere. With both supply and refining capacity tight, that lost oil won’t be easily replaced. And because Ecuador is dollarized, the government cannot print money to finance itself. This makes the trouble there a huge crisis .
There’s turmoil in the government, with a weak president and a cabinet that cuts its own deals. Two malevolent players in this are deposed president Lucio Gutierrez who was ousted earlier this year, and Hugo Chavez, who has a couple of ministers apparently in his pocket – and they are all meeting in Havana as I write this.
[*] Ecuador is the 4th US oil supplier in the Americas.
For now, the protesters have agreed to a truce with the government.
Update: This is good news: CAFTA squeaks through
CAFTA is a modest agreement between a whale (the United States) and six minnows (five nations of Central America—Guatemala, Honduras, El Salvador, Nicaragua and Costa Rica—plus the Dominican Republic). The whale already admits about 80% of the minnows’ exports tariff-free, and the Central American countries have already cut their average tariffs from around 45% in 1985 to about 7%.
Though the economic stakes were low, the politics were intense. Turn your backs on this agreement, congressmen were warned, and your country’s Central American allies might opt instead for the “Bolivarian alternative”. This rebel vision of a Latin America united against the gringos is named after Simón Bolívar, a 19th-century nation-builder, and espoused by Hugo Chávez, the leftist president of Venezuela.
The bad news being,
But Mr Chávez in Caracas frightens America’s congressmen rather less than the sugar and textile lobbies at home. In the end, Mr Bush’s team had to resort to pettier sorts of persuasion. They won over several Republicans by promising that the linings and pockets of any garment stitched in Central America would be made from American fabric. Other hard-to-get congressmen will be rewarded with roads and bridges for their districts, opponents of the bill allege.
But at least it’s a start.