Ecuador: From the middle of the world to the end of the world

by Boaventura De Sousa Santos  | Amandla! Issue No. 66 | October 2019

On the verge of harsher neoliberal policies here in SA, this defeat of IMF attempts to offload the crisis on to the poor and protect the interests of financial and transnational corporations, is a good lesson for authorities in South Africa.

This is an edited version of an article that was first published on the Open Democracy website.

Neoliberal destruction

As its very name suggests, Ecuador is geographically located in the middle of the world. And now, from all appearances, neoliberalism has decided to carry out its end-of-the-world manoeuvres in this country. That is perhaps the reason it is coming to the realisation that the Ecuadorean people are a tough, if not impossible obstacle to overcome. As everyone knows these days, neoliberalism’s deep interconnectedness with the interests of finance capital makes it the most antisocial version of global capitalism.

It recognizes no other freedom than economic freedom, and so finds it easy to sacrifice all other freedoms. The imposition and the violence lead invariably to the transfer of wealth from the poor to the rich and the plundering of natural resources as well as economic assets whenever available.

The International Monetary Fund is the agent in charge of legalising this transfer. It is viewed by the people as sheer theft and makes itself felt in the violent austerity policies imposed by finance capitalism

In order to safeguard the right to legal theft on the part both of creditors and multinationals, a state of emergency was declared and readily legitimised by the constitutional court.  The Armed Forces were mobilised, so they could practice in the fight against the domestic enemies, i.e., the impoverished majorities. Protesters were murdered and injured, and hundreds of children were caused to disappear. It was a maximalist, end-of-the-world strategy, only too ready to raze the country, if that’s what it takes to enforce the will of the empire and of the local elites at its service. 

From a country of hope

The real tragedy in all this is that, during the first decade of this century, Ecuador was the country of hope. It was my great pleasure to be a consultant in the drafting of Ecuador’s 2008 Constitution. It was one of the most progressive Constitutions in the world and the first ever to enshrine the rights of nature among its articles, thereby offering an alternative to capitalist development. Such alternative rested on the principles of harmony with nature and of reciprocity followed since times immemorial by the indigenous peoples. Their approach to life is so foreign to Western logic that it had to be conveyed in its language of origin, Quechua, as Sumak Kawsay, awkwardly translated as “good living”.

The following years were marked by innovative experimentation and high expectations, especially for the indigenous peoples. They had fought for recognition of their rights, respect for their ways of life and for a dignified existence as survivors of the great colonial genocide of the modern age. This is being perpetuated to this day by the new colonialism and racism that for decades has characterised the political parties on both the right and left. 

The president of the Republic at the time was Rafael Correa. A great communicator, albeit one not too deeply rooted in the social movements, he had an anti-imperialist discourse, was always controversial in his positions, and had a low tolerance for dissent in his own political ranks. But he did a remarkable job of renegotiating the foreign debt and effecting social redistribution, even if these efforts were somewhat misguided and perhaps unsustainable. There were two reasons for this. On the one hand, it was difficult for him to see the indigenous peoples as more than poor people, their collective rights, culture and history being of little import. Social redistribution meant control by the state and the destruction of indigenous self-government autonomy. This was a guarantee that dated at least as far back as the 1998 Constitution. It didn’t take long for him to refine his demonising of the indigenous leaders.

Extractivism fuels resistance

On the other hand, he ran foul of the Constitution and invoked financial difficulties to justify his embracing the neo-extractivist, capitalist development model (based on the extraction of natural resources, especially oil), although he broke with tradition in showing a preference for Chinese rather than US investors. Because of his developmentalism and his fierce hostility to the indigenous leaders, over the last few years Correa has been abandoned by a large part of the Ecuadorean left. Sectors of the left, with the blessing of the European ecological left, went as far as calling him an authoritarian and ultra-rightist leader. These days they are faced with a reality check about the true meaning of the extreme right in Ecuador and across the subcontinent. 

Rafael Correa stayed in power from 2007 to 2017 and was succeeded by president Lenin Moreno, previously Correa’s vice-president. At first it seemed that the only change would be one of style. But those familiar with Moreno’s background should pay better attention. The Moreno-backed legal persecution of Correa on charges of alleged corruption was just another version of the new US strategy. This is aimed at neutralising rulers who challenge the interests of US companies, especially as far as oil is concerned. Enter the alleged fight against corruption, as was also the case with Lula da Silva and Cristina Kirchner, among many others.

Enter the IMF

Little by little, Moreno revealed his true goal, which was to realign Ecuador with US interests, in an alliance that culminated with the agreement signed with the International Monetary Fund (IMF). The 1 October decree with austerity measures – the so-called paquetazo – spells profound brutality for low-income families, which constitute the vast majority of the Ecuadorian people. 

The tragic trajectory of the IMF recipes is only too well known. They yield no good results except for the investors, while impoverishing the vast majority. In spite of that, or perhaps because of it, they continue to be used, and each time they are heralded as the only alternative left to save the country. It is not surprising that the IMF is heedless of the ruinous social consequences of its recipes. Capitalism cannot be required to extend its “philanthropy” beyond its own interests. What is surprising is that, during the first twelve days of the crisis, Lenin Moreno seems to have forgotten how strong the resistance of the indigenous peoples can be. It is a resistance which has overthrown three presidents since 1990, with Moreno possibly the next in line.

Twelve days into the fight, Moreno finally gave in. He lifted Decree 883, which had established the austerity measures (first and foremost, the virtual doubling of the price of fuel). It is a backing down – and a poorly disguised one at that – for the sake of political survival. Decree 894 begins with a justification for repealing decree 883 – for technical reasons that basically consist in the impossibility of enforcing it due to resistance on the part of the people. It goes on to offer reasons having to do with the establishment of social peace and harmony and the desire to negotiate the new measures with the relevant social organisations.

Article 2 of the new decree stipulates that the fuel subsidies will be restored and only made more rational and targeted, so that they do not end up benefiting those who do not need them or use them for contraband. Had that been the objective to begin with, the country would not have reacted the way it did. 

A new phase of struggle

With two years to go until the end of his term, Moreno is aware that his backing down is a personal defeat that will cost him dearly in the near future. Everyone will remember the arrogance of his professed purpose to go ahead with austerity at whatever cost. 

In fact, the main defeat is not Lenin Moreno’s, but rather a defeat of the IMF and its austerity policies. The final manoeuvres were “aborted”, as military slang has it. As they were in Argentina, with other countries to follow. The IMF’s difficulties are a reflection of the decline of neoliberalism in the second decade of this century. 

Now that they have a better grasp of where Moreno is coming from, the Ecuadorian people are not expected to let up in the new phase of their struggle – a struggle, moreover, with which they are teaching the world a lesson: unjust power, no matter how strong, always comes with a vulnerable spot, a measure of injustice, and peaceful and organised resistance against it. 

Boaventura de Sousa Santos is Professor of Sociology, University of Coimbra (Portugal), and Distinguished Legal Scholar at the University of Wisconsin-Madison.