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Simeon Mitropolitski

Simeon Mitropolitski is a Canadian analyst, of Bulgarian origin, and a former syndicated columnist with the Bulgarian News Agency (BTA). He is the author of several hundred articles dealing with hot political and economic topics, both national and international.

He was part of the first group of Bulgarian intellectuals and students that began the opposition movement that finally put an end to the communist regime in this country in 1989, and in 1996-1997 participated in international observation teams during the elections in several Balkan countries - Romania, Albania and Bulgaria.

In 2002 Simeon and his family moved from Bulgaria to Canada where they live now in Montreal, province of Quebec. Simeon is a Master of Political Science from McGill University and a B.A. of Political Science and History.

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26 April 2007

Ecuador: Playing with fire

© 2007, IRED.Com, Inc., Simeon Mitropolitski

New Ecuadorian president Rafael Correa is reshaping his country as nobody has done for generations. If his plans are materialized, Ecuador very soon will look like a super-presidential regime, something between ordinary dictatorship and plebiscitatian democracy. Big state-owned enterprises will dominate the economy. Ideological dissidence will be marginalized at best, or completely eliminated at worst. Ecuador will become 'independent' in a sense that it will cut as many as possible economic links with the capitalist world. Income inequality will be reduced not because there will be much fewer poor, but because there will be definitely fewer rich persons.

Ecuador has been economically mismanaged for decades. Many social and economic problems go back to the model imposed by Spanish conquistadors. Strict racial segregation between natives and Latinos, no opportunities for vertical mobility for the majority, very few economic benefits from modernization, huge income disparities, political powerlessness for many; the list of problems may be quite long. Political demagogues usually don't come out of nothing. For decades 'dependency' theorists have argued that as far as Latin America is within the system of international exchange, it will always be treated like a poor family member. So we shouldn't be totally surprised when one or another country in the region decides to make a try of breaking with this status of the poor relative.

The new Ecuadorian president's plan looks remarkably simple. In a largely populist move of largesse, he gives billions of dollars to the poorest citizens, thus creating a large plebiscitarian base for further reforms. The money comes from the budget and from expropriations. Big and foreign investors are scared to death. They sell out and run away. 'Friendly' companies or states purchase their interests, think Venezuela. Within months the economic base for opposition political parties is largely destroyed. When the budget runs dry, the opposition through state-controlled media will be accused of economic sabotage, and will be eliminated in the name of the economic patriotism. When the people starts asking questions about the true nature of the regime, there will be nothing, no parliament, no courts, no independent media, to protect their interests from the government, think Cuba. Ecuador will be 'free' from foreign dependence, and the government will be free from popular dependence, except in rhetoric.

If such a plan, although simple, sounds like a pure fantasy, the facts show it isn't. The move of expropriation has already started, and the easy money is already pouring toward poorest citizens. Plebiscitarian base is already tested once, and the result is positive. The parliament and the courts are emasculated. The president Correa has some time to accomplish his deed, to rewrite the constitution, eliminating any institutional form of dissent. His opponents still can flee the country, and those with economic interests still have a time to sell them to 'friendly' companies or states. People now rejoice. For the first time in history, his role is more than just watching how others make politics; he thinks he's making the politics. In fact, he's used in order to eliminate what he should hold most dear, his own legal protection against the government.

Talks about 'independence' from foreign economies are, of course, nothing more than a cheap ideological trick. What Ecuador has in abundance, and what this country can offer, is the oil. No matter who's in charge, the oil will flow to the international markets. Making oil production state-owned will eliminate the economic buffers any government must have in case of unexpected economic downturns. In times of boom having oil rents may be good for a plebiscitarian form of government; in times of slump, however, there will be no private interests to absorb the shocks. Which leads us to an interesting question, which is, why a U.S.-graduated economist like Correa makes this fateful step with the knowledge that the odds are predominantly against him?

Building a new society, including socialism, is like declaring a war, in this case not against foreign governments, but against social groups within your own society. Nobody declares a war without at least a slightest chance for a victory. In the case of Ecuador, there are strong indications that the normality, the time of peace, the capitalism in general, is considered as the surest road toward social defeat. It doesn't mean this statement is true, but this is the main calculation that people such as Correa or Chavez make. On the other hand, they perceive this time as a short window of opportunity when they can strike against the global capitalism. They don't consider the Soviet model as enough convincing that such experiments are doomed. In a sense, they do believe that Soviet Union collapsed because it had to coexist with capitalism; if the capitalism is about to crumble now, and they believe it might be, their experiment may succeed. If they don't try, they will fail.

The same kind of calculation was done in mid-1941 in Japan when the imperial government decided to strike against the United States. Japan was heading to economic collapse due to the U.S. oil embargo. The only way to break 'free' was to reach the oil of Indonesia; the only way to do it was through a war against Britain and the Netherlands; the only way to prevent immediate U.S. naval reaction was to make a preventive strike against America; the result was Pearl Harbor. Japan never thought it could win a long war against the United States, but hoped that America would decide that fighting for the Philippines wasn't worth doing. Tokyo made a huge miscalculation. Are Chavez and Correa making the same mistake of underestimating the outside world reaction?

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See also the directory of companies providing real estate services in, and general real estate information of Ecuador.

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