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.

IMF Loans to Ecuador Bailout Bankers, Not the People

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