Rafael Correa actively supports the ongoing work of Ecuador’s debt audit commission

9 March 2008 by Eric Toussaint

The CAIC - Comisión para la Auditoria Integral de la Deuda Pública – held an intensive two-week work session from the 10th to 23rd February 2008. 10 Ecuadorian members [1] and the 6 foreign members [2] of the CAIC worked hard to advance the ongoing audit of the debt. The programme for these two weeks went as follows: three days of meetings for each of the 5 sub-committees (bilateral debts, multilateral debts, external commercial debts, internal commercial debts, legal aspects), three days of plenary meetings, two days of field visits, one whole day’s meeting with Ricardo Patino (the Minister of Policy Coordination and CAIC Chairman), one half-day presentation of the commission’s provisional results to President Rafael Correa in the presence of three Ministers (Ricardo Patino, Fausto Ortiz – Minister of Finance, Washington Pesantes – Minister of Justice), one busy day with the Constituent Assembly and finally, one last day’s plenary to determine the work to be carried out through to July 2008..

Seven or eight of the Ecuadorian members of the commission have been working full-time or part-time on the audit for several months and, since December 2007, they have been backed-up by some ten financial experts and a number of civil servants. Several foreign members of the commission have also done a considerable amount of work in the last weeks, either in Ecuador or in their respective countries. Thousands of pages of documents concerning loan contracts have been closely analysed from various points of view, i.e. legal, economic, social, environmental and political. A large number of people have been interviewed. Much diplomacy and tenacity was needed to gain access to the full archives concerning debts in some of the State institutions. Resistance was sometimes encountered due to the fact that some of those originally responsible for the debts being taken on were trying to hinder the work of the commission. Obviously there are still permanent civil servants, throughout the Public Service, who were already in place when the illegitimate debts were negotiated and who do not wish their transgressions to be disclosed. Fortunately, key positions in the administration are held by people who want to uncover the truth. And of course, the determining factor is that it is the President himself who wants the work of the commission to succeed. In fact, the determination of the President and the Minister-Chairman of the commission, combined with the acumen of the members of the commission, is leading to extremely encouraging results.

Working meeting with Rafael Correa

On Wednesday 20th February Rafael Correa and the CAIC had a long meeting in the presidential palace in Quito. This meeting was extremely positive, even though the context was most unfavourable. Torrential rain had been pouring over most of Ecuador for 15 days. The day before our meeting, the natural disaster took a turn for the worse. On the 20th February at 6 a.m. Rafael Correa had had a meeting with the various Ministers and the Head of the Army. He decreed that the army were to help the population, especially in the large banana plantations where owners had built walls which were acting as dams. Because of this emergency, our meeting with Rafael Correa started two hours later than planned but in spite of the situation, Rafael Correa expressed great interest Interest An amount paid in remuneration of an investment or received by a lender. Interest is calculated on the amount of the capital invested or borrowed, the duration of the operation and the rate that has been set. in the work of the CAIC. The meeting lasted three hours, and was divided into two sessions. For the second part Rafael Correa decided on the spot to call in the Minister of Justice and the presidential legal advisor. Rafael Correa made it clear that he wished to take legal measures against those who were responsible for taking on the illegitimate debt, especially at the time of the Brady bonds in 1995. He also said once again that he was prepared to stop the repayment of certain World Bank World Bank
The World Bank was founded as part of the new international monetary system set up at Bretton Woods in 1944. Its capital is provided by member states’ contributions and loans on the international money markets. It financed public and private projects in Third World and East European countries.

It consists of several closely associated institutions, among which :

1. The International Bank for Reconstruction and Development (IBRD, 189 members in 2017), which provides loans in productive sectors such as farming or energy ;

2. The International Development Association (IDA, 159 members in 1997), which provides less advanced countries with long-term loans (35-40 years) at very low interest (1%) ;

3. The International Finance Corporation (IFC), which provides both loan and equity finance for business ventures in developing countries.

As Third World Debt gets worse, the World Bank (along with the IMF) tends to adopt a macro-economic perspective. For instance, it enforces adjustment policies that are intended to balance heavily indebted countries’ payments. The World Bank advises those countries that have to undergo the IMF’s therapy on such matters as how to reduce budget deficits, round up savings, enduce foreign investors to settle within their borders, or free prices and exchange rates.

loans. The Minister of Justice expressed his support in this matter. Three days later, during his weekly talk on the radio, Rafael Correa was clear about his position on this. A decision could be taken when the CAIC reports on its work, after July 2008.

Ecuador’s Constituent Assembly heard the CAIC on the 21st February 2008

The national debt group presented Alberto Acosta [3], the president of the Constituent Assembly [4], with a proposal concerning the debt problem to be taken into account in the drafting of the new Constitution. The new Constitution is being drafted at the moment, and the final draft should be voted by the Constituent Assembly on 24th May 2008 (it may take a further two months for the final version to be ready). The New Constitution is to be put to universal suffrage within three months of being voted by the Constituent Assembly – which has full authority, including that of suspending the authority of the President. One of its first acts, in October 2007, was to suspend Congress, an assembly composed mainly of unpopular members of the former regime. In his introduction, Alberto Acosta reminded everyone that Montecristi, the small town where the Constituent Assembly sits, was chosen because it was the birthplace of Eloy Alfaro who was elected President of the Republic in 1895 and who launched a series of revolutionary transformations. In 1896, Eloy Alfaro suspended debt repayments. The upper classes and the large landowners, backed by the catholic hierarchy, organised his assassination in 1912.
Who exactly participated in the meeting, which was qualified as “historic” by Alberto Acosta? Seven delegates of the national debt group, including Marie Isabelle Altamirano, member of CADTM Ecuador [5], and 10 delegates of the Commission for the Integral Audit of Ecuador’s public debt.
The representative of CDES (the Centre for Economic and Social Rights) presented a project drawn up by the National debt group over the last few days (I participated in the writing up of this proposal during the last two weeks). Oscar Ugarteche (a Peruvian economist now teaching in Mexico) [6] read the progress report of the CAIC.
The meeting with Alberto Acosta was followed at the end of the afternoon by another meeting. The commission No 7, called “Principles which Govern Development” and which is drafting a section of the new Constitution, met with the CAIC. Each commission of the Constituent Assembly consists of around ten of the Constituent’s elected members. The meeting with Commission No 7 lasted three hours and was very animated, since Pablo Lucio Paredes, one of the elected members, was highly critical of the presentation of CAIC’s work. It should be remembered that he is right-wing and was in power in the 1990s [7]. Thus Pablo Lucio Paredes played an active role in applying the neoliberal policies which have done so much harm to the country. It was clear that this member of the Constituent does not in the slightest wish to see the President of the Republic question the repayment of Ecuador’s debt. However the rest of the elected members of the Constituent Assembly on Commission No 7 expressed their support of CAIC’s work.

Alongside the CAIC work

As well as participating in the work of the CAIC in February 2008, I also had several meetings with Pedro Paez, the Minister for Economic Policy Coordination. These especially concerned the Bank of the South, the CIRDI-ICSID ICSID The International Centre for the Settlement of Investment Disputes (ICSID) is a World Bank arbitration mechanism for resolving disputes that may arise between States and foreign investors. It was established in 1965 when the Washington Convention of that year entered into force.

Contrary to some opinions defending the fact that ICSID mechanism has been widely accepted in the American hemisphere, many States in the region continue to keep their distance: Canada, Cuba, Mexico and Dominican Republic are not party to the Convention. In the case of Mexico, this attitude is rated by specialists as “wise and rebellious”. We must also recall that the following Caribbean States remain outside the ICSID jurisdiction: Antigua and Barbuda, Belize, Dominica (Commonwealth of) and Suriname. In South America, Brazil has not ratified (or even signed) the ICSID convention and the 6th most powerful world economy seems to show no special interest in doing so.

In the case of Costa Rica, access to ICSID system is extremely interesting: Costa Rica signed the ICSID Convention in September, 1981 but didn’t ratify it until 12 years later, in 1993. We read in a memorandum of GCAB (Global Committee of Argentina Bondholders) that Costa Rica`s decision resulted from direct United States pressure due to the Santa Elena expropriation case, which was decided in 2000 :
"In the 1990s, following the expropriation of property owned allegedly by an American investor, Costa Rica refused to submit the dispute to ICSID arbitration. The American investor invoked the Helms Amendment and delayed a $ 175 million loan from the Inter-American Development Bank to Costa Rica. Costa Rica consented to the ICSID proceedings, and the American investor ultimately recovered U.S. $ 16 million”.

(the International Centre for Settlement of Investment Disputes), priorities of the government’s economic policies, etc. I also had two meetings with CADTM Ecuador, who also organised a public meeting on 20th February in Quito where three members of CAIC addressed the meeting. I gave an interview on Radio National Argentina about debt auditing, and a written interview about the Bank of the South for the Argentinean internet site Terra. Finally I also took advantage of my stay in Ecuador to prepare the publication in Ecuador with the publisher Abya Yala of two CADTM books: the one on the Bank of the South and the one about the audit of the Ecuadorian debt.

Schedule and important dates for the CAIC

Up to the end of June 2008, the CAIC will continue its meticulous analysis and audit of the debt. On the 3rd and 4th July, an important international symposium will take place in Quito on debt and international law. Then the CAIC will reconvene from the 7th to the 11th July to adopt the final report and recommendations, which will be presented during the following days to the President of the Republic. There will be a meeting, starting on 16th July, concerning the strategy of international debt campaigns with some 50 delegates from every continent. The coming months are going to be decisive for Ecuador.

Translated by Elizabeth Anne in collaboration with Judith Harris.


[1Maria Rosa Anchundia, Hugo Arias, Angel Bonilla, Franklin Canelos, Aurora Donoso, Piedad Mancero, Cesar Sacotto, Karina Saenz, Ricardo Ulcuango and the coordinator of the commission, Patricia Davila.

[2Maria-Lucia Fattorelli (Jubilee South, Brazil), Gail Hurley (Eurodad), Jurgen Kaiser (Jubilee Germany), Alejandro Olmos (jurist, Argentina), Eric Toussaint (CADTM, Belgium) and Oscar Ugarteche (Latindadd, Peru).

[3Alberto Acosta was very active, both in Ecuador and internationally, in the fight for cancellation of the debt. In 2003 he gave a lecture in a workshop organised by the CADTM in Brussels. In 2002, he wrote the preface of the Ecuadorian edition of the book “Your Money or Your Life”.

[5Marie Isabelle Altamirano participated in October 2007 in the workshop on the audit of the debt organised by the CADTM in the Belgian Senate (see the journal “Les Autres Voix de la Planète” n° 37, 2008).

[6Oscar Ugarteche participated in 1999 in the conference which the CADTM organised in Brussels as part of the Jubilee 2000 campaign. With Alberto Acosta he drew up a proposal for an international tribunal for debt arbitration.

[7See his CV on his site

Eric Toussaint

is a historian and political scientist who completed his Ph.D. at the universities of Paris VIII and Liège, is the spokesperson of the CADTM International, and sits on the Scientific Council of ATTAC France.
He is the author of Greece 2015: there was an alternative. London: Resistance Books / IIRE / CADTM, 2020 , Debt System (Haymarket books, Chicago, 2019), Bankocracy (2015); The Life and Crimes of an Exemplary Man (2014); Glance in the Rear View Mirror. Neoliberal Ideology From its Origins to the Present, Haymarket books, Chicago, 2012, etc.
See his bibliography: https://en.wikipedia.org/wiki/%C3%89ric_Toussaint
He co-authored World debt figures 2015 with Pierre Gottiniaux, Daniel Munevar and Antonio Sanabria (2015); and with Damien Millet Debt, the IMF, and the World Bank: Sixty Questions, Sixty Answers, Monthly Review Books, New York, 2010. He was the scientific coordinator of the Greek Truth Commission on Public Debt from April 2015 to November 2015.

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