Ecuador’s Transformation: talk by minister Guillaume Long

Rachel Godfrey Wood reports.

Ecuador’s Minister of Knowledge and Human Talent, Guillaume Long, gave a speech to a packed room at Portcullis House on the transformations taking shape in Ecuador under the Citizen’s Revolution. He highlighted three key phases in this transformation, the first being the refoundation of the nation state following the election of Rafael Correa in 2006. This was necessary following the vast economic dislocation caused by a banking crisis in 1999, during which approximately twenty banks went bust and 2 million people were forced to migrate out of the country. The neoliberal period generated high levels of political instability in Ecuador, which saw seven presidents in a decade prior to Correa’s election.

The institutionality of the country was a mess, with local and regional Mayors often holding more power than the central government. The growing disaffection among the population saw a rise in support for candidates who campaigned on anti-neoliberal, progressive tickets, but the first who won like this, Lucio Gutierrez, immediately betrayed the voters, pledging alliance to the United States Government and IMF conditionalities. However, once Correa was voted in, with a far deeper political and economic understanding of the problems of the country, some serious changes began to happen, including the expulsion of American troops from the military base in Manta. As a result, Ecuador has since entered into an unprecedented period of political stability, with Correa reelected twice over.

Long emphasised, however, that contrary to some perceptions, the Citizen’s Revolution is not simply a typical nationalist and developmentalist project. Firstly, Ecuador continues to have a relatively decentralized structure of governance, but this is an orderly decentralization as opposed to the chaotic and poorly organized system that prevailed previously. Much of the efforts of the current government have been to get rid of private interests operating through the public sphere, such that all citizens receive equal treatment. There is a strong emphasis on public investment, which has risen dramatically as a percentage of GDP since 2006. This has not crowded out private investment, and on the contrary Long argued that this has actually made the country more attractive for private investments in strategic sectors. Ecuador has also implemented a Living Wage on top of the already-existing minimum wage. This was done in order to avoid the blackmail of companies sacking, or threatening to sack workers to punish the government for raising the minimum wage. Under the current rules, companies are not allowed to distribute dividends to shareholders until they pay out the Living Wage, and as a result Ecuador now has the highest real term wages in the region as well as the lowest levels of unemployment.

It has often been alleged that these achievements are solely dependent on high oil prices, which of course are now falling dramatically. However, Long pointed out that high oil prices do not always directly benefit the population, particularly in a country like Ecuador where the country has historically imported derivatives, whose costs also rise during a price boom. The Government implemented a tax reform which allowed them to crack down on tax evasion, and this also dramatically increased funds available to the Government. As a result, oil currently is only used to fund additional investments in Ecuador, but almost all current costs (i.e. wages) are covered by the tax base. In spite of the falling oil prices, Ecuador still expects to have growth levels of over 3.5% in the coming year.

In the long-term though, wellbeing in Ecuador of course depends on changing the country’s position in the international division of labour. In order to achieve this the Government is investing in a ‘Knowledge Economy’, focusing not only on access to free education (to university level), but also on quality. This has been done through the closing down of a number of ‘garage universities’, which were essentially universities which charged money in order to hand out degrees without actually providing any decent quality of education, support for teacher training, and the establishment of new universities which aim to make the country a leader in scientific investigation, particularly in the area of biodiversity. Ecuador has also developed the most extensive system of scholarships in Latin America to allow talented students to study in foreign countries provided they agree to return to use their skills to support the country’s development. Not only are these students funded, they also receive support to spend six months living abroad to improve their English before their university course starts.

In response to a question about Ecuador’s response to environmental concerns, Long discussed the country’s efforts to secure international compensation in order for not exploiting oil in the Yasuní National Park. This initiative was ended in 2013 after the Government did not receive any significant support from the international community. It was sold in the British newspapers as a trick or form of environmental blackmail, but in fact the Ecuadorian Government gained little from supporting the initiative, as it lost 7 years before starting the exploitation. In fact if the Ecuadorian Government had only been interested in its political status it could easily have begun exploiting it silently from the beginning without attracting any international attention.

The other questions following the discussion recognized the progress being made in Ecuador, as well as quizzing the Minister on specific aspects of the Ecuadorian Government’s policy with regards to international affairs, education and gender inequalities. Ken Livingstone suggested that all of the achievements in Ecuador were relevant not only for developing countries but also for the UK, where austerity is continually being rammed down the throats of the population.