The U.S., World Bank, & IMF gang up on Ecuador

This arrived in my inbox the other day and is worth a read.

November 22, 2005
IMF Continues Washington’s Harassment of Ecuador
Soren Ambrose
50 Years Is Enough Network / Solidarity
Africa Network in Action

After the most recent presidential resignation forced by
popular pressure in Ecuador, a progressive, Alfredo
Palacio, was made interim president. His skepticism about
the neo-liberal ideology has concerned the U.S. government
a great deal, especially in light of the fact that the
Ecuador is not far from Venezuela and Hugo Chavez, the one
of the Bush Administration’s major irritants (apart from
its incompetence in Iraq and at home, of course).

It is also threatening to block the desires of Occidental
Petroleum, longtime Amazon oil explorer and a good friend
of the Administration, by nationalizing oilfields. There
have been threats to exclude Ecuador from the nascent
Andean Free Trade Agreement if it does not play ball with
Occidental (which may not strike many readers as a reason
to change course).

U.S. concern about Ecuador’s trajectory seemed to find a
sympathetic ear at the World Bank, which recently
condemned the government’s move to adjust the percentage
of oil profits that is mandated to be devoted to debt
payments. That move, in light of skyrocketing oil prices
and domestic economic turmoil, did not seem outlandish to
many observers, especially since the net amount of cash
devoted to debt did not diminish. Even the IMF, which had
been the most vocal in warning against the move, did not
react with draconian steps. But the World Bank diverged
from its own customary procedures and stopped its lending
to Ecuador, reportedly because of personal intervention by
new World Bank President Paul Wolfowitz, another good
friend of the Bush Administration. As one observer put it,
the rationale seems to be that the Bank was saying that
the move meant it would not fulfill its IMF program
requirements, even when the IMF had come to no such
conclusion. As the same observer noted, this would be a
new level of overreach for the Bank.

The Bank’s abrupt decision resulted in the forced
resignation of Ecuador’s Finance Minister, Rafael Correa,
considered among the most progressive Finance Ministers in
the hemisphere, and an important voice anchoring Palacio
on the left.

All this is to provide context for the article below,
which was circulated on the listserv. The IMF’s
concerns about public spending echo those it has been
making for the last few months, though they have been
framed in an analysis of a “broadly positive” outlook for
Ecuador. That they are choosing to publicize them in this
manner, with the laughable (even for the IMF) idea that 4%
inflation could portend a crisis, suggests the IMF is
being brought into Washington’s great game.

[I havn't included the article]