WATCH OUT FOR 16 YEAR OLDS Young people that today are 16 years old were born in 1996 so when the crisis began they were just two years old and at the start of dollarization only 4, i.e. they do not experienced the suicide Ecuador, the old Ecuador, the uncertainty one, the one without hope, they began living with the dollar, with the strengthening of the family where they could aspire to have a doll, a bicycle, a TV, a house and why not become the overnight in a Mario or a Mary. And who are they? Those that born from nothing began producing cent per cent honestly, generated a capital are today firmly part of our middle class or more than that. Young people aged 16 - 18 - 20 and 22 years old do not believe anything, dollarization is here to stay, it came to work, for the future, do not let that with the pretext of blah blah blah, they want to settle us with the regulation 29 that is nothing but return to the wiles of a Central Bank that drowned us in 98 and 99 in the larger crisis. If we want to play seriously, let's go to the gold standard that forces countries to back up in gold to be more responsible; it's time "not to think of the next election but on the next generation." Moreover, we must applaud that despite the bad reputation it has today Ecuador, Mayor Jaime Nebot, in New York, has dared to hold an event to promote investments in the city of Guayaquil, thus trying to strengthen Ecuador to get our land at a point on the map.
THE GUAYAQUIL ROADSHOW - INVESTMENT & TOURISM FORUM LOGISTIC PLATFORM OF THE PACIFIC SEPTEMBER 18, 2012 IN NEW YORK
Welcoming words to the “The Guayaquil Roadshow” by Jaime Nebot.
Eng. Francisco Alarcón FernándezSalvador, President of TONI; Jaime Nebot, Mayor of the City of Guayaquil and Econ. Enrique García Rodríguez; President of CAF (Corporación Andina de Fomento)
Several Ecuadorian and international businessmen heard various presentations at the event in New York.
Conference of Eng. Joyce Ginatta; president of FIE (Federación Interamericana Empresarial) “Agents of Change: building a positive future to create jobs and distribute wealth”.
Mrs. Juanita Caicedo; Senior Vice President of Royal Bank Canada and Eng. Joyce Ginatta.
During the event a tribute was offered to Mr. John Paulson by Jaime Nebot, for the contribution made to the Junta de Beneficencia de Guayaquil.
CRITICAL ISSUES AND PENDING AGENDA Lcdo. JosĂŠ Vicente Maldonado Former Minister of Industry and Trade We have lived in this recent period in Ecuador a lustrum of extraordinary boom, perhaps as it rarely have been repeated in our republican history. The economic expansion has occurred through increased prices of our main export: oil, which has kept the economy stable and the possibility of expanding public investment to strengthen the role of the state as the main actor in the national economy. However, it is also evident that this same expansion is now facing complex challenges arising from major changes occurring internationally (slowdown of major economies) that can affect our economy; and due to the particular circumstances of stagnation of the private investment in Ecuador. There is no prospect that oil prices continue their upward trend in the markets (it may be reduced); there is either no investment and growth of our oil reserves; and, on the other hand, the competitiveness of the Ecuadorian productive sectors abroad is threatened by low productivity and lack of key trade agreements with our major markets where our production will compete with products from other countries and regions where they have permanent and privileged access to those markets. This time I think it is necessary to emphasize on these two aspects of the domestic agenda that must draw attention to all of us and which remain outstanding: low internal productivity and limited international competitiveness of our economy; aspects that, together with the disintegration of the country regarding its main markets overseas buyers and prospects of the oil market, put the Ecuadorian economy in conditions of high and considerable vulnerability. I think there is a genuine concern in the national government on the current conditions of trade deficit and balance of payments imbalances that presents the Ecuadorian economy, as well as the low numbers of productive investment. I read these days precisely various statistics, analysis and expert opinions indicating that Ecuadorian exports grew just 7.7% this year in dollar value and regarding volume, they fell by 11.9%. While imports, despite restrictive policies imposed, grew by 9.4%. The deficit in non-oil trade grew by 20% compared with the same period last year. Certainly, the external sector of the Ecuadorian economy has become a critical issue, further aggravated by the new conditions of the world economy; so the industry is demanding efficient and effective responses by the State, as well as new strategies of country's integration into the mainstream of world trade. This strategy of productivity and competitiveness and greater participation in world trade, should be an essential component of a renewed developed agenda to resume a quality economic growth (value-added and job creation) that is, therefore, sustainable and also inclusive. At present, most countries in the region are doomed to strengthen trade ties with the rest of the world; to mitigate through the same commercial trading instruments and also through large social agreements the inherent risks to a greater presence in the international trade; thus effectively promoting the inclusion of all segments of society in the benefits of a wider trade opening. We believe that it is unrealistic that Ecuador is away from this regional and global current; the sustainable development of the country requires to have among the national greater objectives a greater and more equitable access to global markets; to use trade agreements in a consistent and realistic way that best conform to specific economic sectors with export supply capacity; using their comparative advantages and continue with the analysis of the specific productive national interests; and, look where there are complementarities between the different routes of international integration. This trade policy consistent with the national reality has the primary purpose of contributing to a better quality of life for the inhabitants of the country. In this regard, I have been deeply impressed with the information analyzed by the Chamber of Industries and Production (CIP) on the issue of jobs linked to exports and that is put at risk by the lack of proper vision and appropriate understanding regarding proposals that make see the impact of foreign trade in the country's development. To highlight this extremely sensitive issue, I briefly
transcribe below employment statistics related to foreign trade activities in some provinces of the country, regardless of Guayas and Pichincha: 41% Manabi; 31% Esmeraldas; Cotopaxi 27.4%; Los Rios 50%; El Oro 29%; 39.5% BolĂvar; Orellana 49.8%; CaĂąar 29.5%; percentages of the total employment in these provinces. Further we comment that the share of exports in production in that province averages 22%. The analysis conducted so successfully by IPC, has allowed us to know precisely the effect of trade with the EU in small productive sectors of the country. It is particularly noteworthy the reference to exports of a priority sector such as the popular and solidarity economy: US$ 25.2 million total U.S. exports of its products to the European Union, representing 75% of its exports. Additionally, we agree to say that the export sector ensures the appropriate salary level, generates employment especially among women; generates taxes and currencies, it has an extraordinary and dynamic multiplier effect across regions and, through production linkages in commodity, service, storage and packing, transport, etc.; certainly, foreign trade develops a tremendous impact on all social sectors. For its part, the analysis made by FEDEXPORT in relation to the effect of a possible non-renewal of ATPDEA tariff preferences, particularly on investment in export sectors such as tuna, roses, artichokes, textiles and broccoli among other products, would be enormous and with impact in various regions of the country. According to this analysis, the blow will be greater as time passes; it analyzes that during the first three years the effects will reach US$ 254 million. The United States is the largest trading partner of the country, being the destination of 21% of non-oil exports. In July 2013 concludes the ATPDEA, so it is essential to generate stability and eliminate the uncertainties that today threaten on various productive sectors and its business relationship with that market. All these circumstances require that the State authorities, responsible for foreign trade, are mobilized very quickly to consolidate at least our historical and current commercial cluster and present export capacity oriented to our traditional markets: the United States and the European Union. Certainly it is not the only effort, it should deepen our trade relationship and integration processes with Latin American countries and also expedite trade and investment agreements with countries in eastern Asia. This new stage of integration with our main markets will allow us to jointly develop (public and private sectors), an agenda for growth and improvements in productivity and competitiveness. Indeed, we believe there is an unfinished agenda in productivity and competitiveness policies, along with the critical issue of trade policy that we discussed briefly, could correct the current vulnerability of our economy. The experience of successful countries stresses the need for close coordination between state and business, share a common vision in the design and implementation of a strategy for sustained growth and long term. In the absence of a clear understanding of the role of exports, as well as a coherent productive development policy to generate new competitive export supply and foreign trade strategy, there have been given, obviously, the results that we analyze now: the exports of our non-oil production are not being the engine of growth (the ratio is 19% of GDP, while Asian countries average are or above 60%), the economy tends toward high trade deficits and consecutive, the exports structure remains concentrated in commodities; and, there is a low degree of utilization by Ecuador of the benefits of globalization, integration and market opening. The competitiveness is based on the natural resources with a bad position of the country in this global ranking and we are still highly vulnerable to external shocks. The decrease our presence in the world trade is also partly due to the low productivity of the country, a factor that limits the competitiveness of exportable Ecuador. In this sense, complementing our insistence on a commercial policy of integration into international markets, it is clear the need to link the trade agenda of Ecuador with the implementation of a set of policies and domestic reforms to increase the quality of their international integration through improvements in productivity; so we must incline towards the creation and consolidation of a virtuous cycle that occurs between: integration with markets, productive investment, transfer of technology and knowledge, and increased productivity and competitiveness. With our vision on the development of the country based in exports – this proposal we promote and disclose constantly - we are not inventing anything new, just see success stories like what
happened to the East Asian countries (we also have our own examples in Latin America) . These countries had the vision and the ability to develop a strong connection especially with Japan and the United States in past decades, generating trade and foreign direct investment (FDI); increased national productivity through investment and technology transfer; promoted human capital and generate value; and, now they compete in the major international markets. As a result of this process held jointly by the state and private enterprise, these countries have substantially improved the income and quality of life of its citizens. For us this information is significant given that at the beginning of the sixties the GDP of these countries, such as income and quality of life of these nations, was much lower than in Ecuador and other Latin American countries. The World Bank recently presented a very interesting study on these virtuous circles between trade and productivity and what might happen in this direction with the connection of Latin America with the China marketplace. This issue (our relationship with China) may be grounds for a new article, but I would like to anticipate the opinion that in the case of Ecuador, in the terms that are currently developed our integration with China, it will not have the effect that we would like to develop the country. Actually China has limited her interests in our natural resources, there is no Chinese permanent investment in the country or technology transfer; in short, China would not be generating higher productivity to the Ecuadorian economy as if she could do it through productive investments and the opening of markets. The absence of a long-term view on foreign trade, access to markets, for productive investment (FDI) and transfer of knowledge to improve the productivity of the country, deep in our case a structural problem with consequences of reduced rates growth and development. We strongly believe in promoting a development model based on exports and productivity and competitiveness of the country; in the development of potential and complementarities between public and private sectors of the country, the right balance between stability and competitiveness, a business environment stable, removing barriers to entrepreneurship and that the model invigorate the capacity to generate wealth in society through free enterprise and creativity of the people in the exercise of individual freedom, essential gifts to the dignity of human beings. We think it is necessary to strengthen the certainty and confidence of economic agents. A model of quality and sustainable development is not one that gets short-term growth rates for natural resources; a model of sustainable development should have as a leader private productive sectors, especially those that incorporate technology, knowledge and added value to the domestic production. We have stated and we reiterate it: Ecuador has directed its efforts conversely to a sustainable model: FDI among Latin American countries represent (figures from 2011) 2.7% of the GDP of the countries in average. In the case of Ecuador, we are well below this average: FDI represents only 0.9% of GDP. Private investment was 7.401 million in 2006 and represented 80% of the total investment, now the private investment is 7481 (stagnation) and represents only 46% of the overall investment. To conclude our thinking: we believe that the external sector of the economy is in emergency and it is necessary that Ecuador adopt long-term basic guidelines, accompanied by capabilities flexible enough to accommodate the productive sectors to compete in the international context. Our thinking has always been framed within this vision of development, without other ideological considerations, only the ultimate and principal objective to contribute to a better quality of life for Ecuadorians, nor other priority than sustainability policies to develop the country.
WHERE IS THE MONEY? Dr. Blasco Peñaherrera Padilla Ex− Vice President of the Republic of Ecuador Some time ago circulated on the Internet a very interesting information about "the greatest public works that are recorded in the history of mankind." Such works are: 1) the "Three Gorges" dam, in China, which in essence is a reservoir of 660 kilometers, enclosed by a gigantic wall that accumulates a correlative proportions lake, which vent serves to drive a power generation system which produces 85,000 million kilowatt hours per year. The cost of this really amazing work, was 27,000 million; 2) the Hong Kong Airport, built on an artificial island of 12 square kilometers, which is capable of receiving 500 daily flights, cost 22,000 million dollars, 3) the "Eurotunnel" between France and England, which consists of three tunnels of 40 kilometers long, built under the seabed of the English Channel, where 600 trains circulate daily. Its construction lasted ten years and its total cost was 15,000 million, and, 4) the sea bridge "Hinhua", also in China, 36 kilometers (the longest in the world), where 40,000 vehicles can circulate per day. It also includes an island in the center of it with hotel and services facilities for travelers. It had a remarkably modest cost of only 1.682 million dollars. In sum then, these four remarkable feats of construction capacity of human beings, involved a total investment of 65.682 million dollars. Ten years ago, when public spending in our country, supported by a substantial recovery in international oil prices, reached the figure of 6.585 million dollars, even imagining that Ecuador could make investments of this magnitude, it was absolutely impossible. Now however, just ten years later, such a distant dream could be fully realized. Yes. Although it seems unreasonable to support such an assertion, the truth is that, by the grace of no "appreciable" but meteoric rise in the international price of "the blood of the devil" (as Rómulo Betancourt used to call oil), the Ecuadorian government could have undertaken and carried out, ALL the "works of wonder" mentioned above and, in addition, would have continue functioned relatively normally. If this sounds like a "poke fun", let's see the figures to confirm this: In the past five years "Alianza Pais" government has spent the colossal sum of just over ELEVEN HUNDRED BILLION DOLLARS, therefore, it would well could, after astonishing the world by building "greatest public works that are recorded in the history of mankind", have a "balance" of FORTY-FIVE BILLION DOLLARS, for other administrative and investment expenses, because that remaining expense would have been, annually, equal to the total expenditure of the last year in office of Dr. Alfredo Palacio (9,997 million). Given this overwhelming reality, there is no other thing to do but to exclaim what perpetuated the sense of humor of Doctor Vladimiro Alvarez Grau: "So, where is the money?" If the answer is that it is in the construction of roads, it should be not a few tens but hundreds of kilometers those built in the six years of economic slack ever imagined. And likewise if it is said that in the publicized investments in health, education and social development because, if they had been done properly and correctly, nor the dramatic "lines" for admission to hospitals nor the uncontrollable epidemics, they would be as it is unfortunately, a reality as painful as undeniable. And likewise the wave of children and youth who have no quota to enter dilapidated schools without proper equipment and to enter nonexistent universities. Then again it is the same question: where is the money? Someday we'll know, even if it is too late.
THE NEW PRODUCTION MATRIX Eng. Henry Kronfle Kozhaya, President of the Chamber of Industries of Guayaquil President of the National Federation of Chambers of Industries of Ecuador President of the Latin American Manufacturers Association, AILA President of the Andean Business Advisor Council
From the perspective of the economy development in the medium and long term, it is convenient to consider a change in the production matrix. This needs to respond to the fundamental criterion of efficiency competitive gain in the world market. In effect, the first objective that should be proposed for this change lies in inducing that economic growth does not depend heavily on the international selling price of oil. So a new productive matrix will initially be oriented to diversify exports and promote access to new and larger markets in the world. Not to put aside successful productions But this proposal does not mean that Ecuador has to put aside primary production which enabled him venture with relative success in exports. For example, according to Central Bank data, four major product families, i.e. banana, coffee (including soluble products), cocoa (grain and industrialized) and fish products (which include canned tuna, sardines and fishmeal), represented on average 25% of total exports in 2007-2011. Compared with non-oil exports, these products accounted for between 57 and 59% in the period indicated before. The data above are consistent with the behavior of exports. Even if they are considered before there was oil. Because if you look at the history of the Ecuadorian economy, be advised that the productions listed above have always maintained a degree of participation of the first order in external sales, and in some periods of the early to mid-nineteenth century, rubber, tagua nut, balsa and other woods, were also exportable goods, with which especially coastal agricultural production, was positioned as the largest provider of foreign exchange for the economy. This behavior of coastal production meant nothing to guide their productive vocation to overseas markets. However, it generated criticism from those who saw from their ideological concepts- as a condemned fact that exports had as protagonists, coastal agro products. Hence a number of pejorative terms were coined that placed the coastal export business as part of the "agro export oligarchy" of the coast. And if they exported cocoa, they are intended to ridicule the disgrace of belonging to the “Gran cacao era� families.
Respect the production orientation of the coast In the early years of the twentieth century, both populist regimes popularly elected, as civilian and military dictatorships, were imposed in order to end the export production. In several cases, after these proposals there were clear regionalist connotations, as warned and denounced in some measures promoted by technocrats of the Central Bank, the Monetary Board and successive planning agencies that have been created in the country. These measures were alternately from exchange control, until the establishment of quotas and other mechanisms hindering export production. Then also it was spoken of transforming the export orientation. What they really wanted was to end the coastal export production.
The background briefly outlined, serve to highlight that the projects to change what has now been called export primary production matrix, are not new in the imagination of national planners. And yet this observation, it is relevant to point out that being convenient to transform the current production matrix, this does not imply in any way, discourage the production of goods that are a mainstay of the coastal economy. These assets have generated productive chains that constitute the core of domestic manufacturing. So, around the export banana production, factories were established to produce cardboard boxes, plastic bags, items for irrigation and fumigation, transport equipment, agro chemicals, and a whole range of items. From these productive activities it has formed a significant industrial conglomerate in the food and beverage industry. The same features are found in the fishing activity, in the production of beverages, sugar mills, and other agribusinesses. All of them have created jobs, and increasingly demanding, inputs, capital goods, production technologies, and other services associated with the industry. Objectives of the new productive matrix To change the productive matrix, does not mean changing the productive orientation. On the contrary: we must strengthen its international relations and cross, to increase productivity and become more competitive in domestic and foreign markets. This, not to dabble in other productions. But the main thing to consider is that these changes will not be successful if they only express the bureaucratic vision of planners. If you have to change the productive matrix, you must look in the short to medium term to at least achieve the following objectives:
1. Apply it to promote industrialization, based on the use of the built infrastructure and under construction, in order to make it profitable socially and economically; 2. With the new productive matrix, industrialization should use natural resources, giving priority to eco-efficient processes, including energy production. In this way industrialized goods will be obtained to replace efficiently certain imports; and are able to supply, in optimum quality and prices, the domestic and foreign markets; 3. The design and implementation of the new productive matrix, shall seek to strengthen industry linkages with other productive activities, to add value and innovate them; and, 4. Improving quantitative and qualitative exports. This demands a trade policy that seeks to ensure new and existing markets. A productive matrix that only serve to guide the economy towards endogenous, is doomed to be inefficient, and fail miserably.
NIGHTMARES OF DEMOCRATIC SOCIALISM Dr. Franklin López Buenaño Retired teacher of Tulane University, New Orleans Demonstrations and violent demonstrations in Greece and Spain are daily news. The reason: austerity programs. But we must go further. Austerity is a “painful” remedy to the unleashed public spending. Let's see why Greece is in uncertainty. • They falsified its accounts to enter the euro and then continued to distort the reality, until the thing broke. • There were mass retirements at age 50. • There were 50 official drivers per car, on average. • There were 45 gardeners for a pot with 4 bushes in the Evangelismos hospital. • It has the highest fictional population of the world of people of 110 years old because the dead are not written off and their pension is collected. • The European Union has found that there are families that charge 4 and 5 pensions that are not theirs. • There are still charging pensions with dead who died in 1953, 48 years ago. • Forty thousand ladies receive a pension of 1,000 euros a month for simply being unmarried daughters of deceased officers and that costs to the state coffers 550 million euros a year. Now they will charge up only until 18 years old. • Pacemakers in Greek hospitals were bought at a price 400 times higher than that paid by British hospitals. • In Greece there are many workers who have benefited from early retirement fixed at 50 years for women and 55 years (This law was passed by the Socialist government of 1978) in the case of men belonging to any of the 600 job categories considered particularly strenuous, and among which include hairdressers (the dyes used can be harmful), wind instrument players (blowing a flute is exhausting) or TV presenters (assuming microphones cause health damage). • There are thousands of useless ministries and institutes; a lot of Greeks are benefited from it. As an example the Institute for the Protection of Kopais Lake, a lake that dried up in 1930. (1,763 Greeks are used for the preservation of the lake). • Tax fraud is massive, over 25% of Greeks do not pay income tax. • On the other hand the weight of the public sector in the economy is overwhelmingly. They have about a million officials for 4 million Greeks of active population. They pretend to work and the state pretends to pay them. • The average salary of the employees of the Greek public railways exceeds 66,000 euros per year. And this includes cleaners and other low-skilled workers. The Athens subway (almost free) collects about 90 million euros in tickets every twelve months, while the total cost of this public company is over 500 million. • The French receive in average as a pension 51% of their final salary, 40% the Germans, 41% the Americans and 34% the Japanese. Meanwhile, Greek pensioners pocketed 96% of the total of their working income.
• In the last decade, more than 300 new enterprises have been created. • Greece has four times more teachers than Finland, the country that took top marks in the latest PISA, but that overpopulation of teachers only helped them to be among the European countries with the lowest level in almost all educational tests. In Spain: The indignants fill the streets to protest the alleged budget "cuts" when there is a budget deficit of 100 billion euros (6.5% of GDP), a public spending equal to 43.7% of GDP and an accumulated public debt from 72.1% of GDP. How is the money spent? Let's consider the following: • The "poor" boys of the Spanish cinema will receive next year € 55 million in grants, while the ones of the theater will have 37. Not to mention the 56 million euros that costs the Institute of Film and Performing Arts. • The Youth Council, an institution that serves to place some of the youth members of different parties, will increase its budget by € 300,000, with a cost of 2.6 million. Not to mention the 26 million euros, that on the other hand, will cost the Youth Institute. • 539 million euros are devoted to the restructuring of coal mining, which has been restructured thirty years without ever having finished it, in addition to the € 45 million devoted to the "alternative development of the coal mining regions", and € 457 million in subsidies to mining. • Political parties, as they need money like any citizen, will pocket € 63 million in direct grants from the Ministry of Interior. • It will be spent a little less in preventing pollution and climate change than the previous year, only 49 million euros. • The Spanish TV, the imperative press organ that all governments need to indoctrinate citizens in order to become good men, will take € 292 million of our taxes. • To express better the activity of Mariano Rajoy, the budget for "Media Coverage" of the Presidency of the Government spends from 17 to 60 million euros. • In development cooperation, a budget heading with which syndicalism courses are funded in Egypt to sexual liberation seminars in the Bolivian highlands, the PP will spend 519 million euros. • In active employment policies, that euphemism designating measures that cover, among other things, the black hole of the training courses for the unemployed, the government will spend 3.765 million euros. And all this after announcing programs of tax "austerity"! And, in Ecuador? There are many and very well, thank you. 455,000 receive salaries from the treasury - 210,000 public employees and 245,000 members of the armed forces, police and teachers - a significant number of them line up in “plosh” restaurants in Quito (it is estimated an expenditure on salaries of 8,500 million in the non-financial government sector). Bureaucracy expenditures exceed revenues from VAT and income tax. Subsidies exceed 5 billion, only gas surpasses 2 billion dollars. There are more than 1.2 million Ecuadorian households that receive 790 million for the bond of poverty. What will happen when revenues are insufficient to cover these costs? Will they try to put the pensioners and the poorest in deep water by de-dollarization? Go back to the sucre currency would be to return to an age already surpassed by Ecuadorians. Because that would be returning to inflation, the cruelest tax invented by those who believe that “sovereign” monetary policy is a solution and not a problem. Would there be “outraged” Ecuadorians as Spanish and Greek? Would they continue to blame the party, the old bigwigs, exiled bankers or companies that do not pay taxes as Alvaro Noboa? Will the new old bigwigs go free? Those who made lucrative contracts with the State? Those that destroyed
(In exchange for 10 or 20%) the doubtful loans of the Development Bank, National Finance Corporation (not to mention those of COFIEC) and the spending of almost 40 ministries? Those who turned a blind eye to allegations of corruption, abuse of authority and flagrant violations of human rights? My answer is yes, they will fall "standing". Maybe someone may be going to jail, but it will be a small fish, the big ones, those who moved and will move to “Pelucolandia� (including Miami) will remain cool as a cucumber enjoying their "well-deserved retirement." It will happen the same when the Soviet Union collapsed, the Communist Party members took advantage of the collapse to appropriate the state assets and organized gangs that continues preying on the Russian economy. Maybe then someone will remember the long nightmare of the Socialism of the XXI Century.
KISSES TO RAUL AND TO THE TODAY AND YESTERDAY CULPRITS OF THE CUBAN DEBACLE? Roberto A. Torricella It has come to our hands a letter of August 2, 2012, making a "Flash Appeal for Reconciliation" with the Cuban misgovernment where a group of people, including some known respected and honored Cubans in exile, want to start "to give hugs� to Raul Castro and current members of the Castrocommunist regime of Cuba, guilty of thousands of murders over half a century. We think we understand their intentions but we cannot dock with and accept that we embrace many people of the communist system, which system is essential to eradicate –not to reconcile- Cuba, and much less we can "share" with largely responsible of our debacle, as many directly or indirectly, have their hands stained with blood of thousands of Cubans and today, still, they are wet. We cannot understand how many exiles who were big culprits and direct taxpayers of the rise to the power of the nefarious regime that succumbs Cuba today -and some still continue to "justify" to appease his conscience- and because of this we remain in exile, advocate for this reconciliation and possibly supported by alleged "help" from foreign governments who were largely responsible for what we have today - especially when "yesterday", that there was no repression (except the one invented and still repeating to cover their mistakes and justify the terrorism that they promoted and help up) nor today's crimes, they never had a second to depose unthinking hatred that seized them and have done something like what they now propose. Obviously, that was due to the advanced age of some people with Alzheimer and principally due to personal interest $ $ of other "not-so-old", it makes them to use terms like: "You need to know and learn from the past not to repeat it" and to proclaim all Cubans here and there: "to avoid violence, bloodshed" and ... take note of this: "particularly those directed against the defenseless population." Was not just this last the same they did during our Republican era? And apparently they have not learned from past experiences and neither of experiences lived until today, both in Cuba and those occurring elsewhere, in more than fifty years we have been in exile. Those same elements they ask in clauses 1, 2, 3 and 4, were in Cuba during the Republican era and they, due to the hatred blinded and clouded their analytical skills (and even for many of the same reasons which now require reconciliation) were the proponents of breaking them, creating a state of chaos that plunged Cuba even that today they try to justify blaming other circumstances. But despite they try, they cannot rebut palpable evidence and confirmed impartial historical evidence mainly confirmed when you have them in hand. We keep feeling twinned with many Cubans who signed that fateful document since, after all, we are all Cubans longing for the same purpose. They may be various the strategies to achieve it, but definitely NEVER hugging and kissing the enemy. But regarding those who signed and were wrong, we understand that they don't have Cuban blood on their hands, directly or indirectly, and they only try to reach the ultimate goal of all, although they propose an evicted method by a large majority of Cubans. Again two great truths that are lived and tested realities: 1. Freedom and democracy cannot be granted to anyone. Both have preconditions, preconditions, and even nations that are free and democratic today, it took them centuries to get there. It is easy to export the symbols of democracy -constitutions, elections, parliaments, and all other items, but you cannot export centuries of experience and development that enabled these institutions to work.
2. The danger of Cuba was not Fidel Castro nor his July 26 motion. It was most elite citizens, middle class and professionals, with culture and heritage, that blindly and hate supported a gangster of known murderous provenance. It will be much easier to rectify the damage and destruction caused by the Castro tyranny to feed common sense and rational judgment to unthinking citizenship, fanatical about having this type of criminal as its undisputed leader when, in reality, in Cuba it was not required nor had the need for a bloody terrorist revolution. The problem is much deeper and far more serious than Castro since he is a mere tool of international communism and symptom that conquered us and destroyed Cuba. Placing the blame solely on the Castrocommunism should not serve to blind us from the vast brotherhood of ignorant who made him a prince. The republic will survive Fidel Castro and his henchmen, but it is less likely to survive a multitude of irresponsible fools as it became their Robin Hood.
THE ECONOMIC POWERS
Dr. Manuel Hinds Former Minister of Finance of El Salvador We are starting to see articles in the economics publications saying that the alleged monetary powers that would displace the dollar and the euro as international currency (the Argentinian peso, the Brazilian real and other Latin American currencies) are under attack and falling like stones, forcing their central banks to try to intervene, useless so far, to keep them from falling (i.e., to prevent further depreciate). The way they do is to give the public what they need and want: dollars. In the process, central banks loses international reserves, in a process that I have explained in these pages at least a dozen times. Some countries are worse than others. In Argentina, people have already completely lost confidence in the peso and demand that all should be paid in dollars, especially rents, houses, cars, and anything not consumed immediately. The result is a huge shortage of dollars that the Central Bank cannot meet with the pesos that emits. The government has responded by imposing draconian controls: all dollars entering the country must be given to the Central Bank; it is prohibited receivable and payable in dollars; there are dogs trained to smell the ink with which to print the dollars to keep people from taking them out of the country; neither traders nor industrial importers manage to get all the dollars they need. The government tries to downplay this crisis with a fallacy, saying that only 12 % of the population uses dollars. This is an absurd answer. The 12 % import dollars (exporting, requiring loans out of the country) and exporting them (importing things and paying off loans and assets acquired elsewhere), but the entire population uses them when buying anything imported or something containing something imported (i.e., all goods and most services). Still, the entire population uses water, although only a few take it out of the wells. In Brazil, it's not that bad, but the growth rate is getting lower, and the industry is in crisis. Industrial production is falling. In the first half, the country grew by only 0.49 %. The currency, the real, has begun to depreciate rapidly. The central bank is using a portion of its reserves to fill the high demand for dollars and the fall in the demand for reais. The same is happening in other countries that only months ago, and for several years, were known as economic powers of the future, with coins that were much stronger than the dollar. Latin America seems to be approaching another crisis like the one she has had so many times in the past, in which currencies are down, inflation is going to heaven, and economic activity will crash. What's going on? The truth is that no one should be surprised. Latin America never had the chance to be the engine of the world economy. For this it necessary to be a leader in technology, be inventive, have all the facilities of an industrial economy, have support from major universities and knowledge institutes. What America had in recent years was the pure luck that the prices of commodities rose, because the United States and other developed countries were spending more than they produced, and China bought many of these products to process them and sell them to those countries. Now, these countries are in crisis, spending less, the price of commodities is collapsing, and Latin America is racing toward a crisis. When will we learn? The development is education, not luck. There are no shortcuts.
LET'S RECOVER ONE'S MEMORY I think it's time to recover one's memory. On April 8, 1999 it was held in the City of Guayaquil 1999 the largest civic and pacific march that our history remembers, not bankers or politicians, but the civil society itself where we asked for an agenda for change; at that time, Joyce Ginatta, as president of the Small Business Chamber of Guayas named it as the seven coherencies: 1. Refund of frozen funds 2. Decentralization 3. Coast Rebuilding 4. Reactivation of the social productive sector 5. Modernization and downsizing of the State 6. External debt restructuring 7. Curbing the abuse of fuel prices We cannot hide when 150,000 people went out in the streets and civic and peacefully demanded their rights to become citizens. Then in September 2003, they dared to make dirty the black ribbons, saying that the march was for banker Aspiazu; this affirmation was unrealistic because the one for this banker was held on March 22, 1999. We cannot accept that the black ribbons become dirty, I repeat on April 8, 1999 was held the black ribbons march, that as you can see in the various plots, at that time, there were neither bankers nor politicians; there were people of Guayaquil who were born or not in this city; copies of my publications prove my assertion. Until when do we misinform, demonized, confront and divide, please: GUAYAQUIL FOR THE NATION!
ARTICLE TAKEN FROM THE PYMES MAGAZINE, MARCH-APRIL, 1999 EDITION
ARTICLE TAKEN FROM THE PYMES MAGAZINE, MARCH-APRIL, 1999 EDITION
TRANSLATION “MARCH OF THE CREPES� It is obvious that there's a need for a change BACKGROUND After seven months since the present government took the country's destiny, the social economic outlook was becoming increasingly alarming. The State continued sheltering and feeding a largely inefficient bureaucracy, consuming much of their increasingly squalid income. Despite having reached a final peace agreement with Peru, the country continued to be subdued. The private company that historically has generated wealth for the nation, was virtually paralyzed, and some entrepreneurs were obliged to close their businesses and others, in the best-case scenario, reduced costs and staff as possible. As a consequence of this, unemployment rose sharply and in turn crime rates also soared. The recession we live reached its summit, when in addition to all existing problems, on March 14 this year, the Executive Order No. 685 was issued by which the country was introduced in the "freezer", by reprogramming-freezing the deposits kept by Ecuadorians in the national financial system institutions. So serious were the consequences of these actions that not even the export sector was saved from being affected, being suddenly unable to dispose of their operating capital. Due to this internal turmoil, the Government argued that the measures taken in general were absolutely necessary for the country, further arguing that it was essential to have a hundred percent level funded budget. Some meetings and discussions took place between the government authorities and representatives of the productive sectors of the coast, which unfortunately, did not reach a final consensus, mainly because they insisted that the solutions to the country would not occur by simply creating or raising taxes, but on the contrary, if it is true that the tax issue was important, it was essential to adopt a new economic model, given that the current had collapsed. APRIL 8 CIVIC MARCH With this background, and given that the different points of view of the various coast unions were clearly discrepant with the clearly fiscalist position of the executive, the representatives of the productive sectors of the coast, organized the March of the crepes for April 8 this year. The response and the support received in such march were apotheosis, especially considering the fact that there was no organized movement, but on the contrary, the human presence was markedly spontaneous. The more than 150,000 people belonging among others, to unions, social and class organizations who fervently paraded along the 9 de Octubre Avenue up to the Governor's building, constituted the authentic spokesmen of an ideal of change. The black crepes symbolized the mourning affecting the country and especially the city, considering that an absorbent and pitiless centralism slowly drowns them. Upon reaching the Governor's building, representatives of the productive sectors of the coast, submitted a document containing the agenda for change, which Eng. Joyce Higgins, President of the Guayas Chamber of Small Industry , aptly named as the seven coherences, excelling in it seven fundamental points: 1. Recovery of frozen funds 2. Decentralization 3. Coast Rebuilding 4. Reactivation of the social productive sector 5. Modernization and downsizing of the State 6. External debt restructuring 7. Curbing the abuse of fuel prices From the synthesis of the reference document it is evident that the subject under discussion does not go just for the tax, but rather extends to specific alternatives, to address the crisis in a comprehensive way.
CONCLUSION The March of the crepes, which was characterized by civility and patriotism of all citizens who participated in it, was an historic event for the city and the country, as it represented a voice of protest against the government for the delay in making urgent decisions. The productive sectors of the coast will remain vigilant of the government's actions and not give up on our ideals. The fight is just beginning. SUMMARY OF THE FACTS MARCH OF THE CREPE February – Directors of the Chambers of Production of the Coast met with members of CONAM (National Council of State Modernization) and the same day they held a meeting with representatives of the Ecuadorian Customs Corporation. March 11 - Press conference given by the Presidents of the Chambers to present its position on the crisis in the country. April 6 - Press conference offered by the main Directors of the Chambers of Production of the Coast to present the country its proposal for change. April 8 – “March of the crepe” and formal delivery to the Governor Guillermo Lasso M. of a proposed “Agenda for an urgent and profound change that the country needs”, prepared by the production sectors of the coast. April 9- The presidents of the guilds and chambers of the coast met with the President of the National Congress, Juan Jose Pons Arizaga and submitted him the document "Unconstitutionality of the Bill for the Reforms of Public Finances." April 14 - Introduction of the President of the Republic to the country. April 22 – “Closing activities for 24 hours” organized by the Chambers of Production of the Coast..
Article taken from the magazine Mipymes, September-October 2003 edition
LET'S DON'T SOIL THE CREPES! The great deeds vindicate populations. Therefore, civic acts cannot be soiled. Is not enough for the new Ecuador to be rebuilt on time and that distortions begin to be changed by opportunities. It is also crucial to begin to honor truth. This is why you need to clean something that is being soiled. Historical events has occurred in the country which in no way can be circumscribed to a city or a province, but due to its importance they belong to Ecuador. One was the March of the Crepes, where 150,000 Ecuadorians took the streets of Guayaquil to enforce seven necessary and urgent coherencies in order for the first time in the country we began to be citizens and stop being victims. The seven coherencies we demanded were: 1. Recovery of frozen funds 2. Decentralization 3. Coast Rebuilding 4. Reactivation of the social productive sector 5. Modernization and downsizing of the State 6. External debt restructuring 7. Curbing the abuse of fuel prices The March of the Crepes was a pacific, civic and non-political event that took place on April 8, 1999. Unfortunately there are malicious individuals seeking to distort the truth by minimizing the importance of this historic event confusing it with other events (such as the march that took place on March 22, 1999), that could ever be compared to the high civility and dignity that characterized the March of the Crepes. Ecuadorians who really want to raise the flag of freedom and truth in this country for democracy to prevail, can review the newspapers of the time (that we reproduce on the next pages), to learn about the reality and do not let anyone distort at will. We cannot accept that they soil the crepes. In order to clarify and vindicate the facts, I would like to reproduce the editorial and the two pages of the Pymes magazine of March-April 1999, edited by me as chair of the Chamber of Small Industries, which document what was the March of the Crepes. It is important that Ecuador be united, we cannot keep holding individuals who seek to divide Guayaquil and Quito to keep throwing trash to keep us away forever. They want passion rule over reason, because they know the day that we Ecuadorians unite to this country, nobody will stop it. The differences politicians or leaders may have among them, is not incumbent to this publication. What interests us is to rescue the importance of an event in which 150,000 Ecuadorians took the streets, across regions, who live, work or participate in Guayaquil, and they defended the whole country. The truth above all. That's part of starting a new Ecuador, it's part of an effective anti-corruption campaign that will allow us to build the positive Ecuador we all want to have.
HEADLINES OF THE MARCH OF BLACK CREPES We keep on marching….Until the government changes! Wanting to change manifestation - Today we will have the March of the Crepes - To be listened… - To be taken care of…….. - For the government to change! - March to demand changes - The Change - In order for the government to change we are going to close for 24 hours for production and employment.
PATRONAGE SYSTEM Eng. Giovanni Ginatta Executive Director of FIE This word when associated with the policy becomes "political patronage". According to Wikipedia the definition of political patronage is: "Political patronage is an informal exchange of favors, in which political office holders rules the provision of benefits obtained through their public service or contacts related with her, in exchange for electoral support. In a patronage system, the power over the decisions of the administrative apparatus of the state is used for private gain, the sponsor- either directly an official, or other person endowed with enough power to influence officials- makes decisions that favor their customers, and that these outweigh the perpetuation in power of the officer concerned or its environment. The relationship can be strengthened by threatening to use that same decision ability to harm those who do not cooperate with the system. Is paradigmatic, in this respect, the usual relationship between the major private and commercial media and the major parties close to any of the major bodies of power, particularly characteristic of consolidation or systems with strong dominance or predominance of bipartisanship situation. In general, patronage systems are where the need to quickly integrate a large number of participants to a political system without organizational tradition, leads to the development of systems of informal mediation between state action and the needs of communities." Is the patronage system a new practice? I think definitely not. This has happened in varying degrees in different parts of the world and at different times. What determines the degree of their existence and dominance? I think the answer is in the level of institutional development of a country, the level of legal certainty, it evolved of its democracy and the degree of freedom for different civil society actors can report, claim, noting these abuses of power. In essence, this patronage system proliferates further in authoritarian societies with high concentration of power. The funny thing is that today the patronage system abounds on the planet even in countries considered as developed. We are mistaken if they believe that it is abundant only in Latin America or Africa. No, let's look what happens (and it has been happening) in southern Europe. Let's consider a case in Italy. To cite a current example, in the October 9th edition of the International Herald Tribune there is a story entitled "A jobs-for-votes culture swallows EU cash in Italy". Once translated it refers to cases of "jobs for votes in a culture that swallows cash of the EU in Italy". It is interesting to see that this country considered among the 10 richest in the world, has the same vices that many of the countries in our region. The story refers to the case of the A3 motorway in Italy which was begun to be built in the 60s and until now it is not finished yet. It's a third-world story of a public work that never ends at the convenience of the politicians in power, not only for acts of corruption involved in construction (fees charged to contractors), but because this has served to employ thousands of Italians over the decades, but in fact many have not put a single stone in the construction. Along the 480 km of this road that begins just outside Naples and ends in the central area of Reggio Calabria, there are a large collection of absurdities in the design of the road, areas without high-speed rail, obstacles in the pathway, reduced number of lanes, unfinished or failed tunnels, etc. It is said that nothing exemplifies Italian state failures that this road. It summarizes all evil such as corruption, slowness, bureaucracy, interference by the Calabrian mafia, patronage, etc.. The EU funds that are used to finance public works have been abused and misused in southern Italy. It is said that from 2000 to 2011, Italy received more than â‚Ź 47.7 billion for infrastructure. Spain received â‚Ź 82.6 billion and Greece â‚Ź 38.9 billion. However, if you compare Spain and Italy, in the first case there is plenty of evidence that at least Spain substantially improved its network of fast trains, roads and airports (sometimes too much) but little is palpable in Italy. For some, the fact to delay these works means keeping this resource for corruption and patronage of votes for jobs. Now, the technical government of Monti has as a challenge to correct these distortions despite having deep roots.
I wanted to put this example to show that these atrocities have occurred not only in Latin America. The age of the white elephants comes and goes in our country according to the cash flow of our national treasury. When there are good times because of the high price of oil, we think we are a world power and are dedicated to invent different majestic ways to spend the money and go into debt. Some works are necessary and expected, but others are demagogic or patronage. All this is based on the political game of patronage that nourishes a kind of "vote buying" although it is not always what is best for the country's future. But is it the patronage game a good strategy to stay in power? For now, the evidence is positive. Let's consider the recent case of Venezuela. Assuming that the elections were fair, the current President Chavez won with nearly 55%. While it reflects a downward trend, it is impressive to maintain these levels of acceptance after fourteen years in power! Apparently the Venezuelan people do not fatigue of his speech and of a presidential model that revolves dangerously around the strong personal image of a President. Venezuela objective figures do not reflect a good management of the economy, especially when view in light of the large amount of money that has entered the country due to high oil prices. Venezuela has one of the highest inflation rates in the continent, currency problems, lack of production (about 70% of food is imported), high rates of crime and unemployment. Furthermore, in a socialist model, of high spending and high government intervention in all aspects of social and economic life of the population, there is not important evidence of poverty reduction. So, what keeps President Chavez alive in power? Patronage. An apparatus of grants, gifts, bonuses, missions, aid that are inefficiently spread across the country. Also a model holding a mass of employees and public servants living from the system and that constitute a veritable army of defense of the Chavista model. This model has dangerously divided Venezuela into two countries: the ones who live of the system, that will defend it to the hilt and others who live off the system and they know that this model only holds in the high oil prices. What will happen when the oil down? How does a false state of well-being dismantled after 20 years of living it? It is a complicated task but unsolvable when one day the model falls and a successor has to change things. See the case of Spain, now that you have to pay off the accounts and finish partying, no one wants to do it and societies resist change because they do not accept this new reality. In the case of Ecuador, are we experiencing a wave of sustained patronage? There is evidence that suggests yes. On the one hand there is evidence that public employment has grown. It's not a secret that the number of Ministers, Secretaries of State and numerous public institutions has increased. Moreover, for the first time in the recent history of Ecuador, it is easier to get an initial job for a young (man or woman) recent graduate of University in the public sector than in the private and also with better pay. This is not necessarily bad, but the question is whether these positions are justified, if they are really productive jobs for the society or whether they are part of the fabric of patronage to have a base for loyal people and committed to the regime in electoral times of need? Another possible evidence of the growing patronage is the level of health care spending, levels of subsidies and other support. At this point I get into a rugged field because the current regime does not only intellectually defends his "countercyclical" model of increase of public spending, but uses it as propaganda to show frequently the social spending growth compared to previous presidents. Nobody in their right mind can question to improve health services, education and security. No one can question as to improve the road network in Ecuador. What we can question is the efficiency of spending, prioritization and sustainability. Especially when the model, something like Venezuela, is based on an extra activist economy and not in one of building a productive and export development. Like the case of Venezuela, this model is only sustainable while there are high oil prices (after copper and gold). But why these patronage models remain? Very simple. The basic needs of the population and level of education does not allow them to reflect on whether the model is good, bad or not sustainable. When a father/mother has to worry about basic needs of his family, as food and primary health, the rest has little or no interest. If these people feel that the current president is giving real things and
services that exceed what they received before, the rest is story. That family does not care whether the model is sustainable and does not even care whether or not there was corruption or surcharge on a particular public work. What matters is to have it and that gives votes. A clear example of this is what has happened in the recent invasion slums in the city of Guayaquil. The current government has recovered lost votes in the city with a clear strategy of support and services to these highly populated areas, of high levels of marginality and precariousness. But what can be wrong serving those Ecuadorians and because of this win their political loyalty? Is not rather what politics is about? To serve and thereby win votes in elections? Of course that's the point. Beyond paraphernalia of the new inventions of citizen participation and social participation, satisfied people go to the polls and vote for the one who serves them. This has been the case of the recent City Halls of Guayaquil and surely it will be repeated in the next election. The problem with this equation is whether the perception of the population for these services is linked to the future. Are we milking the cow sticking her to the point of leaving her squalid and tuberculous? Or can we maintain these levels of spending in the future? Are we building a country for the future or do we have to go on living the story? The underlying problem is the above. I refer to the maturity of the institutions, the quality of legal certainty, the proliferation of civil society organizations to participate and comment, to the separation of powers and the true freedom of expression and communication. Who comments now about spending quality? Who analyzes? Who calls for changes? Who asked for more information to better understand spending priorities? Each time they are fewer and fewer. Unfortunately our precarious is our worst enemy; we are poor and we accept what is coming. Before I had nothing, now I have little, but I'm better and if more comes, it will be welcome. Why should I care about details? What can I lose? There is a latent danger in this equation. In this formula of lack of detail interest, we may be losing a lot without realizing. Do you remember the famous story of the frog that is submerged in water that is slowly heated? Unlike the case of the frog that is thrown to a pot with boiled water, the frog in the pot whose temperature is raised gradually, is gradually getting used to the point that she does not realize or react. Possibly when she realizes what is happening, it's just too late to react and get out of danger. In the same way, the countries subject to populism and patronage may slowly be losing more than they earn. The population, happy of an apparent and growing welfare, could be granting liberties. Those liberties are precisely which are elementary to fight, to defend rights and question issues denying conformity. If we give freedoms, if we allow the concentration of power, if we allow to shorten or abridging the freedom of speech, if we allow laws criminalizing all, if we let that too discretionary laws are imposed, if we allow to control all branches of government , how can civil society express themselves and fight future issues on which you disagree? In addition, much was talked in the past for the right of minorities, for respect for diversity and different ways of thinking. This patronage and populist democracy advancing in Latin America, how would it respect the one who thinks differently? We hope that in the case of Venezuela, the next six years, they consider and respect 45% of the population who are looking for a new development model. We hope that in Ecuador, at the threshold of a new election, government models be established to include in their work programs also those who did not vote for them. We all have something to contribute. We hope to have governments of reconciliation and not vindication.
OXY CASE: CREDIBILITY, TRANSPARENCY, A GOVERNMENT AND SOME LEGAL PERSONS ARE IN STAKE Eng. Rene G. Ortiz* Is currently a renowned international consultant in energy and investments and was Secretary General of OPEC (Organization of Petroleum Exporting Companies) and Minister of Energy and Mines of Ecuador
The tendency for handling government-company relations, when business activities are conducted by governments, is hypocritical and is hidden in the high level of impunity surrounding the actions of governments and the lassitude of the contractors to meet their goals "at all costs" and at "whatever it takes", RG Ortiz, Petroleum Industry Policy, National Polytechnic, September 2012, October 5, 2012. RELATIONS GOVERNMENT - COMPANIES It is often said, with axiomatic courage, that contractual relations - by the simple fact of being legal (these are protected by laws and regulations) are effective fledged, credible and transparent. In practice, the "law of parties" - contracts - become a kind of reference line, as a baseline, above which the parties erect commitment, and mutual trust to build and carry out the contractual relationship to fulfill the goals and objectives previously agreed by the parties concerned. The One what the law requires and permits, and the other, everything, except what the law prohibits: The public official can only make what it is required by law. In contrast, a natural or legal entity can do everything except what the law forbids. Then, a first conclusion of a contractual relationship is that both commitment and trust become the two cornerstones for building a relationship. Curiously, the two concepts - commitment and trust are neither law nor regulations, but a moral and ethical principle of doing good "do it right" things. That is, for one party, the full responsibility to do only what is written in the law; and to the other party, all the freedom to do things and achieve contractual goals, as permitted by law. It rules, prohibits and allows The Rule of Law is built - every day - when a nation is governed by laws that rule, permit and prohibit; where the differences, disputes, breaches, violations and other crimes are solved through the administration of regular justice. Also, there can only be a Rule of Law in a democratic society where the independence of the three main functions of a state prevail, namely, the legislative function (represented by senators, deputies, assembly members, etc., freely elected by the people; the executive function (with the Head of Government at the head); and, the judiciary (armed with judges, police stations and courts), as a guarantee of building a democracy. That is, the Rule of Law has to be (like Caesar's wife that not only "has to be Caesar's wife, but look like" Caesar's wife). In this context, it has been developed - throughout history - an increasingly interconnected world, more connected, more interdependent. Now it is called "globalization" to denote that on this planet there are billions of goods and services that are bought and sold on the world market, but that in one way or another these goods and services contain parts and pieces, thoughts and inventions that come from manufacturing and development of different countries and that are assembled in one location. Moreover, these goods and services - already assembled - still could be the part of another assembly in another location in the world. Therefore, the international bureaucratic jargon has called these entities - individuals and corporations - with names such as multinational and/or transnational. However, in some cases, even the nationality of the parent body could be located off-site that originally gave birth, but that
globalization (as well as other historians call it) of their activities makes them appear else according to a multiplicity of business conveniences. It is true that the oil industry has the most fascinating history in the world of international business and of course due to its exploration and production is related to a finite natural resource. This means that – in the time according to existing practices and with technology available – it tends to be scarce and could even run out someday. This industry is also surrounded by many legends and myths that have been collected in the best way in the famous book: The History of Oil: The fierce struggle for money and power, written by – Daniel Yergin, winner of the 1992 Pulitzer Prize -,a distinguished friend of mine. Politics and the "political manipulations" of stakeholders discredit Ecuadorians Likewise, for Ecuador, it is not surprising that since 1895 it has been a recipient nation for foreign investment. Although it should be mentioned that one of his more "sad and painful" political characteristics, amply recorded by history, has been one of the countries with the greater instability of their governments, dishonorable qualification. It is precisely in one of those historical moments when the famous Alfaro, in its report to the Congress in 1909, said, paraphrasing, "... / .. the political instability has conspired to prevent Ecuador to have more investment and more agreements with foreign companies to exploit 'a source of wealth', oil in the Santa Elena peninsula... / .. "Then, now and always, is in these historical moments “in no time at all” when are forged the most ignominious corruption - disguised by impunity for offenders with "white collar" - that dishonor Ecuador and place it among the "blacklisting" of the social ills of the world geography. OXY: passing through the contractual, legal and juridical technique and its culmination by "Manichean politics" It is impossible to separate the today's OXY case, from his immediate predecessor, the "Oil VAT". The idea to pretend to ignore, in many analyzes and opinions, the very close relationship between the " VAT and Expiration" - for those accustomed to entangle even more the "political tangles" that to disentangle them - would be like leaving the outlaw without their mentor, known as the "mastermind", even though this "intellectual" qualification annoys and many people is uncomfortable because of value it as "intellectual" the offender of white collar. The "oil VAT" is solved by the SRI "negotiating" in 2004 some rebates to be returned with some oil companies - as established by the law (Art.65 of the LRTI) - a 69% or 71% of what the tax administration had illegally detained since April 2002. Other oil companies operating, advised by their lawyers, took the option to litigate. A discrimination lawsuit was brought to international trial, with the UNCITRAL rules, by the OXY operator against SRI. Other similar claims were also raised, by other oil operators, who were later waived according to their own convenience. To make matters worse for Ecuador, a legal reform Congress passed enshrining "discrimination", as alleged by the oil operators, against oil taxpayers because they earn much, to separate them from other exporters, violating another principle of foreign trade that "countries do not export taxes." "What a legislative wisdom, in taxation and at the worst time." An arbitral judgment, verdict of an international arbitral tribunal, of the "VAT Oil" case vindicated OXY and sue Ecuador, i.e. SRI, to pay-back all the VAT paid by OXY, illegally held by SRI. The appeal of the Attorney General, i.e. State attorney, did not wait. A Court of the Queen of England, receives the appeal of the Government of Ecuador, through the state attorney and after a while - with massive spending to international lawyers - the English court resolves to ratify the actions of the International Arbitration Court, which adjure SRI to return and pay OXY their salaries. Not happy with the second negative, the state attorney, uses another instance - within the British Justice Administration - called The Lords. To note that this judicial body is used only when there is evidence that could harm directly to the British people. It is difficult to understand the reasons that
could induce the Attorney General associating a discrimination issue originally litigated in Ecuador, with potential damage that could be inflicted on British citizens. The end of this litigious and costly path, has been that the Government of Ecuador - in 2008 finished the case of "VAT Oil", returning and paying to OXY more than 100 million US Dollars, including legal costs. In the interim, the attorney of Ecuador, the Attorney General of the State, having been subdued due to the loss of the trial on the "IVA Oil", together with a number of leaders of public opinion of labor, social, political, education movements, etc. etc., forged the OXY case to declare the expiration, termination without compensation of the Contract for Exploration and Production of Oil and the confiscation of Block 15, operated by the same oil company. There is, in the thousands of pages of evidence, the Petroecuador report that, after a long analysis of the contract of Petroecuador with OXY, its ends by noting that both the alleged transfer of 40% of OXY rights to the Canadian company ENCANA (AEC) as technical violations alleged by the State, had not produced any injury to either Petroecuador nor to Ecuador. The judgment for OXY ordering the state-Ecuador - was to pay 1.7697 billion dollars. It is OXY that sue the state for the violation of the Bilateral Treaty of Investment Protection between Ecuador and the U.S. The Ecuadorian State - locally – accuse OXY of violating the contract but never presents the lawsuit in any national court. Accuses but do not sue! It seems that it is incomplete as incomplete are thousands of cases of public corruption for which Ecuador has earned the title of "country where impunity prevails" Nor Ecuador puts his referee according to the ICSID rules. One of the litigant parties puts an arbitrator, the other also puts an arbitrator and between the two appointed arbitrators they proceed to appoint a third arbitrator to integrate the Arbitral Tribunal, as stipulated by the rules. The CIADI, according to the internal rules, appoints the third arbitrator and the Tribunal is constituted. The ICSID Arbitral Tribunal, the International Centre for Settlement of Investment Disputes, of the World Bank Group resolved: • The Ecuadorian State has violated the Bilateral Treaty of Investment Protection that was freely signed between Ecuador and the U.S. This is very serious because it affects the national honor. However, even if the Court had not requested it, it also rules that: • OXY, has breached the contract. This is serious, even if such an act of the company has not caused any injury to Ecuador as it is laid out in the internal report of Petroecuador on the analysis of the contract and that should form part of the case. Both sides have committed violations of legal statutes governing their relationships. One is a serious violation, OXY case, but the other is very serious, it is the case of Ecuador. For that reason we can say that the judgment is fair. It is right and the Court is doing justice. Here you cannot apply vulgar and capricious accusations since they are out of place. This has been given justice. There are no sold arbitrators, no anti-patriotic, no enemies. There is only one people injured in his honor by the politicking malpractice. The people is the one that "pays the consequences". The government of Ecuador - in a matter that has no credibility either local or international, as the legal – is not morally qualified to claim and punish to the full extent a supposed, contractual violation and proceed to appropriate approximately 14 billion dollars, which is an estimate of what the Government has benefited for taking the operation and production of Block 15, since 2006. It is
in this context that the Tribunal resolves admonish the government of Ecuador to pay OXY USD 1,769.7 billion dollars. To extend the trial, considering a motion to vacate, is only to lengthen the execution time of the judgment, enlarge the amount of compensation and prolong the pain of a people humiliated again by bad governments. It is not worthy!
WHAT HAPPENED WITH THE RIGHT IN ECUADOR? Abg. Fernando Rosero Rohde @fernandoroseror I was to begin an interview with an old friend, who has a very tuned nocturnal space in one of the most iconic radio stations in Guayaquil. The symposium focused on the national scene and obviously it could not be left aside issues like Assange asylum, the lack of an impartial justice, the high levels of crime and insecurity in which we live not only all people of Guayaquil but all Ecuadorians. Within this framework I said that Ecuador needs a good right-wing government, a government that does not see the a large, medium or small entrepreneur as an enemy but that he treats them as an ally: an ally against unemployment and misery, a rightwing government that toughen pain, reforms comprehensively, but from the heart, our inept and corrupt judicial system; a right-wing government to defend freedoms, protects and guarantees them, a right-wing government that open the country to foreign investment, that attract fresh and permanent capitals, that inject credibility and security levels to the foreign investor. When I finished my speech I became aware, by the interviewer's face and the people who was in the cabin, that something went wrong with my speech. They told me that the right is dead and that the people repudiates it; that now the left dominates the national political landscape and that the political power struggle is between the fractions from the left which have been divided between the "lights" or more radical, but that the people wants the left. I do not know if today politically is suicidal to say that one belongs to the right and believes in the freedom of man in every way, but the fact is that it is perceived that the Ecuadorian right is silent, quiet, overwhelmed, it almost has disappeared and simply it cannot be like this. The Ecuadorian right has assumed the role of scapegoat for the mistakes of the past, but it seems to forget his best moves: a country that for decades was an island of peace when there were swarmed guerrilla movements in the region; a country where rights were respected and freedom of opinion (as it is missed in these days); a country where the entrepreneur invested and generated employment (today we see that the state monopolizes investment and our entrepreneurs migrate to Peru, Costa Rica or any other place that gives them security and fair rules). These were achievements of the Ecuadorian right; thanks to it Ecuador did not succumb to terrorism or guerrilla and however, today it remains silent before the avalanche of crimes, delinquency and insecurity that plagues us as an unstoppable plague. It is the left and its inept judicial and security policies that have us living in anxiety every time we leave our homes or jobs; the laissez-faire and pass up policy, that a theft is not a theft if it does not reach a certain amount; to pardon the mules and smugglers; to guarantee the rights of criminals to the point of endangering our security forces, it is something that we cannot silent. But right goes off. The discourse against the party affected very deep and profound, it worked to perfection to the left. There is no doubt, since the right has been blocked for 6 years and it still does not react, however its awakening becomes increasingly imperative for Ecuador. Individual rights have been eroded to the point of almost disappearing and the silence makes us complicit. It's time to talk, to think, to be heard and to face the new challenges that the current political scene offers. The right should reappear.
THE LOGIC OF CHEATS Lcdo. Alberto Medina MĂŠndez (Argentina) The cheater only cares about winning. He resorts to deception as a means because what he needs is to move on. He's not interested in rules at all. In fact only uses them when it suits him. The contemporary populism, the one we know, corrupt, demagogic and perverse, needs the power as air to breath. It needs it to perpetuate, to stay, but mostly to keep doing business in the shadow of the State, considering not to lose impunity with which it handles daily. Despite the rhetoric of which they boast, democracy is only a tool for them that allows them to sustain, and that is why they develop an entire argument delicately prepared to make that tool their axis, as if they really believed in it. Actually, they only use the tool, to the extent that they find it functional and useful. They do not believe at all in its benefits, they maintain only a clearly utilitarian relationship with that institution. They strictly defend what they call popular majorities. As the winds blow in their favor, they will define themselves as democrats, and this idea will make its best flag. While they win elections and gain support in the polls, they will try to impose the reasoning by which most always are right, just to be more. And under that screen argument is that they challenge, with pride, to those who think differently, to play their game, urging them to stand for election, to legitimize itself to death, only to beat them with the rule that they love, just because it renders and suits them. What they do not say, but think closely, is that one day, when the polls no longer accompany as in the present, when the society reflects differently and stops giving in the face of fear, they will have other prepared arguments to justify circumstance. Some unwary, those who still believe in the intellectual honesty of the characters of contemporary populism, probably wake up that day of this long slumber, or might not do so and join gently the new argument that they have prepared for their electoral defeat. Cheaters never lose, are liars, only care about winning, they have no codes, no moral values, much less honesty to accept the possibility of being wrong. They always have an ace up its sleeve not to give up. They are not willing to recognize mistakes, much less accept that others think better or who have ideas that fit the real world more efficiently. They need to win at all costs and only need to accommodate arguments as winds blow. They believe in this democracy while the votes favor them, but these same that applaud majorities promoting free elections, defend antagonistic systems in which there are no elections, to the extent that those governing are just friends or related characters. They are not interested in systems, much less even respect the different thought. They are only interested to impose ideas, ways of life, and above all defend their meanest interests, those that allow eternal impunity, endless power and business forever. The society, the people, the community, the common good that they claim to defend, is just the argument they use and the excuse they need to continue making mischief. The evidences supporting this claim are too many and abound. None of them is austere, still less, poor; they all have court cases, suspicions and started processes. There is not clean wheat. Democracy conceived as they interpret it, allows them to be covered, and move on without retaliation.
Probably someday they will lose an election, as it has happened in the past, but they have prepared novel arguments for when the majority that supports them, ceases to be a living. When they win is because the people back them, adore them and love them. When they lose the elections, is simple, the establishment, corporations, economic power, the empire and sectorial interests, imposed the power of money and subjugated the people. They never lose. The rules are only a circumstance, they cannot play fair, it is not in his nature or essence. Their lies, their hypocrisy, their acting daily, show them as they really are. They just use cheaters logic.
THE COMPLICITY OF APATHY Tyrannies, autocracies, despotism, require significant dose of perversity by his executors. Also of a marked absence of values, a clear disregard for the people and a spirit of superiority always on the edge of sanity loss. But all these essential prerequisites are not sufficient for the concentration of power to concrete in a ruthless way daily. It is necessary in addition to all this, a vital ingredient. Without the passivity of citizens, none of this would be possible. They succeed and go forward, and they want more and up for everything, because they respond to the most basic physical laws. It's easy, they continue taking steps, because they find no resistance, nothing that makes them strongly in the opposite direction. Many people make a wrong interpretation of the democratic system and suppose to be the opponents who have to counter that power imposed by those that rule. And while it is clear that those with political responsibility to curb the abuses, are not to rise to the occasion, it is also true that power lies in society and not who she delegated circumstantially. If we do not want more abuses, the remedy is to react. But if something contemporary politicians have developed is a deep knowledge of sociology of this time. They know that the average person complains, is not happy, knows the presence of corruption, or at least that senses it with a high degree of certainty. Also being able to know that citizens dislike many issues and are absolutely indigestible, but he also knows that, for most, all that is not enough to leave the comfort. The result is in sight. A constant loss of freedoms, the utter contempt for the institutions and the abandonment by Republican values, in addition to this growing corruption that does not stop. They, those who wield power daily, they know. They do not ignore the immorality of their actions. They only justify themselves by a thousand forms, to make a way for their most basic needs of power concentration, accumulation of resources obtained by defrauding taxpayers and strengthen the regime that gives them impunity to continue doing what they please. They have enough tools, lots of money, to continue buying people in all social strata, from businessmen to the most needy, including justice, even in marginal areas, everything goes to sustain its scaffolding. And clearly, that dynamics gives them more power. But there is something that cannot be bought so easily, at least not always. And it has to do with the will of the people, that is still sleeping a long nap, and waking up at times, only in times of great indignation. And I must say, it awakens only in certain circumstances, those that it considers limits, and always for a short time. The main ally of these systems of power is the apathy of society, the chronic apathy of a community that is accustomed to living with corrupt, despotic and arrogant leaders who think they own the power and not mere administrators of public affairs.
The society actually has the power to change things, to say it is enough, to put their own rules, so that the today corrupts are succeeded by the tomorrow corrupt. It's people who can say "this is it" and stop the unbridled arrogance, abuse of authority, the discretionary management of the resources of all what governments distribute as if it were their own money, showing less and less shame and demonstrating the power that the circumstantial majorities delegate them and that they use for their own benefit without nerve. Citizens have the key in their hands. They are those that can, and should change the course of events. Even when it seems difficult or arises as a long battle and uneven, it should make the attempt. They speculate that people will not have enough will, they appeal to the absence of desire, and they know they need only to convey the idea that it is impossible to change the course, pushing those who want to change things for the trap of seeking political opponents for something to change. They know that's a lie, this is why they insist in that vision. They bet to keep winning with their immoral system of renting souls, and they perceive that there is no important opponent that can fight with concrete chances to alter the pace of this. But even in the crazy assumption that they twist the arm to the today's powerful people and are eventually defeated, they know that it will always be easier to negotiate with their peers, with the "colleagues" of the political corporation and simulate changes for everything to be as usual, that to face a society ready to send them home, or to jail for their constant abuses. For a system to go forward, and find no limits, it requires much evil from the side of the despots, but it is also indispensable the ingredient of a sleepy society, unwilling, apathetic, that just complain without justifying its anger and indignation. The powerful people, meanwhile, will continue to play their game. They enjoy it, they just think about their next hit and on how to continue accumulating wealth obtained fraudulently in order to continue their abuses. But none of this would be possible without citizens who contribute to the complicity of the apathy.