Where does the IMF road lead. From economic recipes to a popular explosion in Ecuador

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On Tuesday, Ecuador’s president Lenin Moreno announced on national television that the government moved from the capital of Quito over four hundred kilometers to the city of Guayaquil, on the Pacific coast, due to riots. Parliament did not follow this example, but temporarily stopped its work.





Why Ecuadorians ousted the government from the capital


Mass demonstrations by Ecuadorians began after Moreno signed a decree abolishing from October 3 the subsidies for diesel fuel and gasoline that had been in force in the country since 1970. After the president’s decree, gas station prices rushed more than twice (about 123%), which caused a real shock in the country.

I must say, the people in this region live cool, sometimes tough to ruthlessness. For example, on the already mentioned Tuesday, in the southern Mexican town of Las Margaritas, local residents displeased with the mayor tied him with a rope to a pickup truck and dragged the poor fellow through the streets until the police managed to recapture their unlucky boss from the crowd.

Apparently, Moreno felt similar prospects (protest marches moved to Quito) and preferred to leave the capital with his government for the benefit. After all, the Ecuadorian police could not cope with the protesters, although they arrested almost 600 people. At the same time, about 500 people were injured in clashes between security forces and protesters on both sides. It was reported even about one dead.

Experts note that the protests in the country have acquired a spontaneous, uncontrollable character. True, the Confederation of Native American Peoples is now trying to formulate general requirements for the government and lead the popular movement, but so far the participants in the speeches have spilled out their anger quite spontaneously, although not without some purpose.

So it was with oil production facilities. They (three fields in the Amazon region where the Petroamazonas EP company operates) were taken under control by protesters to "protect the resources of the Ecuadorian state." As a result, oil production fell, and then completely stopped. Together with her, due to a drop in pressure in the main, the Trans-Ecuadorian Pipeline System (SOTE) stopped working.

In an interview with the local newspaper El Comercio, Lenin Moreno accused his predecessor Rafael Correa and the president of neighboring Venezuela, Nicolas Maduro, of rioting in the country. According to Moreno, acting together
"Maduro and Correa have stepped up their destabilization plan, it is they who are behind the attempted coup."


Rafael Correa publicly denied the allegation. In an interview with RT, he noted that the reason for the protests lies in the "inept management of the economy." “We left the economy of Ecuador in a state of growth,” said the ex-president. - This continued until the 2017-2018 years. And this year we are in decline. Unemployment increased, this increased instability. 500 of thousands of Ecuadorians faced poverty again. ”

He dismissed Moreno and Nicolas Maduro. “Protests in Ecuador are the responsibility of the International Monetary Fund, and not the government of Venezuela,” the Venezuelan leader quoted RIA as saying.News».

Similarly, experts speak out. They note that Moreno "pursues austerity policies in line with the recommendations of the International Monetary Fund."



It all started so well ...


History The friendship of the current Ecuadorian president with international financial institutions manifested itself in the public sphere at the beginning of this year. In February, Lenin Moreno, in an appeal to the nation, said that an agreement had been reached with the International Monetary Fund (IMF) on the possibility of obtaining a loan of 10,2 billion dollars.

This amount will include an IMF loan of 4,2 billion dollars, the remaining six (one billion jointly) will be provided by the World Bank, the Inter-American Development Bank, the Latin American Development Bank, the European Investment Bank, the Latin American Reserve Fund and the French Development Agency.

Lenin Moreno boasted to the country: the credit line was opened on very favorable terms (for a term of 30 years at a rate of less than 5%), and now happiness will come for Ecuadorians. “The allocated funds will primarily create new jobs, including remote ones, for women with small children,” the president promised.

The experts explained the favor of international financiers to the head of Ecuador by the fact that Moreno, unlike his predecessor, began pro-American politics and was kindly for it. Others linked Quito's lending to the pending British loan to WikiLeaks founder Julian Assange, who had been hiding in the Ecuadorian embassy in London since 2012.

So, however, it happened. On 11 in March, Ecuador finally signed a loan agreement with the IMF and soon received the first tranche of 652 million dollars. At the same time, the pressure of the Ecuadorian authorities on Julian Assange increased. The journalist was restricted access to the Internet, they began to accuse him of violating the regime of the embassy and other sins.

A month later (April 10) Moreno deprived Assange of Ecuadorian citizenship. On the same day, the ambassador of Quito in London called the local police, invited her officers to come to the diplomatic mission and pick up the disgraced journalist, which they executed literally the next day. Thus ended the seven-year saga of the struggle of the founder of the site WikiLeaks with British justice.

After his arrest, Moreno explained his decision to the public by saying that Assange “intervened in the internal affairs of several countries and violated a number of international conventions.” This comment was ignored in the Western media. They talked more about the political nature of Ecuador’s deal with the IMF and its obvious benefits.

Monetary Fund is true to itself


However, the reality was not as blissful as it appeared in the media. The deal really had a political connotation. This became clear when Moreno announced the withdrawal of Ecuador from 1 on January 2020 from the Organization of Petroleum Exporting Countries (OPEC). This step was made in the interests of the United States, where Ecuadorian oil actually goes.

But this was not the end of the matter. The IMF demanded that the government of Ecuador tighten its economic policy and introduce a number of restrictions on budget spending. The main one was the requirement to abolish subsidies for motor fuel. Every year, a substantial amount was spent on this from the country's budget - $ 1,2 billion. In Quito, the IMF accepted and promised to resolve the issue in the fourth quarter of the year.

Now in the light of the protests of the population it is clear how far this agreement of the Ecuadorian authorities was, to put it mildly, short-sighted. Let's count. If Moreno, without any credit and unnecessary obligations, had simply removed subsidies for diesel fuel and gasoline from the budget, he would have released 3,6 billion dollars in three years (namely, for such a period, which the IMF ultimately lent money). This amount is comparable to the onerous loan of the monetary fund. Only now, in addition to everything, Ecuador is entangled with short-term debt, for which the poor population of the country will pay.

Having embarked on a rapprochement with the United States, Lenin Moreno rushed back into the arms of global financiers and seems to suffocate in those arms. After all, the IMF does not practice revising the agreements. So, you have to perform them anyway. To popular protests, the monetary fund is deaf and dumb ...
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18 comments
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  1. +1
    15 October 2019 05: 42
    Hot people however ....
    Ps "Do you want to be like in Ecuador ?!" (FROM)
    1. +2
      15 October 2019 06: 05
      Quote: BISMARCK94
      "Do you want to be like in Ecuador ?!"

      Is Lenin guilty again? laughing or did the white man find traitors in the Indian camp again? smile But seriously, it seems that the economy has really gone up, since there was a batch. Everything, as always, to the end of oil.
  2. +5
    15 October 2019 06: 10
    Recommendations from the IMF:
    _--------------------
    Russia has not taken loans from the IMF for a long time, but its influence on the Russian economy is still great. Fund employees meet with officials and experts, point out flaws and give advice. On Friday, the fund recommended that the government raise its retirement age. The IMF issued similar recommendations to Ukraine, which recently presented the concept of pension reform. wassat
    ------------
    IMF: budget rule should help diversify Russian exports wassat
  3. +2
    15 October 2019 06: 36
    On March 11, Ecuador finally signed a loan agreement with the IMF and soon received the first tranche of $ 652 million.
    .... As they say, a claw is stuck ... And the people in Ecuador are really cool ...
    1. +3
      15 October 2019 07: 52
      Quote: parusnik
      ...... And the people in Ecuador are really cool ...
      The network has a wonderful video, as they did with the mayor! Dragged along the road, which he promised to repair, but did not repair. Native American temperament !!
      Form self-defense units, take security officials hostage, in a word protest
  4. +3
    15 October 2019 08: 05
    IMF money bags have long been to the wall! ...
  5. +2
    15 October 2019 08: 19
    Power brings to any revolution! Creating unbearable living conditions for ordinary people, bringing them with taxes and injustice to the extreme degree of need. If power serves citizens, raises their standard of living, is not enriched at their expense, then a revolutionary situation does not arise. But the laws of capitalism dictate one thing, get rich, those in power and get rich, mainly due to the impoverishment of the majority of citizens, and then they are surprised that people are organizing a revolution. Strange they are these bourgeois.
  6. +1
    15 October 2019 08: 28
    If Moreno, without any credit and unnecessary obligations, had simply removed subsidies for diesel fuel and gasoline from the budget, he would have released 3,6 billion dollars in three years (namely, for such a period, which the IMF ultimately lent money). This amount is comparable to the onerous loan of the monetary fund.

    I understand that the author is not happy with the IMF, but why neglect elementary logic?
    It is assumed that these 3.6 billion will appear in addition to the loan.
    But in any case, the author was late, the protests, which, incidentally, were carried out by representatives of the indigenous peoples of Ecuador, agreed to stop, return fuel benefits, dismantle barricades, and develop a new law on benefits. As I understand it, provincial, not metropolitan, protested.
    It became interesting, and to what magnitude did the price of gasoline rise.
    As it turned out, on October 7, the price of gasoline was about 0.5 US dollars.
    https://ru.globalpetrolprices.com/Ecuador/gasoline_prices/
    In general, of course, tying an official to a jeep and driving him along the roads for which he is responsible is an interesting method. Although unlawful.
  7. +4
    15 October 2019 10: 22
    Where Lenin is - there is a trade in national interests (Brest Peace and the IMF) bully
    1. +1
      15 October 2019 15: 14
      Lenin and Stalin had brains ...
    2. +2
      15 October 2019 19: 07
      Quote: Operator
      Where Lenin is - there is a trade in national interests (Brest Peace and the IMF)

      Brest peace signed by Trotsky
      1. +10
        15 October 2019 19: 20
        Trotsky refused to sign and declared "no peace, no war." The treaty was signed by the rest of the Russian delegation in accordance with instructions from Lenin, who then lobbied for the ratification of the treaty at the Congress of Soviets.
        1. +1
          15 October 2019 21: 14
          Lenin did not have the Internet, and he looked at the situation through Trotsky’s glasses. In the end, Lenin created the state ... However, in order to win the war, you sometimes need to burn Moscow laughing We respect Kutuzov ???
  8. 0
    16 October 2019 06: 21
    IMF demanded from the government

    I should have written "independent government. "That would be funnier.

  9. 0
    16 October 2019 06: 27
    Do not ask what your country can do for you. Ask yourself what Russia can do for your country.
  10. 0
    16 October 2019 15: 17
    Foreign countries will "help" them. How it helped Iraq, Libya, Syria and Ukraine before.
  11. -1
    16 October 2019 21: 17
    Quote: Ptolemy Lag
    Lenin and Stalin had brains ...


    Lenin had syphilis, and Stalin had the iron will to create the greatest state in the history of the world!
    Lenin consumed 20% of the territory of the Russian Empire, and millions of people lost their time in the Civil War.
    Stalin increased the country's territory, under Stalin, the population was growing steadily, food prices were declining after the most difficult war.

    The current situation (starting from the 90s) is a symbiosis of monstrous failures in all areas of the country's internal life, and good progress in foreign policy (Crimea, Syria).

    But soon it will be more fun and miraculous - the oligarchs publicly "bend" the first minister:

  12. 0
    21 October 2019 23: 23
    Yeah...
    No comments

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