Ecuador President's Bold Economic Plan
If the last three days of economic debate at the United Nations proves to be a guide, President Rafael Correa of Ecuador may be emerging as the leading intellectual of the Latin American left, at least among Spanish-speaking countries that have been most vociferous in their opposition to the United States.
An urbane politician and a recognized economist with European and American degrees, Correa came to the United Nations this week armed with the expected rhetoric he shares with Hugo Chávez, Daniel Ortega and Fidel Castro. But he also came with a plan. In a speech in the General Assembly on Thursday, he laid out some concrete ideas about how Latin America could, by creating its own regional financial institutions, fiscal cushions and eventually perhaps a regional central bank and common currency, build an economic future much less reliant on international lending institutions and the damaging swings of fortune caused by a dependence on the industrial countries and the "clan of the powerful."
Correa's presence may turn out to be the highlight of the beleaguered Conference on the World Financial and Economic Crisis and Its Impact on Development, which was first billed as a summit, then a high-level meeting. As it headed toward a mostly bash-capitalism session planned for early June, various nations began objecting to a draft declaration being written, and the meeting was postponed for three weeks to achieve some consensus on a final document. Even with that in place, almost all government leaders opted out. Along with several Caribbean prime ministers, Correa was the only president to appear, and he made the most of it.
Notably absent from the UN meeting, attended mostly by ministerial-level delegates from around the world, were Correa's friends and allies. President Evo Morales of Bolivia canceled out at the last moment and, to the personal disappointment of Miguel d'Escoto Brockmann, the General Assembly president from Nicaragua who had staked so much on this event, his own President Ortega stayed away. Hugo Chávez, the Venezuelan president, did not attend, and the Cuban leadership sent a trade minister.
But the forward-looking, take-charge projects proposed by Correa (who spoke by telephone with President Obama early this month) have resonance in other regions. In seminars and round tables on the margins of the larger gathering, African Union members spoke of the necessity for strong regional institutions on their continent as well as national stimulus plans, enhanced intraregional trade and investment in regional infrastructure so that, as one ambassador described it, he wouldn't need to fly from East Africa to West Africa by way of Paris. In Asia, regional organizations have been working on projects along these lines for years, with mixed success. The model is the European Union.
Chile's UN ambassador, Heraldo Muñoz, also spoke in a panel discussion about the importance of long-range national economic planning, describing how his country had banked or invested the profits of boom years so that it could "loosen its belt" to sustain social programs in tougher times.
The man of the moment this week--and not just because he was the only president in attendance--Rafael Vicente Correa Delgado, 46, was born in Guayaquil and got his first economics degree there from the Universidad Catóolica. He later earned a master's degree in economics from the Catholic University of Leuven in Belgium and both an MS and PhD in economics from the University of Illinois, Urbana-Champaign. He is fluent in French and English, but speaks publicly only in Spanish as a matter of policy, he told reporters. He had been finance minister of Ecuador before being elected president in 2006 and re-elected in 2009.
Correa has been a thorn in the side of the United States, questioning the value of a hemispheric free trade agreement and putting oil and mining companies on notice that they will have to turn over much more of their earnings to Ecuador, though he has stopped short of nationalization. (He has also had a long-running dispute with a Brazilian construction company, Odebrecht.) In a nod to Chávez, Correa praises the Bolivarian Alternative for the People of our Americas, an alternative free trade zone, which Ecuador signed on to this week.
On Thursday he repeated in his General Assembly speech that he would like to see the International Monetary Fund and World Bank abolished, but since that won't happen any time soon, they should be stripped of much of their power. (He also added in an aside that he gets tired of seeing Latin American finance ministers rounding out their careers in IMF and World Bank jobs.)
In Ecuador, he has expanded his presidential powers in a Chávez-like referendum. Last December, he renounced the country's foreign debt, calling it "immoral" and "illegitimate," but subsequently bought back 91 percent of it, according to the Wall Street Journal. Even his critics say he understands how economies work.
One international institution Correa wants to strengthen is the United Nations and its agencies, through which he called for the channeling of development funds. There would be problems here, too. The Economic and Social Council has all but failed to function, and the General Assembly, while dominated by the developing nations, lacks unity even among them, with richer developing nations looking to join the North and not to represent the South. Giving the lumbering UN some of the policy and disbursement powers of the IMF and World Bank certainly would not get support from industrial nations.
Still, said Correa, "This meeting is the beginning."