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Generational Dynamics Web Log for 13-Oct-2019
13-Oct-19 World View -- Ecuador's president Moreno imposes curfew after 10 days of violent protests

Web Log - October, 2019

13-Oct-19 World View -- Ecuador's president Moreno imposes curfew after 10 days of violent protests

China deploys mass surveillance spy system in Ecuador

by John J. Xenakis

This morning's key headlines from GenerationalDynamics.com

Ecuador's president Moreno imposes curfew after 10 days of violent protests
Ecuador caught in massive debt trap by China
Indigenous people demand closure of China's copper and gold mines
China deploys mass surveillance spy system in Ecuador

Ecuador's president Moreno imposes curfew after 10 days of violent protests

Anti-government protesters in Quito, Ecuador, on Tuesday (AP)

Anti-government protesters in Quito, Ecuador, on Tuesday (AP)

Ecuador's president Lenin Moreno Garces has imposed a curfew on Quito, the capital city, after 10 days of violent protests that have paralyzed the city. Protesters on Saturday blocked road access to the city's international airport and set fire to the national auditor's office as police responded with tear gas and rubber bullets and authorities imposed water and power cuts across the city.

The violence was so bad that Moreno moved his government base from Quito to the coastal city of Guayaquil earlier this week to escape the violence.

The protests were led by the Confederation of Indigenous Nationalities of Ecuador (CONAIE). The indigenous groups are the ethnic groups that occupied this region prior to arrival of the European conquerors. Today, there's a major social fault line between the indigenous people and the descendants of the European invaders. The principal indigenous groups are the Shuar and the Cañari Kichwa.

The protests were triggered by a plan to end fuel subsidies. Ending fuel subsidies would increase gasoline (petrol) prices by 1/3, and would double diesel fuel prices.

On March 11, the International Monetary Fund (IMF) approved a $4.2 billion bailout for Ecuador, subject to certain conditions:

"The aim is to reduce debt-to-GDP ratio through a combination of a wage bill realignment, a careful and gradual optimization of fuel subsidies, a reprioritization of capital and goods and services spending, and a tax reform. ...
The authorities are committed to supporting job creation, restoring competitiveness and catalyzing private sector-led growth while increasing transparency and forcefully countering corruption. A more efficient tax system, public wage restraint, facilitating the hiring process, and a more efficient energy sector are important components of the authorities’ plan in this area."

Having accepted the IMF bailout money, Ecuador is now committed to implementing the austerity measures, including "the careful and gradual optimization of fuel subsidies."

Some of the rioters are demanding that the government ignore the IMF's austerity requirements, and keep the fuel subsidies. Conaie agreed late Saturday to negotiations. This is an ongoing situation, and it's possible that Moreno's government will not survive.

Ecuador caught in massive debt trap by China

Rafael Vicente Correa Delgado was Moreno's predecessor as president between 2007-2017. When Correa first took office in 2007, he advocated for indigenous people’s rights and sustainable development, and the end of “exploitative capitalism” by mainly American and European investors.

The end of "exploitative capitalism" meant that Correa would refuse to pay back $3.2 billion in foreign debt.

So having defaulted on debt to US and European investors, Correa invited investments from Chinese investors, and went on a spending spree with money loaned by China. Today, Ecuador owes $6.5 billion to China.

In December 2018, Ecuadorian president Moreno visited Beijing and obtained an additional $900 million in loans from China, as part of a Belt and Road Initiative (BRI) cooperation deal with China.

I've written about a number of China's "debt trap diplomacy" deals with many countries. China designs these agreement so that it's almost impossible for the debtor country to make its payments. The terms of these agreements are kept top secret, because they usually involve corruption and kickbacks, and because the allow China to take control of a country's infrastructure, such as a seaport, as an inevitable consequence of default. Since the agreement specify that China takes control of the debtor's assets, there's no need to impose austerity requirements, as the IMF does.

So even the $900 million loan in December wasn't enough to save Ecuador from default, and so Ecuador had to obtain a further $2.4 billion bailout from the IMF.

There are some groups in Ecuador that are demanding that the government simply not pay back the IMF loan, in the same way that Correa refused to pay back the $3.2 billion that Ecuador owed to US and European investors in 2007. However, that won't work this time, since the IMF bailout money will only be disbursed over a three year period.

As we said, this is an ongoing situation, and Morena may not survive in office.

Indigenous people demand closure of China's copper and gold mines

Ecuador has a 750 km stretch of mostly undeveloped deposits of copper, silver, gold and zinc. Starting in 2015, China has taken a leading role in mining those minerals. China has ownership or joint ownership of three mines: the Mirador and San Carlos-Panantza copper mines, and the Rio Blanco gold mine.

The mines are all being developed in the midst of indigenous people's villages. When the Chinese first arrived, they promised that the local people would benefit from the mines. However, as is usual with Chinese projects, the jobs are all taken by imported Chinese workers, and the locals receive nothing, although their land is taken, their roads and lakes are blocked. The Mirador copper mine has turned 1,300 hectares of rainforest into an open pit mine.

Indigenous people affected by the mines are planning protests, but they have little hope. This is another ongoing situation.

China deploys mass surveillance spy system in Ecuador

During the last four years, China has installed a vast surveillance system, known as the ECU-911 system, that can be used to spy on all Ecuadorian citizens.

The China-made surveillance equipment contains as many as 4,200 cameras, monitored by 16 centers and around 3,000 employees. The system lets the government track phones, and may soon be upgraded with facial-recognition capabilities. The equipment was manufactured by two Chinese firms, Huawei Technologis and China National Import & Export Corp (CEIEC).

Outside of Ecuador, similar systems have been sold to Venzuela, Bolivia, and Angola. As many as 18 countries worldwide are currently using Chinese-made monitoring systems.

As with all Chinese-made network products, we have to assume that the Chinese military is able to access the surveillance and data, and correlate it with the data in their own databases.

Sources:

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(Comments: For reader comments, questions and discussion, see the Generational Dynamics World View News thread of the Generational Dynamics forum. Comments may be posted anonymously.) (13-Oct-2019) Permanent Link
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