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Ecuador: Facing the Global Economic Crisis

A narrow street just before El Panecillo the Ecuadorian Central Bank, located in Cuenca, Colonial Quito-Ecuador. Photo by Sin Duda and used under Creative Commons license

In Ecuador the reports of the National Institute of Statistical and Census (INEC) released today, show hopeful indexes, inflation decreased compared with last year's value for the same month of September (0.66% vs 071%). It seems President Correa doesn't have too much to worry about on this area, although nobody knows for sure how is he going to implement the changes approved in the recently passed Constitution. Other countries, however, haven't been as lucky. Today, even Sao Paulo, the largest financial center in Latin America, had to suspend its meetings twice, falling first by 10% and then 15%, closing to a lower 5.43%, Mexico lost 5.40%, Buenos Aires dropped 5.90%, Santiago -6.02% -4.86% Bogota and Lima sank (-9.27%).

Galo Chiriboga (Ecuador Mines and Oil Secretary) is concerned that oil prices are falling below 90 dollars and this could affect Ecuador and its plans to finance their all time waited reform. So far, the Constitutional reform is budgeted at 3.700 millions of dollars, though getting to that ammount will be far more difficult if oil prices fall below the $ 85 per barrel, which is the price set as a reference to estimate the 2009 Ecuadorian budget.

Looking outside of their borders, some bloggers in Ecuador are in doubt that the $700 million bailout will solve the global economical crisis the U.S.A has started. Joselias Sánchez Ramos of Dialogo con Joselias [es] (Talking to Joselias) jumps in and agrees that American crisis affects the whole world and particularly Latin America. He believes that there are some who will certainly benefit from this:

La crisis del mercado financiero estadoundiense pronto dominado por cuatro titanes que ofrecerán toda la gama de servicios financieros: Wells Fargo, JPMorgan Chase, Citigroup y Bank of America.

The American financial market crisis soon dominated by four titans that will offer the full range of financial services: Wells Fargo, JPMorgan Chase, Citigroup and Bank of America.

Omar Vargas of Cambiemos Ecuador [es] (Changing Ecuador) asks himself how different this intervention of the Federal Reserve in the U.S. is to the reactions under similar circumstances that took place in Ecuador back in 1999 and finds that it is no different. He also criticizes the bailout, stating that it will just strengthen the idea that no matter what financial obligations are acquired, how business is handled or money is invested, Uncle Sam will come and save the American's day. He concludes:

El salvataje hecho a AIG no debió haberse dado, pero la situación política (elecciones) los estándares morales y éticos equivocados y una ideología paternalista de los gringos a la larga producirán una crisis mayor en los EEUU y se extenderá a nivel global.

The bailout made to the AIG should not have happened, but the political situation (elections), the wrong moral and ethical standards, and the paternalistic ideology of the gringos will ultimately result in a major crisis in the U.S. which will extend globally.

Another Ecuadorian blogger (also journalist and writer) , Rubén Dario Buitrón translates into Spanish and publishes in his blog the open letter written by Michael Moore. The heading he picked for re-publishing this letter, says it all: El salvaje salvataje en EE.UU [es] (The savage bailout in the U.S.)

2 comments

  • Andres Guzman

    Mr. Ramirez, I notice a mistake in your notes about the picture you show in this blog. It’s not Quito street but a Cuenca Street call Calle Larga. I Know because I’m from Cuenca.
    I am sure your gonna make the corrections need it
    Thanks
    Andres.

  • Thanks Mr. Guzman. That was an oversight and I have to be grateful to you for clarifying information. Sure, I’m going to fix it as quick as possible.

    Sorry for the delay on realize such a mistake.

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