[mgj-announce] Working Group Meetings + Wheatpasting + Ecuador
rob at essential.org
Thu Aug 15 13:07:33 EDT 2002
[Note: Education and Outreach meeting tonight, Thursday, August 15]
7PM Thursday, August 15 at
The Public Resource Center for Activism & Arts
1730 Connecticut Ave. NW, 2nd Floor
Thursday Aug 15, 7:30 pm
AFSC office, 2211 14th St NW (near U St metro)
TUES, Aug 20th
AFSC office, 2211 14th St NW
7:00 pm, Tuesday, Aug 20
Friends of the Earth office, 1025 Vermont, NW, 3d floor
** WHEATPASTING **
Who: you and a friend
When: Wed. Aug 21, 9 pm sharp
Where: 1640 Hobart St NW in Mt. Pleasant
Join the MGJ wheatpasting brigade for our first night out in a long
time. We'll be covering the city with posters to generate publicity for
the Fall actions and to get more people to organizing meetings.
Wear old clothes, you might get messy.
Buckets are going fast, reserve your today! Email me to RSVP, so we
know roughly how many people to expect. And if you have access to a
car, we can hit more areas of the city. -Martin (thomasm at seiu.org)
PS- wheatpasting is legal in DC!
NEXT MGJ GENERAL MEETING
Weds., Aug 28
St. Stephens Church
16th and Newton, NW
In its unending effort to see that progressive measures to provide
healthcare to people are thwarted everywhere in the world, the IMF has
sucessfully demanded that Ecuador terminate a program that would earmark
a portion of the country's oil earnings for healthcare and education.
Clips on this genuine scandal below:
Ecuador Removes Health, Education
Segments From Oil Fund
August 2, 2002
DOW JONES NEWSWIRES
QUITO -- In another step toward the signing of a long-delayed $240
standby credit accord with the International Monetary Fund, Ecuador's
executive branch has proposed to eliminate a health and education
from an oil revenue fund.
On Friday, President Gustavo Noboa submitted eight amendments to a
responsibility law, which establishes a fund to collect revenues from a
The fund is aimed at paying down debt and building a contingency
for fiscal and natural emergencies.
The addition of a category for health and education, to which 10% of
inflows would be deposited under a previous proposal, was one of the
obstacles holding up the IMF accord.
With the amendments, 70% of fund deposits would still go toward debt
reductions and 20% to the contingency reserve. But no mention is made
what's to happen with the balance 10%.
The fiscal responsibility law requires that Ecuador's debt to gross
domestic product drop by 16 percentage points every four years until the
ratio of debt-to-GDP falls to 40% from 78% currently. One of the eight
amendments aims to prohibit the country's debt/GDP from increasing once
that target ratio is hit.
Another change sought is the elimination of an article that would
any central government budget surplus at the end of a fiscal period to
automatically be allocated according to the new fiscal law guidelines.
Yet another change would require the country's social security system
resolve its deficit to guarantee current and future pension payments.
Another proposal would require the nod of the central bank for future
foreign debt issues.
Savings from debt buybacks would go into investment projects, in yet
another proposed amendment.
Budget planners would be required to use projections from a
international energy agency in drafting base oil prices for projected
Yet analysts note that one key condition still pending for IMF aid is a
of some $500 million in public spending to hit the primary fiscal
target of 6.4%. The cut is equivalent to about 5% of GDP. Ecuador's
minister, Francisco Arosemena, is currently in Washington meeting with
Meanwhile, Mauricio Yepez, president of the central bank's board of
director, said the primary surplus should come in at 6% this year,
the global surplus should amount to 2% of GDP. He added that economic
this year should amount to about 4%,
and 6% next year.
By Maria Elena Verdezoto,Dow Jones Newswires
ECUADOR: IMF Wants Future Oil Revenues to Service Debt, not Health
By Kintto Lucas
QUITO, May 29 2002 (IPS) - The IMF has conditioned approval of a loan
Ecuador on the modification by parliament of a law that earmarks
for health and education 10 percent of revenues from the oil exports
will be piped through a new heavy crude pipeline still under
The revenues attained from the OCP pipeline, which will carry crude
the Amazon jungle region to Pacific coast ports, must go exclusively
towards servicing debt, International Monetary Fund (IMF) spokespersons
told Ecuador's negotiators in Washington.
But on May 22, the Ecuadorean Congress approved a law that assigns 70
percent of future oil export earnings from the pipeline to paying off
the foreign debt and the state's debt to Ecuador's Social Security
Institute, 20 percent to an oil fund, and 10 percent to health and
Minister of Economy and Finance Carlos Julio Emanuel, who has been in
United States since last week negotiating with the IMF, confirmed that
allotment of 10 percent of the revenues to social spending is the main
obstacle Ecuador is facing in securing approval of a 240 million-dollar
''The negotiations will continue, and I expect the problems to be
out soon,'' since the differences are based on the IMF's complaint that
the percentage reserved for health and education has been
before it even exists, Emanuel explained on a stopover in New York.
But ''the entire law is a pre-assignation, because the same could be
of the 70 percent that is allocated to paying off the debt and the 20
percent that is to go into the oil fund,'' to be used to service the
in the case of future oil price slumps, he argued.
Nevertheless, Emanuel said President Gustavo Noboa would try to fulfill
IMF requisite, by somehow getting the law amended, although he
did not explain how the president meant to do that. Observers point out
that the only way would be for parliament to enact a new law.
The chief of the IMF mission for Ecuador, Bob Traa, also questioned how
much maneuvering room Noboa had, saying it was odd that the
president believed that such an important law could be changed after it
been approved by Congress.
In its original form, the draft law submitted by the Noboa
stipulated that 80 percent of the revenues obtained by exports of oil
pumped through the OCP pipeline would to go towards paying off the
and 20 percent would go into the oil fund. But the legislature
modified the bill, allotting 10 percent to social spending.
The pipeline, to run from Ecuador's Amazon jungle region to the Pacific
coast in the northwestern province of Esmeraldas, is being built by the
OCP Limited consortium, made up of Alberta Energy of Canada, Kerr McGee
Occidental Petroleum of the United States, Agip Oil of Italy,
the Spanish-Argentine Repsol-YPF, and Techint of Argentina.
The 600-km pipeline, to begin operating next year, has drawn loud
from local and international environmental groups, indigenous
communities and even the World Bank, which have all warned of the
it will cause to pristine areas of the Amazon jungle and water
sources that supply cities like Quito.
The law approved last week by Congress only involves the funds derived
exports of crude carried by the pipeline. The revenues from the
rest of Ecuador's oil exports - the country's main source of
foreign-exchange - will continue to be used as stipulated by the
which allots 40 percent to debt- servicing.
Ecuador's debt amounts to 16 billion dollars, equivalent to 95 percent
the country's Gross Domestic Product (GDP). Of that total, 52 percent
is owed to private banks, 30 percent to multilateral lending
and 18 percent to the rich countries grouped in the Paris Club.
The new law also stipulates that the Ministry of Economy and Finance is
cut fiscal expenditure and service the public debt, to attempt to
bring down the level of debt to 40 percent of GDP in the next 10 years.
Traa said that it was possible that an agreement would be reached in
despite the discrepancies between the IMF and Ecuador, which he
said did not only involve a question of percentages, but ''go much
Minister Emanuel warned that if an agreement is not reached with the
his country may use the future oil income as a guarantee for loans in
private banks - an option opposed by the multilateral lender.
Economic analyst Wilma Salgado said the Ecuadorean population will not
benefit in the least from the rise in oil revenues if the government
yields to the IMF's demand that the funds from exports of the piped oil
used exclusively to pay the foreign debt.
''Under the new law, the creditors who hold Ecuador's public debt, most
which is external, will be the beneficiaries of 90 percent of the
revenues from exports of oil transported by the OCP pipeline,'' she
Salgado underlined that not only will the creditors directly receive 70
percent of the foreign exchange brought in by the new exports, but the
remaining 20 percent will be deposited in a fund that will be used to
service the debt when oil prices drop.
The payment of the public debt became a top priority for this Andean
of 12.4 million 20 years ago, due to ''the combined pressure of the
IMF and of local holders of foreign debt bonds, generally financial
intermediaries or high-level government officials,'' she explained.
''Local traders purchased debt bonds on the secondary market when the
dipped below 20 percent of nominal value. Later, they pressured
the governments for preferential treatment such as that granted by this
law, thus allowing them to double or triple the value of their
investment,'' Salgado added.
''The bonds have quadrupled in value since the announcement of the new
in which creditors are guaranteed that Ecuador will earmark the
earnings from the sales of oil transported by the new pipeline to
the public debt,'' she stated.
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