In Ecuador, there was no intention of committing a coup; what happened was an uprising, something different.
Tensions had been simmering after the governments decision to default on a third of Ecuador's $10 billion foreign debt. The move frightened foreign investors and lenders, and tightened the financial situation in a country still struggling to capitalize on its oil resources. The decision further prompted austerity measures from President Rafael Correa, who was criticized even by members of his own Country Alliance party.
Even if Correa is able to overcome the present crisis, the overall political situation may continue to deteriorate. For now, Correa, who is an economist educated in Europe and in the US (he completed a PhD at the University of Illinois), resisted calls coming from opposition to go to early elections due to the turmoil. The country's economy is continuing navigate in troubled waters. Although Ecuador is the world's largest banana exporter, and has ample petroleum reserves, the government-run oil industry is mismanaged and corrupt, and production is declining. Factions in the legislature fuel political and institutional instability, and there is a lack of respect for the rule of law.
Presently, Ecuador performs particularly poorly in business freedom, property rights, investment freedom, and freedom from corruption. Burdensome regulations restrict business and labour flexibility, the rule of law is politically influenced and inefficient, and expropriation of private property is a concern. The judiciary rules erratically and remains vulnerable to corruption. And, with Correa's socialist ideas, there is little or no hope for improvement.
The Obama administration still lacks a coherent strategy for the region; no initiative is in sight. All the U.S. presidents who preceded Obama launched some initiatives in the American continent that resulted in different trade treaties. So far this administration seems instead only able to give free hands to Chavez and his friends. The US should instead watch closely the uprisings and crises in countries such as Ecuador, part of the Bolivarian Alliance for the Americas (ALBA), and which supports Iran's nuclear project.
While South America is the United States' soft underbelly, the present Ecuadorian government is a strong ally of Venezuela; their intent is to build a strong front there against the "US imperialism."
Like many countries of South America, Ecuador has not yet overcome the wave of Marxist movements that have plagued the region, particularly after the Cuban revolution. Hence, Bolivarism, a local blend of Marxism and nationalism, represents some sort of Messianic hope, materialistic this time, which considers the U.S. as enemy number one.
According to some polls after the uprising, President Correa's approval rate has surged to 75%. The media reported that in "response, Correa, said his government had not done enough to implement its pro-people program, and would radicalize its project to build a socialism of the 21st century."
Talking about a real coup in Ecuador might be going too far. The protests had started on September 30 in the morning, as police and soldiers staged a mutiny against some aspects of a new civil service law. The lower ranks of the police rebelled, while the high command came out to support the government -- indicating there was no mastermind, but rather a spontaneous popular uprising.
Correa, speaking from a balcony of the presidential palace after his rescue, vowed no compromises. Just few days after the uprising, however, salaries of four military and police ranks were raised. The government explained that the raises, which they said had been due in 2008, were not connected to the protests. In the meantime, Police Chief Freddy Martinez was forced to resign; he was replaced by General Patricio Franco, who was given instruction to reform the police.
The austerity measures included a law to reduce bonuses of Ecuador's police force and to slow down its promotion schedules. The police were furious. Correa went to Quito's largest police barracks to explain the new civil service law, but angry policemen fired tear gas directly at him. As a result of the clashes, he had to be admitted to a Quito hospital, where he found himself trapped for half a day as protesters surrounded the building.
The UN and governments from Washington to Havana sent solidarity messages to Correa; South American leaders, who were meeting in Buenos Aires, welcomed the President's return to safety and said they would send their foreign ministers to Quito to show their support.
As expected, Venezuela's President Hugo Chavez, also a Correa political mentor, did not miss the occasion to rail against the U.S., saying, "We must demand from the US government to keep its old imperialist hands out of this continent." Chavez added that plans of a "coup" (as he defines the Ecuador's turmoil) are "particularly aimed at countries whose governments are legitimate and democratic. We have raised the banner of socialist revolution in democracy."
The president may still use last week's failed police uprising to consolidate his power and deepen planned changes that will expand his control over South America's seventh-biggest economy. According to central bank chief Diego Borja, Correa's government wants to change at least 31 laws, including industrial, financial, labor, water and land regulations, was emboldened by public support for the President during the chaos that swept the nation.
The US should be aware that at least one of Iran's best friends in South America is planning further radicalization.