Luciano Romero travelled for three hours to reach Ecuador’s capital, Quito, and to express his support for his president. He’s at a rally in Plaza Grande outside the presidential palace, one of many that have been taking place across Ecuador currently, as Rafael Correa, president of the country since 2007, comes under attack from an unprecedented movement to depose him.
“Our president has done many good things,” Luciano told me. “For example, the education system – it has improved a 100 per cent. If you compare the education I received to the one my son is now receiving, the difference is amazing. If I were to list all the improvements under Correa, I’d be here all day. My wage has improved. The way people treat me is better. The bosses aren’t the same. The way they treat their employees is very different now. They show more respect.”
But President Correa has come under concerted attack from the upper classes and business groups since his recent announcement of the Ley de Redistribución de la Riqueza (Law for the Redistribution of Wealth). The most controversial part of the new law, now being debated in Congress, is an “inheritance law”, which could see inheritance tax rise to 77% for the richest 2% of Ecuadorians. Correa has said it is a vital step in combating the poverty and inequality blighting his country, where 22.5% of the population continue to live below the poverty line and 2% of the population control 90% of the country’s big businesses.
But opposition to Correa has been building, with anti-government protests running four days in a row earlier this month. Correa called on Ecuadoreans to remain vigilant, saying that the threat of a coup is real. “We cannot forget that the violent ones, the aggressive ones, the abusive ones, caused five deaths on at very high rates. We cannot let that happen again,” said Correa, referring to a police mutiny on 30 September 2010 in which he was taken hostage but rescued in a shoot-out led by loyal members of the military.
Ecuador’s experiment in what its supporters call the “Citizens’ Revolution” has seen progressive legislation across the spectrum. On immigration, Correa has said no one will be considered “illegal” in Ecuador in any more. On disability rights, legislation has transformed the lives of 300,000 disabled people. Companies with 25 or more employees must now have 4% disabled workers. The World Bank estimates 10,000 disabled Ecuadoreans have been helped into work since 2006.
On the minimum wage, there was a 9 percent increase in the private sector in 2013, and companies that can afford to pay their shareholders dividends are now obliged to pay their workers the higher “living wage”. As a result, poverty measured by income (using the national poverty line) decreased from 37.6% to 22.5% from 2006 to 2014, while extreme poverty went down from 16.9% to 7.7%.
Some indigenous groups are unhappy, claiming that Correa has rescinded on earlier environmental pledges, pushing ahead with mining in the mountains and oil extraction in the Amazon. Indeed, it is true that Correa has not yet solved the dilemma facing progressive governments in South America: how to reconcile the demands of environmental and indigenous groups with the region’s continued economic dependence on mining, oil extraction and agribusiness.
But Correa has undoubtedly made huge strides in reducing social inequalities. What Ecuador shows is that the current standoff in the country – or “division”, as the opposition call it – is inevitable if you want to create a more just society. What Ecuador proves is that “class war” is an unavoidable prerequisite to tackling inequality and building a humane society. By class war I mean that for an inequality or poverty reduction programme to be effective and produce justice it must tackle the entrenched wealth accumulated in a small elite in Latin America (and in the rest of the world).
This is, yes, a class war of the majority, but it is reactive. A minority pale-skinned elite has been allowed to wage a very successful class war for 500 years, although they prefer polite terms like “reform” and “privatization” to describe the process. Now someone is taking them on at their own game.
Part of the problem economists and planners in the World Bank have is that they have to come up with poverty reduction strategies that leave entrenched wealth alone. This is why they never work, usually making the situation for the poor worse. Instead of arguing for effective measures – such as taxing the rich’s wealth at very high rates, as recommended by the French economist Thomas Picketty — they argue for deregulation, privatization and the perma-panacea of “foreign investment”.
It’s no coincidence that this is the favoured programme of today’s mobile, multinational capital, and that it makes inequality worse and degrades democracy. I always think it must be hard for those working at poverty reduction strategies in the World Bank to deal with their ‘cognitive dissonance’. They must look at countries that have actually done it – Venezuela, Bolivia, Ecuador – and have to block out the fact that bucking all their recommendations is what has made their anti-poverty programmes work. But, of course, the World Bank can’t recommend taking on entrenched wealth, because it was set up to represent entrenched wealth.
The people who claim to care about inequality should be serious and look at where it is being combated. It shows quite clearly that you cannot be anti-inequality without being anti-imperialist. All the governments who have sought to take on entrenched elite wealth in Latin America have been the target of massive subversion of the democratic process by powerful business federations, the oligarch-owned press and, inevitably, the US embassy and all its agents (in the form of the Central Intelligence Agency, the Drug Enforcement Administraton, the United States Agency for International Development, among others). The web of control stretches far and across many institutions.
For example, just this week Venezuela received an award from the UN for halving extreme poverty. But it was this kind of poverty-reduction programme that led in 2002 to the US-backed coup, which deposed President Hugo Chávez, with the instalation of a business junta for a few days, before the the army and downtrodden of Venezuela got their president reinstated. In 2008, civil war nearly came to Bolivia as the rich white elite in the east, backed by the US embassy, unleashed strikes, disruptions, and even massacres of indigenous peasants in Pando, in an effort to depose President Evo Morales who was similarly humanising his society.
It is a familiar story. The US and Latin America’s elite are a team. If you mess with one, you mess with the other. Behind Carlos Slim in Mexico lies the Mérida Initiative and a swarm of DEA agents.
In Latin America, there is a positive correlation between kicking out the US ambassador – which Correa did in 2011, and Chavez and Morales did in 2008 – and decreasing poverty. If other countries around the world were not captured by the US and the development institutions it controls, particularly the World Bank and the IMF, we might see the same successes there. But pitting yourself against such great power is difficult, and can be suicidal. Ask Salvador Allende or Patrice Lumumba.
What we have learnt in recent decades from the historic break with imperial and oligarchic rule in Latin America is that if you want to create a just society you have to be anti-imperialist. You have to kick out and ban the agencies that are meant to keep you slaves. Venezuela, Bolivia, and Ecuador have also kicked out the DEA and USAID. More governments need to follow suit.
The leaders have made their countries sovereign for the first time since the 19th century. But indepedence is what the US empire hates more than anything. So the subversion starts. Venezuela becomes a “national security threat”, according to Obama. Diosdado Cabello, the prominent Chavista politician, becomes a “narcotrafficker”. History repeats itself. When the US got disillusioned with a previous agent, the dictator Manuel Noriega of Panama, they confected accusations of drug trafficking against him to fool the population into supporting their move against him. In the end, in 1989, the US invaded Panama, killing more than 300 civilians, and capturing the president.
If you want to use the wealth of your country for the benefit of your people, you have to take on the traditional ruling elite, but also their vicious and violent backers, the United States. They are two sides of the same coin.
*Matt Kennard is a Bertha fellow at the Centre for Investigative Journalism, Goldsmith’s College, University of London. He was previously a reporter for the Financial Times and is the author of two books, Irregular Army and The Racket, which was released in 2015.