How Ecuador Transitioned From 20th Century Neoliberalism to 21st Century Socialism

This bait-and-switch was typical of Latin American heads of state during the Washington Consensus era: Neoliberal reforms were quite unpopular with the electorate, so campaigning against them was often a prerequisite to election. However, indebtedness to Western creditors, compounded by political pressure from Washington, left them with little choice but to create investment-friendly policies and to emphasize debt servicing over social service provision.

Ecuador was typical in this regard. Since the 1980s, the country had received dozens of loans from Washington-based international financial institutions - loans that included structural adjustment conditions, such as trade and financial liberalization, spending cuts and privatization of state-owned industries. Moreover, Ecuador relied on the United States for most of its foreign direct investment and depended on US-based importers to buy the bulk of its exports over this period. Indebtedness and economic dependency left Ecuador with little choice but to implement Washington Consensus-type domestic policies.

That Rafael Correa's presidential campaign in 2006 promised a shift away from the Washington Consensus should have surprised no one familiar with bait-and-switch politics in Latin America. The surprise was that he, unlike Bucaram and Gutiérrez, actually followed through on these promises. Much to the chagrin of Washington, the Correa administration has raised taxes, increased social service provision, brought regulatory reforms to the public and private sector and written off much of the country's external debt....

Truthout | Op-Ed
How Ecuador Transitioned From 20th Century Neoliberalism to 21st Century Socialism
Jonas Gamso | Ph.D. candidate at the University of Pittsburgh's Graduate School of Public and International Affairs