Ecuador’s neoliberal war on public sector worsens COVID-19 catastrophe

May 12, 2020
More than 300 people working in the control and treatment of pandemics were made redundant last year as part of Lenin Moreno's deal with the IMF.

The Carondelet presidential palace in Quito stands in front of Plaza de la Independencia, its statue depicting the first “cry of independence” and dedicated to the heroes of South America’s liberation.

Each Monday, the square would become the stage for one of the key palace ceremonies – the changing of the guard. Huge crowds gathered there to observe the blue-clad guards parade, the raising of the nation’s flag and the sound of the national anthem, but also to catch a glimpse of the nation’s former president Rafael Correa, always clad in a black suit and a Guayabera-style indigenous shirt.

The palace now lies virtually empty and the salon of national treasures – the gifts received by Correa during his various official visits abroad – has been hollowed out, with the shelves laid bare. The water fountain in its central courtyard now stands still, the echoes of palace guards, visitors and public servants no longer resounding through its wide marble corridors. It is a worthy metaphor for a country saddled with an inept leadership in the midst of a deadly pandemic.

The response to COVID-19 by the current president Lenin Moreno’s administration, which was already severely weakened by mass protests last October, has been a combination of limited initiative and finger-pointing for its shortcomings. Naturally, the targets of blame have been its predecessors in Correa’s administration.

Otto Sonnenholzner, Moreno’s appointed vice-president and a protege of the Ecuadorian Chamber of Commerce, has effectively taken over the reins of the administration and followed a procedure in line with the other neoliberal governments in the region: severe repression, deprivation of workers and the most vulnerable communities, failure to mobilise public resources and incompetence in seeking and acquiring international assistance.

Ecuador’s coronavirus death wave

By the end of April, the number of people infected and deceased caused by the COVID-19 pandemic had spiralled out of control, nearly collapsing the country’s public healthcare sector -- already struggling with the cuts and austerity due to the Moreno government’s International Monetary Fund deal.

Official figures tracking the number of those infected finally began painting a more accurate picture of the catastrophe on April 10. On that day, the total of those infected and dead reached 7161 and 297 respectively — a jump of 30% in 24 hours. By the end of April, the official figures stood at 24,934 infected and around 900 dead.

These numbers have been widely disputed by the citizenry, the international media and the medical staff on the ground, who have reportedly been terrorised and silenced about what they have witnessed. The viral images and videos of bodies wrapped in black bags lying in makeshift morgues or being loaded into trucks made headlines across the world. A report conducted by New York Times showed that the actual death toll is approximately 15 times higher than the one suggested in official reports.

Other private sources have indicated much higher numbers. More than 1900 corpses were collected in the province of Guayaquil in the first two weeks of April. This number is reported to have increased to 7000 by April 24 and 14,000 by the end of the month.

There are several reasons why Guayaquil was hit especially hard by the outbreak compared to the rest of the country’s regions. The densely-populated coastal province is a major travel and transport hub to neighbouring Peru and Colombia, as well as an increasingly popular destination for retirees from the United States.

More importantly, the city of Guayaquil has been governed for more than 30 years by the right-wing Social Christian Party, a remnant of Ecuador’s old neoliberal political order. Both the current mayor, Cynthia Viteri and her predecessor Jaime Nebot, have been long-time opponents of Correa, consistently maintaining Guayaquil as a bastion of opposition and neoliberal reform. This has evidently impacted the quality and availability of many public services, including healthcare.

As has become the norm in the last several years, the initial response of the government has been to blame the appearance of the viral horror on Correa and the online “troll farms” he allegedly operates. The announcement was picked up and promoted by private media and journalists aligned with the Moreno government, but widely ridiculed and criticised across social media.

The attempt at pushback was followed by another bizarre media conference by Sonnenholzner, in which he issued a public apology for the “worsening of [Ecuador’s] international image,” rather than the lack of initial government response.

In another widely-criticised action, the police arrested a man for publishing viral videos criticising Moreno’s and Viteri’s governments and repeating the allegations that the true number of infected and deceased was a lot higher. This was likely a consequence of the Moreno government’s announcement that it would investigate the publication of “fake news” about the COVID-19 emergency.

Business as usual for Ecuador’s economic elites, layoffs for pandemic specialists

The past three years of Moreno’s neoliberal government have left a visible mark on the fabric of the welfare state and social projects initiated and developed during Correa’s Citizens’ Revolution.

During Correa’s 10-year-long administration, healthcare was top priority, alongside education and social programs. Public expenditure on healthcare rose from 1.81% of GDP in 2007 to 4.21% in 2016. This resulted in a number of impressive achievements — the number of doctors rose from 16 per 10,000 people in 2009 to 20.5 in 2016, the number of emergency beds from 473 in 2006 to 2,535 in 2018, and standard beds from 19,945 to 24,359 during the same period.

Consequently, the process stalled following the Moreno government’s turn to neoliberalism, and the welfare state that grew during those 10 years was gradually dismantled.

The public healthcare sector received its biggest blow in March last year, shortly after the signing of the new IMF agreement. Approximately 10,000 public servants were sacked in preparation for the financial body’s reform package, among them 2500–3500 workers in the healthcare sector.

Importantly, more than 300 personnel working in the control and treatment of pandemics were also made redundant, almost exactly a year before the start of the COVID-19 pandemic. Prior to the crisis, in November, Moreno decided to expel more than 400 Cuban doctors and medical personnel, much like his neoliberal counterparts in Bolivia and Brazil. He has also been reluctant to restore diplomatic ties with Cuba and purchase the interferon alfa-2B antiviral drug currently produced by the island nation to treat COVID-19. Thus, with the government infrastructure severely weakened through a “death by a thousand cuts” technique, the healthcare sector has been predictably unable to cope with the pandemic.

Meanwhile, state structures have been hollowed out with the elimination of 13 out of 40 state institutions by April last year. As well there has been US$2 billion in cuts and austerity through the elimination, privatisation and merger of a number of state companies and public entities.

The Moreno administration has severely cut social spending in education, with the funding to 32 major universities and polytechnics reduced by more than $100 million.

The rapidly spreading pandemic has not stopped the government from putting its obligations to global finance above the health of its citizens. Economy minister Richard Martínez announced on March 23 that the Ecuadorian government is planning to repay $324 million of its current debt to the international lenders, as a means of “fulfilling their obligations to investors”, despite the need for urgent investment in COVID-19 containment measures.

In an ironic twist, mere days afterward, the heads of the IMF and the World Bank advocated debt relief for emerging economies, alongside more than $12 billion in emergency funding and grants to assist countries battling the COVID-19 pandemic.

Punishing Correa and his allies

This immense crisis has provided the Moreno regime with opportunity to escalate his vendetta against Correa and other leaders of the Citizens’ Revolution and permanently purge his presence from the country’s political map.

Even before this latest sentencing, the former President was already facing more than 25 ongoing legal cases with charges ranging from bribery and corruption to kidnapping. All charges have been consistently questioned and disputed by Correa’s legal team as lacking any substantial evidence or due process.

The same has been said of the Caso Sobornos bribery case, which has resulted in a sentence of eight years for Correa.

In summary, the case alleges that Correa and his former vice president Jorge Glas organised a system of political financing and bribery throughout 2012-2016, with $7.8 million being received from various private companies in exchange for government contracts of public works. Only two significant pieces of evidence have been presented by the prosecution so far.

The first was an unsigned receipt for $80,000 allegedly from one of Correa’s assistants in the presidential secretariat, Alexis Mera. It bears no details whatsoever as to where the money came from or who was the intended final recipient.

Mera’s lawyer, Maria del Mar Gallegos has also pointed out that the media has played an important part in the construction of the “guilty before proven innocent” narrative in the case.

In an interview with Radio Pichincha Universal, she said: “Most of the media are polarised on the side of the Prosecutor’s Office, publishing what is convenient for them to make it believe that [the prosecution] is winning the process.” She further asserted that not a single private enterprise or entity had passed any cash payments to any of Correa’s ex-functionaries under investigation.

Correa’s response spoke volumes about both the intention behind the charges and their validity: “Well, this was what they were looking for: managing justice to achieve what they could never do at the ballot box.”

“I’m fine. I am concerned about my colleagues,” Correa said. “Surely we will win internationally, because everything is bullshit, but it takes years. It depends on your vote to end this nightmare.”

In a widely publicised article, Correa’s lead lawyer on the case, Fausto Jarin, disputed and dismissed numerous aspects of the conviction, accusing the tribunal of violations of Ecuador’s criminal code, refusal to admit key pieces of evidence and outright falsehoods. Among the most absurd charges levelled at Correa was that he was “taking public resources for personal use”. In fact, he borrowed $6000 from a common presidential fund and then paid back the sum with interest.

Correa has not been the only one in the crosshairs of the legal hit squad headed by Moreno’s Attorney General, Diane Salazar Méndez. Repression has gradually intensified against other historical leaders of the Citizens’ Revolution, particularly the most competent figures who engineered the most successful aspects of the Correa administration.

The most prominent case so far has been that of Glas, already serving a 6-year sentence resulting from the disputed Odebrecht case, for accepting bribes from the Brazilian construction company giant.

Glas has been credited as the key figure behind creating a new productive matrix between 2013-2017 through mass investment in major energy projects, such as the Coca Codo Sinclair Hydroelectric plant, and the export of energy to Peru and Colombia.

Also targeted were Virgilio Hernandez, Gabriela Rivadeneira and Paola Pabon, three leaders persecuted in the aftermath of the mass protests of October 2019, held several important positions in Correa’s administration.

As the president of the economic commission, Hernandez played a key role in designing several economic reforms and overseeing the country’s recovery in the aftermath of the 2016 earthquake.

Rivadeneira is the former president of the National Assembly of Ecuador and the former executive secretary of the Country Alliance party initially founded by Correa, but hijacked by Moreno and his allies and effectively turned into a neoliberal political platform.

Pabon, the current governor of Pichincha and former member of the Constituent Assembly, came to prominence during the Correa administration for her campaigns for women’s rights and the decriminalisation of abortion.

In addition, Ricardo Patiño, the former minister of defense and foreign affairs, responsible for organising the political asylum of Julian Assange, and the former member of the Constituent Assembly, Sofia Espin, were both forced into exile in Mexico last year.

The Caso Sobornos case is not final and an appeal has been filed by Correa’s and Mera’s legal teams. However, it is increasingly difficult to imagine the Moreno regime returning to transparency and the rule of law without a mass social uprising against his repressive rule.

For now, Ecuadorians must endure a triad of disasters: the COVID-19 pandemic, political persecution and a pro-business neoliberal austerity regime. But these are the exact kinds of conditions that nourish the soil of popular discontent and allow mass movements to simmer until they finally erupt and, as has been seen again and again in Ecuador’s history, they take the neoliberal government down.

[This article first appeared in The Gray Zone.]

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