WikiLeaks' Quito cables show how USAID undermined sovereignty

October 12, 2014
Reforms enacted during the Bush administration moved USAID leaders into the US State Department, tying the agency’s developmen

After more than 50 years in Ecuador, the US Agency for International Development (USAID) closed up shop last month. The Ecuadorian government said USAID has been asked to leave Ecuador, while a US Embassy official claimed it was USAID’s decision.

It appears that after more than two years of trying, the US and Ecuador failed to negotiate the terms of a new bilateral assistance agreement.

As USAID’s website states: “U.S. foreign assistance has always had the twofold purpose of furthering America's interests while improving lives in the developing world.”

Reforms enacted during the Bush administration moved USAID leaders into the US State Department, tying the agency’s development work even closer to the US government’s strategic, security and economic interests.

As US diplomatic cables published by WikiLeaks show, USAID has worked in conjunction with other arms of the US government to further US foreign policy goals in Ecuador.

USAID programs were used to garner support for Plan Colombia, the US-supported militarisation of drug interdiction efforts in Colombia. The agency’s “democracy promotion” activities were a key element of the US Embassy’s strategies to prevent Ecuador joining Latin America’s “pink tide”.

These programs aimed to generate consensus in Ecuadorian civil society around the US’s favoured neoliberal economic model, and foster a network of elites who would adhere to those principles.

After Ecuadorian President Rafael Correa survived a coup attempt in 2010, he accused USAID of interfering “in Latin American nations like Ecuador under the pretext of strengthening democracy but really with the intention of destabilizing governments through funding of certain citizens and groups”.

More generally, the agency’s “warm and fuzzy” programs have been part of efforts to win Ecuadorian hearts and minds by trying to show the US government in a benevolent light.

Deteriorating relations

In 2008 and 2009, relations between Ecuador and the US deteriorated as the Ecuadorian government increasingly rejected US hegemony and asserted Ecuadorian sovereignty.

Early on, several cables from the US Embassy in Quito commented that cooperation between Ecuador and USAID was the one area that remained unaffected. However, conflict emerged here too when the Ecuadorian government tried to assert greater autonomy over the way foreign aid would be used in Ecuador.

According to its Congressional Budget Justifications, USAID’s programs in Ecuador between 2007 and 2010 were focused on “peace and security” (with the vast majority of those funds being allocated to “counter narcotics”), “strengthening democracy and democratic institutions” and “economic growth”.

Much of USAID’s activity was focused in the regions along Ecuador’s northern border with Colombia, where the effects of the US “war on drugs” have been most acute.

Plan Ecuador

In April 2007, the Ecuadorian government announced its own framework for development in the region in “Plan Ecuador for Peace, Justice, and Equity”, to be overseen by a new Plan Ecuador Secretariat.

The plan’s goals included promoting economic development, improving social services and safeguarding national sovereignty. In contrast to Plan Colombia, Plan Ecuador said Ecuador would seek peaceful resolution of conflicts in the region rather than using military force.

The plan was intended to guide the development activities of the Ecuadorian government and international donors in the region.

The Correa administration asked USAID to give funds for a USAID-funded infrastructure project in the northern border region directly to the Plan Ecuador Secretariat, rather than USAID’s preferred contractor for the project, the International Organisation for Migration (IMO).

According to a cable from August 2008, this proposal “was unacceptable to USAID for many reasons”. Some USAID development activities were suspended while Ecuador and USAID tried to negotiate an agreement.

USAID has traditionally bypassed governments in developing countries, giving funds to NGOs or contracting directly with private contractors to implement its projects. This undermines the efficacy and autonomy of governments by excluding them from the project implementation process, and perpetuates the paternalistic dynamic of much international aid giving.

Moreover, local people are denied economic opportunities when the work of implementing projects is more often than not contracted to US firms.

In 2010 USAID announced an initiative aimed at increasing the number of programs implemented through local systems, but they still only account for around 14% of the total funds spent by USAID.

In the end, the Ecuadorian government backed down and accepted that the funds for the program could go to the IMO, a decision the US Embassy put down to the Correa administration’s “pragmatism”.

The government had become aware of its “limited administrative capacity”, wrote Ambassador Heather Hodges. As a result, it was “increasingly willing to work with other actors to implement its programs, including NGOs and the private sector”.

By September 2009, however, the Correa administration again tried to wrestle some control of development in the northern border region from USAID.

A cable reported that the Ecuadorian government had told the Embassy that it wanted USAID to explore “host country contracting” for development projects. This would mean donor funds would be transferred to the Ecuadorian government which would contract directly with suppliers of goods and services, rather than USAID.

The Ecuadorians also requested more involvement in USAID’s “technical evaluation committees”, which select contractors and grantees for new development projects. The cable said that USAID already invited Ecuadorian representatives to participate in the committees, but “ensures that the USG [US government] maintains a majority vote”.

Ecuador’s requests were in accordance with the Paris Declaration on Aid Effectiveness, which was signed by 100 countries in 2005. In line with a growing international consensus, the declaration stipulates that developing countries should manage their own development work, and donors should align their aid to the developing country’s priorities, rather than their own.

The US Embassy was worried about committing to host country contracting in Ecuador in the long-term, and warned Washington that doing so could have implications for USAID programs in other countries in the region.

In an October 2009 cable, Hodges listed the host country contracting request as another example of the Ecuadorian government unreasonably asserting control over the country’s economic development.

Hodges complained that the Ecuadorians were “pushing donors, including USAID, to funnel all official assistance through the national development agency (AGECI), instead of through NGOs”.

Development aid was another area, according to Hodges, where “They want it their way”.

'Grandiose ideas'

Hodges took up this theme again, four months later, in one of the last cables from Ecuador in the WikiLeaks database. Hodges bemoaned the Ecuadorian government’s “desire for ownership of the development/poverty reduction agenda”.

The Ecuadorean government “insists on donors fulfilling to the maximum extent the GoE's [government of Ecuador] interpretation of the Paris Declaration (PD) and Accra Agenda for Action (AAA)”, wrote Hodges. It “expects us not only to collaborate more with GoE institutions in the implementation of assistance programs, but also to give the country direct control of the funds with few or no conditions”.

Ecuador’s challenge to USAID’s modus operandi threatened to undermine its ability to impose the US’s development agenda on Ecuador. This agenda fundamentally reflects the interests of the US and not the recipients of its aid.

The embassy was concerned that conceding to Ecuador’s requests would set a precedent that would affect USAID’s activities in other countries.

The US ambassador was clearly angered by Ecuador’s latest affront to US authority. Relations between the US and Ecuador had deteriorated, wrote Hodges, because “Correa's political-economic philosophy is charged with grandiose ideas”.

The ideas the ambassador deemed to be grandiose were “asserting Ecuador's sovereignty, rejecting foreign interference, and ensuring state control of strategic economic assets and the national security apparatus”.

As well as development aid issues, the cable cited “constant difficulties in implementing USG law enforcement and military programs” as evidence of the Correa government’s “hyper-nationalism”.

According to the cable, USAID had compromised on the bilateral assistance agreement by allowing the Ecuadorian government more involvement in reviewing its work plans and agreeing to try host country contracting as a pilot project.

However, Hodges anticipated this year’s announcement of USAID’s departure from Ecuador, writing: “the more complicated question is what happens with the 2011 and subsequent bilateral USAID agreements”.

The cable concluded: “While the evolution of international development is pushing us to cede greater control over at least development/poverty reduction assistance, the reality is that Ecuador is not a reliable and credible partner.

“Correa and his government's obsession with ensuring sovereign control, their insular attitudes towards dealing with international donors and institutions, and their bi-polar relationship with the U.S., will continue to complicate our operations in this country.”

US disrespect for the sovereignty of Latin American nations led the Bolivarian Alliance for the Peoples of Our America (ALBA), an anti-imperialist bloc of which Ecuador is a member, to call for the withdrawal of USAID from its member states in a 2012 resolution.

Citing USAID interference, the ALBA resolution states: “Our countries do not need any kind of external financing for the maintenance of our democracies, which are consolidated through the will of the Latin American and Caribbean people, in the same way that we do not need organisations in the charge of foreign powers which, in practice, usurp and weaken the presence of state organisms and prevent them from developing the role that corresponds to them in the economic and social arena of our populations.”

The impending withdrawal of USAID from Ecuador follows Bolivia’s expulsion of the agency in 2013.

[This is the final article in a seven-part series based on diplomatic cables published by WikiLeaks that have largely not been reported on before.]

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