Ecuador is repaying its debt with oil



Imagine that you’re living on a lake where a new hydroelectric plant will be built. The lakeshore will be covered in concrete. Plant and animal life will disappear. No more swimming in the lake or strolling along the shore or enjoying the pleasant restaurant. As a resident, you belong to the losers in terms of quality of life. The energy produced by the plant will not even go to your country. Rather, it will be sold abroad to sustain your country’s government.  


What for many – at least so far – remains a purely hypothetical exercise is the hard reality in many countries around the world.


Let’s descend for a moment to the steep banks of the Rio Napo in Ecuador. Here, in the middle of the Yasuni Nation Park, we enjoy a symphony of sight and sound. Parrots and parakeets are just different. They fly to the river by the thousands to nibble on the clay in the cliffs above. The minerals in the soil neutralize the various poisons they consume in their routine diet of fruits. So what happens?


For generations the indigenous peoples of the region have lived from its plants and animals without exhausting these precious resources. But their way of living, in tune with nature, has no future. The Ecuadorean government has decided to drill for oil here, although the Yasuni National Park has been designated an UNESCO Biosphere Reserve since 1989.


The indigenous peoples are suffering,” said one village resident. “All that dynamite, the clear-cutting of the forest for the pipelines. The oil will destroy our park just as it has our community. It has split us in two and made enemies out of friends. Some want to go for the quick cash, others think about their children and grandchildren, who will finally pay the price for this exploitation.” She has battled with her sister and her uncles and she intends to fight further, even if little hope for victory remains.


A system is a work here. The system of a monetary and economic order that demands absolute obedience to its rules. One of these rules is that debts must be repaid to assure one’s creditworthiness. And Ecuador owes China billions of dollars, repayable in oil. The short-term damage to Ecuador’s economy from being delinquent in its debt servicing is regarded as a greater threat than the destruction of the lives of billions of creatures for lands that are of no immediate use. That’s the reasoning for the government granting its first oil production concessions. They will not be the last. They accept that their actions will destroy an ecosystem deemed vital to global survival. And for the last of the indigenous peoples that live only in the rainforests, the end of their existence is in sight.


Ecological crises often coincide with social crises. In Ecuador’s case it is clear that these crises are directly related to our monetary and economic system. The constraints of our capitalistic money do not allow investments without monetary gain to be made. This has been very clear in Ecuador’s case. The government had actually proposed to ban any resource exploitation within the park and leave it untouched, on the condition that the country would receive half the proceeds for the oil reserves. This would have been around 350 million dollars a year, over a thirty-year period. Only thirteen million dollars were paid into the specially created funds. This was not due to lack of transparency or a lack of will: other states also have a duty to repay their debts and cannot afford to pay such amounts if they do not yield a return.


The decision by Ecuador’s government is not due to any fault or failure, stupidity or corruption, but is an inevitable extension of our economic order.


The example of Ecuador shows how local and global systems can collide and force people into dire straits. What is hiding behind this predicament and made visible are the characteristics of money and our monetary and economic system.



Signet Sunflower Foundation