[Marxism] Gutierrez out, and no loss! Wall Streeters say change will 'calm streets' and help 'appease investors'
ffeldman at bellatlantic.net
Wed Apr 20 20:53:27 MDT 2005
I wonder how long Bucaram will now take to drop his Chavez pose, which
was also Gutierrez's get-elected pose, now that he has a shot at getting
Wall Street's green light for a return to office.
Ecuador's President Gutierrez Ousted Amid Protests (Update15)
April 20 (Bloomberg) -- Ecuador's President Lucio Gutierrez was ousted
by Congress today, the third leader to be removed since 1997, amid
allegations he stacked the Supreme Court with allies and helped clear an
ex-president of corruption charges.
Lawmakers voted 60 to 2 to replace Gutierrez, 48, then swore in Vice
President Alfredo Palacio, a 66-year-old cardiologist, as president,
Quito-based Canal Uno television reported. Gutierrez was granted
political asylum at the Brazilian embassy in Quito.
``Lucio has fallen!'' protesters chanted in the capital Quito, according
to the station.
The political tumult pushed down Ecuador's bond due 2012 to a
seventh-month low, and spurred declines in debt sold by neighboring Peru
and Colombia. Ecuador, South America's fifth- largest oil producer, is
in the midst of its fastest economic expansion in a decade, helped by
record high oil prices.
Protests intensified in the past week over Gutierrez's move to replace
members of the Supreme Court, which this month cleared a former
president, Abdala Bucaram, of corruption charges.
``Today the dictatorship, immorality, arrogance and fear have come to an
end,'' Palacio, a U.S.-trained physician and former health minister,
said at his swearing in, broadcast on Canal Uno. ``From today on, this
government will be a government of the people. Here there will be no
pardon or forgetting for those who have violated the constitution and
who oppressed the people.''
Authorities closed airports in Quito and Guayaquil, and television
showed images of crowds gathering on the runways.
Ecuador's Attorney General Cecilia Armas told CNN en Espanol that
Gutierrez had been arrested for ``flagrant crime, for having ordered the
military out and repression against the people'' and held at a military
base. Two people were killed in protests today and dozens injured, Canal
Later, Brazil's Foreign Affairs Ministry said it had granted asylum to
Gutierrez, allowing him to remain at the embassy until he gets
permission to leave the country.
Popular protests caused the military to remove ex-President Jamil Mahuad
in 2000 and lawmakers to vote out Bucaram in 1997.
Ecuador's bond due 2012 lost 4 cents on the dollar at 6:52 p.m. in New
York to 96.5 cents. The yield rose 0.84 percentage point to 12.73
percent, according to JPMorgan Chase & Co. Peru's 9 1/8 percent bond due
2008 dropped 4.5 cents on the dollar to 108.5, boosting the yield to 5.7
The extra yield investors demand to hold Ecuador's bond due 2012 instead
of a comparable maturity U.S. Treasury climbed to 8.7 percentage points,
compared with 7.2 percentage points three months ago.
``We are following the developments closely,'' U.S. National Security
Council spokesman Frederick Jones said in a statement read over the
telephone in Washington. ``We continue to support constitutional
stability and the rule of law in Ecuador and urge all Ecuadoreans to
come together peacefully to resolve their issues.''
In Venezuela, President Hugo Chavez said he was concerned.
``We are worried about Ecuador and its institutions,'' Chavez said at a
press conference in Caracas. Ecuador's government has yet to appoint a
Supreme Court after Congress on April 18 dismissed justices appointed by
Peru as head of the Organization of American States Permanent Council
called an emergency meeting tomorrow in Washington to discuss the
situation in Ecuador, Peruvian Foreign Minister Manuel Rodriguez said in
an e-mailed statement.
The minister ``expressed his deep concern for the situation of
democratic institutions in Ecuador,'' according to the statement.
Gutierrez, who took office in 2003, oversaw the fastest, longest
economic expansion in Ecuador in a decade. The country, a former member
of the Organization of Petroleum Exporting Countries, is South America's
fifth-largest oil producer with daily output of about 530,000 barrels.
As growth accelerated, the president failed to draw more support from
Indians and other residents who say his budget deficit-cutting programs
have done little to ease poverty in the country of about 12 million
people, said analysts such as Eduardo Gamarra, a political science
professor at Florida International University in Miami.
Gutierrez's term was supposed to end in January 2007.
``I'm very sad that Gutierrez is our third president who can't complete
his term,'' said Pablo Garcia, a 27-year old hotel worker in Quito, in a
telephone interview. ``This is showing the world that we are
ungovernable and that's not good for our economic prospects. Investors
and companies seek a stable country to invest, and we are not currently
Gutierrez clashed with Congress last year in a bid to renew a loan
agreement with the International Monetary Fund. Congress in August
rejected his plan to ease restrictions on firing state works and open
the energy industry to foreign investment, part of a bill intended to
reduce spending and help bolster investor confidence.
Opposition against Gutierrez grew in December, when members of the
governing coalition in Congress dismissed 27 of 31 Supreme Court
justices at his request. At the time, the court was considering
corruption charges against two former presidents, Bucaram and Noboa,
according to Agence France-Presse.
The president on April 16 dissolved the Supreme Court and declared a
state of emergency for Quito -- before revoking the order 19 hours
Gutierrez said in an April 16 interview with Reuters that opponents were
trying to ``destabilize the president'' for political reasons, ahead of
next year's election. He denied allegations he had arranged for charges
against Bucaram to be dropped to allow the ex-president to return from
exile in Panama in exchange for votes from Bucaram backers in Congress.
``There was no deal for Bucaram to return to the country,'' Gutierrez
said in the interview.
Earlier today, the chief of the military's joint command, Victor Hugo
Rosero, said he was withdrawing support for Gutierrez ``for the country
and the peace,'' the BBC reported. Quito's police chief Jorge Poveda
resigned, saying he didn't want to clash with pro- or anti-government
protesters, after Gutierrez supporters who came to the capital armed
with machetes and guns were prevented from reaching the city center by
anti-government crowds, BBC said.
The change in leadership ``should bring some calm back to the streets
and may go some way to appeasing investors,'' said Washington Perez, a
currency trader at Banco Solidario in Quito. ``Gutierrez meddled in
independent institutions and that put our investment credibility at
Ecuador, which defaulted on some of its debts in 1999, is rated Caa1 by
Moody's Investors Service, the same level as Argentina, and B- by
Standard & Poor's.
The government adopted the U.S. currency as its legal tender in 2000,
abandoning the sucre after it collapsed.
With oil prices still high and Ecuador's currency linked to the dollar,
a change in government is unlikely to hurt the economy, said Jose
Cerritelli, an Andean region economic analyst for Bear Stearns Co. in
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