☭ This is Ecuadorian Socialism ☭
☭ SOCIALISM IN ACTION ☭
REVENTADOR, Ecuador — The dam sits under the glare of an active volcano, with columns of ash spewing toward the sky. Officials had warned against the dam for decades. Geologists said an earthquake could wipe it away.
Now, only two years after opening, thousands of cracks are splintering the dam’s machinery. Its reservoir is clogged with silt, sand and trees. And the only time engineers tried to throttle up the facility completely, it shook violently and shorted out the national electricity grid.
This giant dam in the jungle, financed and built by China, was supposed to christen Ecuador’s vast ambitions, solve its energy needs and help lift the small South American country out of poverty.
Instead, it has become part of a national scandal engulfing the country in corruption, perilous amounts of debt — and a future tethered to China. Ecuador’s president at the time, Rafael Correa, was a left-wing Socialist who had vowed to free his country from the orbit of the United States.
Elected in 2006 under a surge that brought leftists to power across Latin America, Mr. Correa took aim at the United States with fiery, anti-imperialist speeches. In 2008, he refused to renew a lease that allowed American anti-narcotics surveillance flights to operate from an Ecuadorean air force base.
Soon, Western financial institutions fell in Mr. Correa’s cross hairs. He denounced the International Monetary Fund, saying it put restrictions on his spending. Then in 2008, he defaulted on $3.2 billion of his country’s foreign debt and invited China to fill in the breach.
Nearly every top Ecuadorean official involved in the dam’s construction is either imprisoned or sentenced on bribery charges. That includes a former vice president, a former electricity minister and even the former anti-corruption official monitoring the project, who was caught on tape talking about Chinese bribes.
Then there is the price tag: around $19 billion in Chinese loans, not only for this dam, known as Coca Codo Sinclair, but also for bridges, highways, irrigation, schools, health clinics and a half dozen other dams the government is scrambling to pay for.
It doesn’t matter whether Ecuador can afford them.
China gets paid either way.
To settle the bill, China gets to keep 80 percent of Ecuador’s most valuable export — oil — because many of the contracts are repaid in petroleum, not dollars. In fact, China gets the oil at a discount, then sells it for an additional profit.
Pumping enough oil to repay China has become such an imperative for Ecuador that it is drilling deeper in the Amazon, threatening more deforestation.
China made its plans clear a decade ago, when it swept into Latin America during the global financial crisis, tossing governments an economic lifeline and promising to “treat each other as equals,” a clear swipe at American dominance.
It worked. China, now South America’s top trading partner, has seeded the region with infrastructure and a staggering trail of loans.
https://www.nytimes.com/2018/12/24/world/americas/ecuador-china-dam.html