Ecuador declared a state of emergency as police and soldiers protesting wage cuts blocked roads, shut the airport and roughed up President Rafael Correa.
The president, speaking from a hospital room, said he is the target of a coup attempt, and regional leaders appealed for calm. None of the groups protesting has demanded Correa step down, nor have opposition members called for his ouster.
Correa said security forces pointed guns at him as he tried to calm demonstrators at a police station. He said he was hurt in the scuffle and had to wear a gas mask to escape further harm. Correa, who was in the hospital for treatment of his injuries, said protesters were surrounding the facility and attempting to break into his room.
“Here I am. If they want to kill me, go ahead,” Correa said after protesters hurled a tear-gas canister at him and doused him with water at the police station while burning tires outside the presidential palace. “I won’t back down.”
The protests plunged Ecuador, which has seen three presidents ousted in the past 13 years, into political turmoil that could destabilize the 47-year-old economist’s rule. Opposition to Correa, who took office in 2007, has grown since July when the president pushed through an oil law by decree and ignored congressional objections to his plan to increase the state’s control over universities and local budgets.
Chavez Weighs In
“The social chaos weakens the government’s credibility,” Sebastian Abad, an analyst at Analytica Securities CA Casa de Valores, said in a telephone interview from Quito. “This is a radical protest by police. It’s a big risk for the president.”
Venezuelan President Hugo Chavez, who spoke with Correa by telephone, backed Correa’s claims of a coup and said it had been organized by the political opposition. Chavez, speaking on state television, said the life of his ally in the eight-nation Alba political bloc was in danger.
“It would be very naive to think that this has only a salary motive or that it’s due to some benefits that some say were eliminated,” Chavez said on Telesur. “We are facing a new attack from the fascist beasts -- it’s a coup attempt.”
Argentina, Colombia, Mexico and Brazil were among other neighbors who expressed concern in response to the government’s call for international solidarity. Chavez and other regional leaders are traveling to Buenos Aires for an emergency summit of the Union of South American Nations to defuse the political crisis.
OAS Resolution
The Organization of American States unanimously adopted a resolution to support Correa’s government and “defend democracy” against police protests.
The OAS should act “severely” and quickly to prevent the coup, Secretary-General Jose Miguel Insulza said today in an emergency meeting in Washington. Insulza spoke with Correa and told him he had the group’s “full support,” according to an e-mailed statement from the OAS.
Ecuador’s security situation has “degraded significantly,” the U.S. Embassy in Quito said in an alert posted on its website. The embassy urged Americans in Ecuador to stay in their homes and possibly to delay their travel plans.
The extra yield investors demand to hold Ecuadorean dollar bonds instead of U.S. Treasuries was little changed at 10.36 percentage points at 5:28 p.m. New York time, according to JPMorgan Chase & Co.’s EMBI+ index. Ecuadorean debt is the second-riskiest after Venezuela’s among 15 emerging markets tracked by JPMorgan.
Bond Yields
The yield on Ecuador’s 9.375 percent bonds maturing in 2015 rose 1 basis point to 11.78 percent, according to Bloomberg prices. The bond’s price fell 0.29 cent to 90.82 cents on the dollar.
Jaime Nebot, the mayor of Guayaquil and a political foe of Correa, denied on local television that the opposition had any involvement in the protests and said he would “never support” a coup.
Correa’s claims he’s at risk of being ousted may be an attempt to drum up support among his allies, said Andres Ochoa, a researcher at the Washington-based Council on Hemispheric Affairs, said that.
“There is no clear leader trying to topple Correa,” Ochoa said from Quito. “This is a protest gone wrong.”
History of Turmoil
Correa has introduced a modicum of stability to the politically turbulent nation, which has had 105 presidents in 139 years. Last year he became the first president of the Andean nation of 14 million to win two terms in a row. The smallest member of the Organization of Petroleum Exporting countries, Ecuador uses the U.S. dollar as its official currency.
Ecuador’s government is rewriting at least 31 laws, including industrial, financial, labor, water and land regulations, after approving a new constitution in 2008.
Looters ransacked banks, supermarkets and shopping malls in the port city of Guayaquil amid a lack of security, CRE Radio reported. Classes were canceled nationwide and all television stations were broadcasting the government channel.
Congressional Measure
Ecuadorean police and soldiers are objecting to a measure passed by congress last night that would delay automatic promotions and slow salary increases. Correa defended his policies, telling Radio Publica in an interview that salaries had doubled since he came to office in 2007.
General Luis Ernesto Gonzalez, chairman of the Joint Chiefs of Staff, said the armed forces “respect the rule of law” and are subordinate to the president, according to comments broadcast by CNN. The military may patrol the streets to “guarantee external and internal security,” he said.
All flights into Quito have been canceled, Luis Galarraga, a spokesman for Quiport, the company that operates the airport, said today in a telephone interview. Protesters remained inside the airport this afternoon, he said.
Oil Output
PetroEcuador, the South American country’s state-owned oil company and biggest source of export revenue, said operations were normal as the military guarded refineries and oil fields.
Ecuador pumped 1.6 percent of OPEC’s total output this month, a Bloomberg News survey showed today. Ecuador accounts for 2.1 percent of U.S. oil imports, according to the most recent monthly data from the Energy Department.
Ecuador has a Caa3 long-term foreign currency credit rating from Moody’s Investors Service, eight levels below investment grade, while Standard and Poor’s rates the country’s debt B-, according to data compiled by Bloomberg. The Andean nation defaulted on $3.2 billion of international debt since 2008.
Ecuador’s credit rating shouldn’t be affected by the protests because it “already implies a high possibility of default,” Erich Arispe, a New York- based analyst at Fitch, said today in a telephone interview.
“Because the country has defaulted in the past and Correa’s reform did not solve the country’s problems, there is still fiscal vulnerability,” Arispe said.
To contact the reporters on this story: Nathan Gill in Quito at ngill4@bloomberg.net; Alexander Emery in Lima at aemery1@bloomberg.net
To contact the editor responsible for this story: Joshua Goodman at jgoodman19@bloomberg.net
http://jodnet.blogspot.com
The president, speaking from a hospital room, said he is the target of a coup attempt, and regional leaders appealed for calm. None of the groups protesting has demanded Correa step down, nor have opposition members called for his ouster.
Correa said security forces pointed guns at him as he tried to calm demonstrators at a police station. He said he was hurt in the scuffle and had to wear a gas mask to escape further harm. Correa, who was in the hospital for treatment of his injuries, said protesters were surrounding the facility and attempting to break into his room.
“Here I am. If they want to kill me, go ahead,” Correa said after protesters hurled a tear-gas canister at him and doused him with water at the police station while burning tires outside the presidential palace. “I won’t back down.”
The protests plunged Ecuador, which has seen three presidents ousted in the past 13 years, into political turmoil that could destabilize the 47-year-old economist’s rule. Opposition to Correa, who took office in 2007, has grown since July when the president pushed through an oil law by decree and ignored congressional objections to his plan to increase the state’s control over universities and local budgets.
Chavez Weighs In
“The social chaos weakens the government’s credibility,” Sebastian Abad, an analyst at Analytica Securities CA Casa de Valores, said in a telephone interview from Quito. “This is a radical protest by police. It’s a big risk for the president.”
Venezuelan President Hugo Chavez, who spoke with Correa by telephone, backed Correa’s claims of a coup and said it had been organized by the political opposition. Chavez, speaking on state television, said the life of his ally in the eight-nation Alba political bloc was in danger.
“It would be very naive to think that this has only a salary motive or that it’s due to some benefits that some say were eliminated,” Chavez said on Telesur. “We are facing a new attack from the fascist beasts -- it’s a coup attempt.”
Argentina, Colombia, Mexico and Brazil were among other neighbors who expressed concern in response to the government’s call for international solidarity. Chavez and other regional leaders are traveling to Buenos Aires for an emergency summit of the Union of South American Nations to defuse the political crisis.
OAS Resolution
The Organization of American States unanimously adopted a resolution to support Correa’s government and “defend democracy” against police protests.
The OAS should act “severely” and quickly to prevent the coup, Secretary-General Jose Miguel Insulza said today in an emergency meeting in Washington. Insulza spoke with Correa and told him he had the group’s “full support,” according to an e-mailed statement from the OAS.
Ecuador’s security situation has “degraded significantly,” the U.S. Embassy in Quito said in an alert posted on its website. The embassy urged Americans in Ecuador to stay in their homes and possibly to delay their travel plans.
The extra yield investors demand to hold Ecuadorean dollar bonds instead of U.S. Treasuries was little changed at 10.36 percentage points at 5:28 p.m. New York time, according to JPMorgan Chase & Co.’s EMBI+ index. Ecuadorean debt is the second-riskiest after Venezuela’s among 15 emerging markets tracked by JPMorgan.
Bond Yields
The yield on Ecuador’s 9.375 percent bonds maturing in 2015 rose 1 basis point to 11.78 percent, according to Bloomberg prices. The bond’s price fell 0.29 cent to 90.82 cents on the dollar.
Jaime Nebot, the mayor of Guayaquil and a political foe of Correa, denied on local television that the opposition had any involvement in the protests and said he would “never support” a coup.
Correa’s claims he’s at risk of being ousted may be an attempt to drum up support among his allies, said Andres Ochoa, a researcher at the Washington-based Council on Hemispheric Affairs, said that.
“There is no clear leader trying to topple Correa,” Ochoa said from Quito. “This is a protest gone wrong.”
History of Turmoil
Correa has introduced a modicum of stability to the politically turbulent nation, which has had 105 presidents in 139 years. Last year he became the first president of the Andean nation of 14 million to win two terms in a row. The smallest member of the Organization of Petroleum Exporting countries, Ecuador uses the U.S. dollar as its official currency.
Ecuador’s government is rewriting at least 31 laws, including industrial, financial, labor, water and land regulations, after approving a new constitution in 2008.
Looters ransacked banks, supermarkets and shopping malls in the port city of Guayaquil amid a lack of security, CRE Radio reported. Classes were canceled nationwide and all television stations were broadcasting the government channel.
Congressional Measure
Ecuadorean police and soldiers are objecting to a measure passed by congress last night that would delay automatic promotions and slow salary increases. Correa defended his policies, telling Radio Publica in an interview that salaries had doubled since he came to office in 2007.
General Luis Ernesto Gonzalez, chairman of the Joint Chiefs of Staff, said the armed forces “respect the rule of law” and are subordinate to the president, according to comments broadcast by CNN. The military may patrol the streets to “guarantee external and internal security,” he said.
All flights into Quito have been canceled, Luis Galarraga, a spokesman for Quiport, the company that operates the airport, said today in a telephone interview. Protesters remained inside the airport this afternoon, he said.
Oil Output
PetroEcuador, the South American country’s state-owned oil company and biggest source of export revenue, said operations were normal as the military guarded refineries and oil fields.
Ecuador pumped 1.6 percent of OPEC’s total output this month, a Bloomberg News survey showed today. Ecuador accounts for 2.1 percent of U.S. oil imports, according to the most recent monthly data from the Energy Department.
Ecuador has a Caa3 long-term foreign currency credit rating from Moody’s Investors Service, eight levels below investment grade, while Standard and Poor’s rates the country’s debt B-, according to data compiled by Bloomberg. The Andean nation defaulted on $3.2 billion of international debt since 2008.
Ecuador’s credit rating shouldn’t be affected by the protests because it “already implies a high possibility of default,” Erich Arispe, a New York- based analyst at Fitch, said today in a telephone interview.
“Because the country has defaulted in the past and Correa’s reform did not solve the country’s problems, there is still fiscal vulnerability,” Arispe said.
To contact the reporters on this story: Nathan Gill in Quito at ngill4@bloomberg.net; Alexander Emery in Lima at aemery1@bloomberg.net
To contact the editor responsible for this story: Joshua Goodman at jgoodman19@bloomberg.net
http://jodnet.blogspot.com
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