WORLD BANK AGREEMENTS IMPOVERISH ECUADOR

Greg Palast meets with Ecuadors President Palacio -- It's the oil and the bonds, stupid.

George Bush has someone new to hate. Only twenty-four hours after Ecuador's new president took his oath of office, he was hit by a diplomatic cruise missile fired all the way from Lithuania by Condoleezza Rice, then wandering about Eastern Europe spreading "democracy." Condi called for "a constitutional process to get to elections," which came as a bit of a shock to the man who'd already been constitutionally elected, Alfredo Palacio.
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"Sucio Lucio" (Dirty Lucio, as the graffiti tags him) had won election in 2002 promising to break away from the supposedly voluntary austerity plan imposed by the World Bank. Then, within a month of taking office, Gutierrez flew to Washington. There he held hands with George Bush (a photo infamous in Quito), and US Treasury officials instructed him in the financial facts of life. Lucio returned to Quito, reneged on his campaign promises and tightened the austerity measures, including raising the price of cooking gas. The public, after a dispirited delay, revolted. After Lucio fled last month, the nation's congress recognized the vacancy in Ecuador's Oval Office and filled it with the elected vice president, in accordance with the Constitution.

Given the oil windfall, Palacio sees no need to follow Gutierrez's path to economic asphyxiation. "It is impossible that they condemn us not to have health, not to have education," he told me. He made it clear that handing over 90 percent of his nation's new oil wealth would not stand.

That's not what the Bush Administration wanted to hear.

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