The foreign policy of the Rafael Correa administration (2007-2017) was the policy initiatives towards other states by the former President of Ecuador, as differed to past, or future, Ecuadorian foreign policy. Correa's foreign policy was somewhat similar to that of the other leaders of the Bolivarian Alternative for the Americas (ALBA) such as Hugo Chavez and Evo Morales. This entailed a rough division between relations with other states of the Americas (led by the United States) and the rest of the world (namely Iran).
Background Rafael Correa took his first term of office as president of Ecuador on 4 December 2006 by the country's electoral court. This inauguration was attended by most regional leaders, as well as the Iranian President and Spanish Crown Prince. His second term was commenced on 10 August 2009, the same day as Ecuador's bicentennial. The second term took place amongst greater fanfare with several South American dignitaries in attendance, such as President of Argentina Cristina Fernández de Kirchner, President of Bolivia Evo Morales, President of Cuba Raúl Castro and President of Venezuela Hugo Chávez. Correa continued to reiterate a promise to continue the "socialist revolution," his plans to end poverty and to continue "stamping out the structural causes of poverty." He also said the actions of the media were opposing his government.
Economic moves Repudiation of Ecuador's foreign debt
Correa has called for a renegotiation of Ecuador's $10.2 billion external debt, at 25% of GDP,Dudley, Steven (January 16, 2007). "Ecuador's new leader walks tightrope", Kansas City Star. following the example of Argentine President Néstor Kirchner. In his inaugural address on 15 January, Correa stated his belief that part of Ecuador's external debt is illegitimate, because it was contracted by military regimes.Pimental, Lester, "Ecuador, Calling Debt 'Illegitimate,' May Repay 40%", Bloomberg.com, 18 January 2007 He also denounced the "so-called Washington Consensus.""Ecuador's new leader has no kind words for US", CBC News, 15 January 2007 Correa has threatened to default on Ecuador's foreign debt, and to suspend review of the country's economy by the World Bank and the International Monetary Fund;Pimental, Lester (January 18, 2007). "Ecuador, Calling Debt `Illegitimate,' May Repay 40%", Bloomberg indeed, on April 26, 2007, he ordered the expulsion from Ecuador of the World Bank's country manager."Ecuador expels World Bank envoy", BBC News, 26 April 2007
In May 2007, evidence surfaced that some of the Ecuadorian government rhetoric might have been part of an alleged market manipulation to benefit Ecuador from movements in the price of financial instruments linked to Ecuadorian Bonds."Caught on camera A setback for Rafael Correa" The Economist, 26 July 2007 A fall in Ecuador bond prices, ignited by aggressive default rhetoric, would trigger a buyback by Ecuador, financed by Venezuelan banks. This strategy collapsed due to operations engaged by Venezuelan financial institutions who profited from the market swings. Correa referred to the allegations as a conspiracy from a powerful banker."El caso Patiño sacude todo el tablero político" El Comercio, 12 June 2007 "Ecuador Prosecutors Probe Patino, Banker Meeting" Bloomberg, 24 May 2007"Una parte no revelada del video señala a venezolanos" . El Universo, 29 May 2007 On July 26, 2007, Rafael Correa replaced finance minister Patiño, due to Patiño's appearance in a video recording, apparently discussing the market manipulation. Patiño then assumed a newly created position responsible for the Pacific coast region and later assumed the Politics Affairs Ministry.. Financial Times. July 26, 2007
Correa's political orientation has helped foster ties with Venezuela, which supported Ecuador on several projects. But with the 2008 financial crisis and Ecuador's looming default on $510 million of bonds, there was rumor of a possible rift. The drop in the price of Ecuador's biggest export, oil, forced the country to use a 30-day grace period to decide whether to make a $30 million interest payment that was due on November 15. Venezuela apparently owns structured securities tied to Ecuador's bonds that would then force Venezuela to pay $800 million if Correa does not make the payment. Venezuela's potential losses may cause a strain in relations between two, who meet every three months and espouse similar socialist themes. An analyst from Barclays said "Chavez will have something to say...[He] will encourage Correa not to default."Pimentel, Lester; Cancel, Daniel (November 17, 2008). Ecuador's Correa May Burn Ally Chavez in Bond Default. Bloomberg.
On December 12, Correa said that an interest payment due on Ecuador's national debt would not be made. He declared the country in default: "We are ready to accept the consequences". He described the debt as "immoral", saying the government would take its findings that past debt sales were tainted by graft and bribes to international courts.
In a radio address on December 13, Correa said that he wants to force a “big discount” on creditors, whom a day earlier he called “true monsters who won’t hesitate to crush the country”.
"I have lost sleep over this ... this will cost us tears and sweat but I think we are doing the right thing." Correa, who endorses anti-debt NGO Jubilee 2000's slogan "life before debt", is popular among Ecuadorians for his stance against foreign investors. He has already forced foreign companies to change contract terms in the oil and mining industries and ejected a major Brazilian building company in a dispute over a dam construction as he seeks to increase state income.
Buy back bonds On April 16, 2009, Finance Minister Maria Elsa Viteri embarked on a trip to Europe in a mission to present Ecuador's offer to buy back global bonds 2012 and 2030 at 30% of their current value. Bond holders had until mid-May (extended to June 3) to accept or make an offer. According to the Finance Minister, at least 70% of bond holders have accept the governments' offer. On May 29, Ecuador made a payment of approximately 300 million dollars to part of the bond holders. The Finance Minister has said that on June 13, the government will reveal all the details of the repurchase. According to government reports, all or almost all of the bonds will be retired from the global market at a price of 30-35 on the dollar. These bonds constitute one fourth of Ecuador's debt. If Ecuador is able to retire these bonds, it would reduce the nation's debt by $2 billion, making this a great economic victory for president Rafael Correa and his administration.
On June 11, 2009, Ecuador announced that it had successfully bought 91% of the bonds at a cost of 30-35 cents to the dollar. The Finance Minister said that the remaining bond holders will have another opportunity to sell their bonds at the same price of 35%. This move will nominally reduce the total foreign debt by $2 billion (although it might lead to losing access to private financial markets in the future).
Summit of the Americas During the sixth Summit of the Americas in Cartagena, Colombia in 2012, Correa said Ecuador would boycott the event due to the exclusion of Cuba and the lack of discussion on "essential issues;" however he added that this was not a slight on Colombia or Santos.
Relations with specific countries China Correa has stated that relations with China are extremely good and strategic for the country. He has maintained that it is “good business” to obtain credits with interests of 7% to finance projects with a profitability between 23% and 25%. He also complained that these types of operations were demonised and denied that Ecuador is beholden to, or has mortgaged, its petroleum trade with China. Correa stated that in 2006, 75% of Ecuadorian petroleum went to United States, in exchange for nothing. “Now we have 50% of the committed petroleum with China, in exchange for thousands of millions of dollars to finance the development of this country.”
On January 2, 2010, Correa and his Chinese counterpart, Hu Jintao, exchanged congratulatory messages to celebrate the thirtieth anniversary of the establishment of diplomatic relations between both countries.
In 2012, China loaned Ecuador 240 million dollars for the purpose of overhauling the Ecuadorian security system. This system comprises 4,300 new surveillance cameras, drones, automated evidence processing systems, and increased manpower to manage each of these new technologies, which have been collectively dubbed the ECU 911 Integrated Security Service. Much of this new hardware has been developed in Ecuador, but in laboratories designed and set up by China National Electronics Import and Export Corporation (CEIEC), which is a state-owned company and a subsidiary of national defence contractor China Electronics Corporation (CEC). The CEC has also undertaken similar surveillance overhauls in Venezuela and Bolivia, and has also introduced technology to monitor the Amazon Rainforest in Brazil. The Ecuadorian government has highlighted the benefits of this extensive security system, which has been installed across the nation's 24 provinces. They argue that it has been able to decrease the response time for everyday emergencies such as life-threatening illness, and have cited the system as a large factor in the dramatic drop in crime in Ecuador since its installation. Some individuals have expressed concern about the nature and the pervasiveness of these technologies, however, and how they may be used to create an Ecuadorian police state.
Colombia
Correa withdrew his government's ambassador in Bogotá, Colombia, and ordered troops to the country's border following the 2008 Andean diplomatic crisis in early March 2008. On 3 March 2008, Colombia's police said that documents found in a camp in Ecuador where Colombian troops killed Raul Reyes, a top guerrilla boss, showed ties between the FARC rebels and Correa, including contacts about political proposals and local military commanders.Colombia says FARC documents show Correa ties, Reuters, 3 March 2008. Correa denied the accusations, calling them lies.Acusación de Colombia es una patraña, El Comercio, 3 March 2008 Correa also said that a deal to release political prisoners – including former Colombian Sen. Ingrid Betancourt – was nearly complete before the 1 March 2008 Colombian raid into his country. On 5 March 2008, Correa and Venezuelan president Hugo Chavez met to discuss Colombia's attack and made a series of accusations against Colombia's government.Chavez: Cross-border raid a 'war crime', CNN, 6 March 2008 During the meeting, Correa dismissed Colombia's president Álvaro Uribe as just a "puppet" while others are the "puppet masters".Rafael Correa insiste en la condena El Comercio, 6 March 2008
At a Rio Group summit held in Santo Domingo, Dominican Republic, on 7 March 2008, after a heated exchange of accusations between Correa and Uribe, the diplomatic crisis was temporarily resolved with Colombia's apologies for the attack and reassurances that it won't be repeated. Correa said that with this resolution Latin America was starting a new era where international principles of justice will have preeminence over power.América Latina empieza nueva era de principios, justicia y derecho: Correa El Comercio, 8 March 2008
Currently, there are no diplomatic nor consular relations between Colombia and Ecuador. Correa has declined to resume diplomatic relations until Colombian government fulfill these five conditions: 1. Send an apology for the attack, which has been already done. 2. Send more troops to the south border of Colombia, now in hands of guerrillas and regular criminal bands. 3. Stop trying to link Ecuadorian government with FARC guerrillas. 4. Avoid using chemical products on the common border, which has caused several injuries on the local population, both Colombian and Ecuadorian, and