Ecuador: Between China and a hard place
A provider of sanctuary to WikiLeaks founder and champion of transparency Julian Assange and staunch ally of the recently bereaved Venezuela, Ecuador has been punching above its weight of late. In terms of international relations, that is.
Ecologically speaking, Ecuador is a bonafide heavyweight. According to Conservation International, it is one of the world’s 17 megadiverse countries, with the highest density of biodiversity per km on Earth. The Galápagos Islands alone should cement the nation’s global environmental value, but even without them Ecuador’s natural wealth is invaluable. Half the area of the country is covered by the Amazon rainforest and Ecuador is home to 11 national parks, 10 wildlife reserves and 9 ecological reserves. The constitution of Ecuador is the first to recognize the rights of nature. Not bad for a relatively poor country with a population of 15 million.
Ecuador is also sitting on an estimated 846 million barrels of untapped oil in its Yasuni National Park. Most of the Ecuadoran Amazon south of the Yasuni is already covered in oil exploration blocks. Now Ecuador is planning to sell off over three million hectares of (around 11.6 sq mi) of pristine rainforest to the highest bidding Chinese oil firms.
China’s new investment guidelines explicitly state that Chinese businesses operating abroad should “promote harmonious development of local economy, environment and community”, while Ecuador’s own government, lead by Rafael Correa, says its policy is to not open blocks of land to the bidding without support of the local communities, though they are entitled to by Ecuadoran law. However, according to Amazon Watch, several tribal groups claim they have not consented to the planned auction for oil projects on their lands.
The motivation for the government of Ecuador this time may not be development, but rather debt relief.
From the Guardian:
Critics say national debt may be a large part of the Ecuadorean government’s calculations. Ecuador owed China more than £4.6bn ($7bn) as of last summer, more than a tenth of its GDP. China began loaning billions of dollars to Ecuador in 2009 in exchange for oil shipments. More recently China helped fund two of its biggest hydroelectric infrastructure projects. Ecuador may soon build a $12.5bn oil refinery with Chinese financing.
In the meantime, the Yasuni ITT Trust Fund, an attempt to raise enough money to finance the protection of the Yasuni against exploitation for oil, is still accepting donations. The idea of the fund is that if Ecuador can raise half ($3.5 bn US) of the $7 bn it would receive from oil in the Yasuni, it will forgo any drilling in the park. The question Ecuador, a country where 35% live below the poverty line, is asking the world is whether the “lungs of the Earth” and a vast treasure trove of biodiversity, is worth preserving for those with the wealth to preserve it.
This is not simply an “environmental ransom”, but an opportunity for rich nations to act in the long-term interests of the entire globe instead of simply their own short-term economic and political goals. Imagine, Ecuador was recently named the number one retirement destination for North Americans by Forbes Magazine. Want to keep your number one foreign retirement spot, North Americans?