On July 8, the government of Ecuador's left-wing President Rafael Correa took over three television stations and nearly 200 private companies, prompting the resignation of the finance minister.
The companies seized include the TC Television, TC Noticias and Gamavision television stations, as well as another 195 insurance, construction, real estate and other businesses, all owned by the Isaias Group.
The take-overs are linked to embezzlement charges surrounding Filibanko Bank, which collapsed in Ecuador's financial crisis of 1998, and to the Isaias brothers, who are now living as fugitives in the US and are wanted on criminal charges in Ecuador.]
Debt
While government representatives have given assurances that the assets would be auctioned off to repay shareholders with outstanding claims from the 1998 financial crisis, finance minister Fausto Ortiz — described as the most "market friendly" member of Correa's government — had already resigned in protest.
Ortiz has been replaced by Wilma Salgado, perhaps signalling a return to the policy of cancelling "illegal" government debt, upon which Correa was elected in 2006. Unlike Ortiz, who had recently raised the prospect that Ecuador might take out more international loans, Salgado has promised she will prioritise social expenditure over debt repayment, and has previously campaigned for a debt moratorium.
Ecuador does not want to "continue submitting the population to the dictatorship of international financial markets", Salgado argued.
While people have expressed their support for Correa's seizure of the stations by shouting approval and honking car-horns, Estefano Isais, brother of the fugitive ex-bankers and owner of TC Television, claimed the seizure was an attack of freedom of the press.
The seizures are just the latest in a series of dramatic developments as the process unfolding in Ecuador nears one of its greatest tests — the vote on a new constitution.
Correa, elected president in 2006 with a pledge to "refound" the country, and build "socialism of the 21st century", began this process by initiating an elected constituent assembly to rewrite Ecuador's constitution.
Tensions
The pro-Correa Country Alliance (AP) won a majority in the elections for the assembly last September, and Alberto Acosta — a close ally of Correa — was installed to preside over it.
Both before and after the assembly began its work, however, it has come under incessant attacks from the traditional right-wing parties, who see it as a threat to their dominance of Ecuadorian politics, and Correa has faced a fierce onslaught in the opposition-controlled media.
However, tensions have been building within the Correa camp as well. Ecuador's economic dependence upon oil exports has placed Correa's government at loggerheads with the powerful CONAIE federation, representing Ecuador's 40% indigenous population.
In May, the CONAIE, largely responsible for toppling Correa's three predecessors, openly declared itself to be against Correa, after a number of violent confrontations over mining in Ecuador's fragile Amazon region and Correa's rejection of CONAIE's call for the constitution to recognise Ecuador as a "plurinational state".
Perhaps the most dramatic development, however, was the resignation on June 23 of Acosta as assembly president, apparently due to differences over whether or not to extend the July 26 deadline for the assembly to complete the new draft constitution.
While the assembly's mandate had already been extended by two months, Acosta, along with other assembly members, had argued that for the new charter to be sufficiently legitimate, the debate must be further extended.
Correa, and the leadership of AP, disagreed, seeking to put the new constitution to a referendum as soon as possible. At an impasse, Acosta resigned, although he remains a member of both the assembly and AP.
Some in the opposition see the resignation as a weakening of Correa's ruling alliance. Acosta is the second most popular political leader in the country after Correa, and has close ties to the indigenous and social movements.
The CONAIE expressed "deep concern" over Acosta's resignation, and openly considered withdrawing their representatives from the assembly. Acosta, however, has declared his ongoing support and commitment to Correa's project.
Mining
Among the proposals which Acosta brought to the assembly was a ban on open-cut mining in Ecuador as well as the right to water and protection of the environment in the constitution. This set him against foreign mining companies and more conservative elements within Correa's alliance, but gained him further popular support.
Acosta was quickly replaced by assembly vice president, Fernando Cordero, who now faces the challenge of debating and passing over 400 reforms before its deadline on July 26.
The 130-member assembly has quickly returned to work, proposing to lift the constitutional restriction on presidential re-election and to extend the limit to two consecutive terms. With Correa promising to resubmit himself for election next year after the new constitution is passed, he could therefore remain in office until 2017. The proposal, like the others being considered in the assembly, must still be ratified in a referendum.
Another decision of the Assembly has been to pardon up to 1200 small-time drug couriers known as "mules". Correa, whose father was jailed in the US for carrying drugs, proposed the pardons last year, declaring that punitive 10 year jail sentences for carrying as little as 100 grams of cocaine are absurd.
At the same time, the political drama that exploded after Colombia's March 1 attack on the Revolutionary Armed Forces of Colombia (FARC) left-wing guerrilla group on Ecuadorian soil continues. Ecuador is still refusing to re-establish diplomatic ties with its neighbour over its illegal cross-border attack.
Ecuador has also taken Colombia to the International Court of Justice for its illegal aerial spraying of toxic chemical herbicides over the Ecuadorian jungle, which has caused birth defects and extensive ecological damage.
In other matters, the oil fields taken back off oil company Occidental in 2006 for breach of contract will be converted into Petroamazonas SA, an independent state-owned company. The new mining law allows only for community consultation, but not the right of veto that activists and CONAIE were demanding.
[Duroyan Fertl edits http://ecuador-rising.blogspot.com.]