Death by Government – one long-term resident’s personal evidential account of how Ecuador is likely following Venezuela over the cliff … and why Correa’s “robolucion” must be outed as the epic failure and corrupt scam it really was.

There is always something awful and tragic about watching a perfectly good ship sink. It is of course, significantly more distressing if one is on board at the time! To further imagine the captain and crew themselves … those specifically in charge of your and the ship’s well-being, were entirely responsible for the sinking … is almost inconceivable. Such is life, right now, in Ecuador, however. 😦

SinkingShip-Titanic

The purpose of this article is to document and describe the events which have transpired over the near-decade I’ve been here, as succinctly and cogently as possible, such that anyone interested will be able to understand the nature of the tragedy which has befallen Ecuador … and which has resulted in the dire conditions people are currently suffering here. Conditions which, following a very dubious recent election (which resulted in the same incompetent and corrupt party of the last decade retaining power – and which millions believe is fraudulent) … are only likely to get worse. Make no mistake, Ecuador is a bitterly divided country right now. It is in no way over-reaching, to suggest a Venezuela-style demise is now very much on the cards.

A bit of context … I’m just a lifelong (and now middle-aged) world-traveller and entrepreneur, who eventually became so disillusioned with the manifest failings, obligatory compromises, debt-requirements, and lifestyle shortcomings of the so-called “first-world” that I finally decided to permanently put significant distance between myself, and it. Basically, I wanted to remove myself from what I see as a pathological illness … the virus of so-called first-world “civilisation.” So … away I went! 🙂

Goodbye-LeoDiCaprio

The year was 2008, and Ecuador was the destination. Six weeks after relocation, the Global Financial Crisis (GFC) hit with full-force, completely paralysing the “developed” world, and upending everyone’s assumptions about how things worked (or rather, didn’t work). I felt vindicated … kind of like Steve Carell’s character in The Big Short … (a must-watch film if you’ve not yet seen it).

It seemed everything I had observed and commented unfavourably about for many years … was finally failing miserably, just as I’d long known it should. I felt I had somehow “escaped” … just in the nick of time … and I was grateful to be in my beautiful and peaceful new home, far from the madding crowd.

Meanwhile, I’d started a new real-estate business with a local partner in my adopted home in southern Ecuador, and it was going well. We had got up and running, just ahead of the curve of change which sent many North-Americans scurrying southwards. They were headed this way for many reasons, but foremost amongst them was a profound (post-GFC) disillusionment with the US, its government, its corporatocracy, and the resultant financial inability for “average folks” to maintain a reasonable lifestyle anymore (especially in retirement).

It seemed there was a newly emergent critical mass of people realising the “game” was rigged against them, and had been for some considerable time. The quest for real adventure and meaningful lifestyle change was also present in many of these ideological and financial “refugees” … and Ecuador was here and there, atop all the “big lists” by that time, as being an ideal downsizing/retirement destination.

Our real-estate consultancy was perfectly placed to receive these folks, and we dealt with many happy clients over the ensuing years … helping them navigate their way through the very murky waters which had often otherwise characterised the Ecuadorian (or Latin-American generally) real-estate scene. Life was good, and while certainly not in any danger of becoming a millionaire anytime soon, I was very happy, both in my new home, and that I could make an agreeable enough living whilst genuinely being of service to new arrivals in the region.

As many readers will know, International Living (IL) magazine played an enormous role in the numbers of folks who came streaming into Ecuador since 2008. IL ranked Ecuador as Number One in the world for many years. They wrote hugely enticing sales-pitches and hosted endless seminars about the quality of life, the prices, the beauty, and the value for money of relocating to “Paradise.” Build it and they will come … and in this case they certainly did.

As a realtor dealing mostly with foreign arrivals, I was always hugely conflicted about International Living. Yes, they were responsible for some clients we would otherwise not have received … but … because they so profoundly misrepresented Ecuador in their articles, I was often more of a “re-educator” about the realities of Ecuador, than I was a realtor. And when you burst people’s dream-bubbles, the results generally aren’t too pretty. So, because of my uncensored approach when dealing with clients, I bore the brunt of some genuine unhappiness … which was in truth, directly attributable to the dashed false expectations which IL had certainly been responsible for generating.

Anyway, I digress. The point I was keen to make is that for the most part, Ecuador was seeming to have been a very good decision, not just for me, but for many. The vast majority of those who came here were happy here (once they adjusted to the cultural and lifestyle differences – and learned some Spanish to get by). Certainly, compared to the mess most of the rest of the world was in, Ecuador was by any measure, apparently having it pretty good. 🙂

Keeping in mind that Ecuador had (up until Correa) previously suffered seven presidents in only ten years, it seemed he was really doing a stand-up job of running the country in a relatively “stable” and acceptable manner. But there was, for many, always an undercurrent of “too good to be true.” For example, he adapted the Constitution early on, to give rights to Nature, but simultaneously expanded his executive powers in other areas to an extent which made many doubters uncomfortable. People wanted to believe … but sadly, over time, it was the doubters who would ultimately be proven correct.

As near as I can pinpoint it, the “Correista worm” really started turning sometime in early 2013.

Humanity had successfully traversed “end-times-prophecies” by waking up unscathed on 22nd December 2012. Nobody I knew seemed to have ascended, and people were apparently resigned to getting on with their lives once again. Those who had bought properties and battened down the hatches in Ecuador specifically to ride out the end of the world and global collapse … zipped their previously enthusiastic end-times rhetoric, muttered darkly about “stupid Mayans,” sized up their next destinations, and put their properties back on the market for us to sell. It still amazes me that these things really happened … at times it often felt like living in a movie!

2012-Awakening

Anyway, back to the turning worm. There are many things which have contributed to the current sorry state Ecuador is in, but for the purposes of this article I will simply be relating my personal experiences and observations, as well as information gleaned from the many discussions I’ve had with local Ecuadorians and long-term-expats over time. I will also be highlighting a variety of these issues by bullet-point, with links to supporting information/articles/etc … for anyone who is interested in clicking through to an array of information they may have previously been unaware of.

At this point I’d like to make clear it is somewhat ironic (and not just a little frustrating!) that the majority of expats here in Ecuador STILL remain unaware of how bad things are (let alone how bad they may get!).

Ostrich-HeadInSand

There are three main reasons for this.

  1. They live in a “gringo” language and culture bubble, insulated by wealth (and by design) … which sees them having practically no meaningful interaction with their host population. These kinds of expats typically have a moan about things like a bottle of their preferred wine having increased by $5 in price at Supermaxi. That’s about the extent of their awareness that serious unseen change is afoot … and invariably, they just “suck it up” without much further interest (or investigation). Why should they care? Still cheap, right!?
  2. Most assuredly, cognitive dissonance is also playing a serious part … people who have poured themselves, their golden-years-dreams, and hundreds of thousands of dollars (or over a million in many cases!) … often against the advice of family and friends … absolutely do NOT want to face the reality that their investments and properties here are currently worth much less than they paid into them … and that their Ecuadorian “net-worth” will continue to plummet under the re-birthed Alianza-Pais administration. They may not want to admit it, but it is true nonetheless … and sooner or later, that brutal reality will be impossible for them to avoid.
  3. The fact that the vast majority of foreigners here do not work at ground level in Ecuador (and therefore have no clue about what is really going on). Expats here are mostly retired, and existing on private investment income or foreign pensions, or if they are still working at all, are generating their income online, or otherwise, remotely. By my (purely anecdotal) reckoning, probably less than 5% of expats are legitimately engaged in any sort of “on the ground” business actually in Ecuador. Needless to say, if the extent of one’s governmental or municipal interactions are limited to paying water, electricity, and land-tax occasionally, one’s exposure to the cut and thrust of doing business here … and making a living here … is necessarily very limited.

As I said before, Ecuador once had some vitality and joie de vivre (in my first four or so years here). Since then however, for those paying even a modicum of attention, it has been a steady and terrifyingly noticeable decline into the depressing pit we now inhabit (even moreso since the dodgy election result).

The best way I can describe things here now, is that it’s like waking up each day with an increasingly heavier weight on one’s shoulders. It has been like that for four years already, and the knowledge there will be a continuation of the Alianza-Pais status-quo, is a crushing blow to anyone who understands what is really happening. One simply knows that even the most “ordinary” things are going to continue to be incredibly difficult to accomplish … to the point that, considering the inescapable futility, one is ultimately dissuaded from doing anything at all.

Sisyphus

When this kind of demotivational malaise overtakes an entire country (which is certainly the case now in Ecuador) … the economic and accompanying social death-spiral probably cannot be halted. Certainly, these enormous problems now facing Ecuador cannot and will not be solved by the same “Alianza-Pais consciousness” which created them.

Einstein-Insanity

So, where to start, when there is such an awful lot to get through? Well, while on the subject of doing business, and working on the ground here in Ecuador, we might as well start there.

It is my contention (and the experience of multitudes I’ve spoken to) that since 2012/2013, the Correa government (for reasons best known to itself – and whether by design or stupidity) has systematically and consistently destroyed small to medium enterprises (SMEs) right throughout the country. When a country (any country!) loses its SMEs, the backbone of its domestic economy is gutted.

This means new businesses will not be created, existing businesses will quit or die, people will not be employed, things will not get built/done/made, etc … no money will be made/invested/circulated, no tax-revenue will be generated, business and investor confidence will evaporate, and the above-mentioned “death-spiral” will be entered into … a death-spiral which is very hard to reverse once it takes hold.

EconomicDeathSpiral

The shortsighted and catastrophically incompetent policies of Correismo (particularly the recent counterproductive changes to employment law – which immediately resulted in countless thousands of part-time or full-time Ecuadorian employees being completely laid off), created exactly such an environment (almost as if by design).

Interestingly (and predictably) enough, the government assiduously avoids its own employment regulations (that it expects everyone else to abide by) by only employing most people on six-month contracts, and then unceremoniously firing them. This is one reason the people one deals with in government offices are nearly always absolutely clueless about the processes they are supposed to be “processing,” and often look overjoyed if they can tell you “no hay sistema” (the system is down). Those poor souls have only been there such a short time, know nothing, and KNOW they are going to lose their jobs soon. So why bother learning anything in order to be helpful? They don’t care … they really don’t care. After all, they’ll be churned any day, and replaced with someone else who knows even less than they do!

Clueless

Me, my friends, and associates have watched restaurants and many other local Ecuadorian businesses, enter that death spiral after being forced to fire many of their original and loved employees (thereafter perhaps informally “hiring” a couple of family members whom they trust enough not to sue them under the onerous employment laws).

Honestly, I have travelled all over the world, but I have never been as personally affected by (nor seen so many ordinary people punished by) … the sheer stupidity of government policy that we are currently witnessing here. I am telling you … it is a very sad thing to watch an entire domestic economy being suffocated by the punitive and idiotic strokes of clueless and venal bureaucrats’ pens. In Correa’s Ecuador, it is apparently preferable to crush the will and hope of a people with mindless bureaucracy and outrageous fines, fees and taxes … than to just kill them outright. 😦

PenMightierThanSword

Keep all this in mind, and then know that Alianza-Pais proceeded to double-down on this failing doctrine, expanded their already bloated “government” even further, and then relentlessly attempted to extract hard cash by any and all means from the very economy it was busy destroying. This, of course, is akin to getting blood from a stone one has already sucked dry.

The real tragedy in thinking here … is that if a government wants to make money from its people … it has to promote an economic environment which allows its people to make money. This elementary principle seems to have completely escaped the Correa administration’s attention.

In fact, my favourite analogy for the current situation, is that like the most insatiable vampire, the Correa government became a desperately engorged parasite, getting bigger and bigger (but never getting enough) … sucking its host (the Ecuadorian people) dry, thereby eventually killing it.

Obviously, any intelligent (and truly symbiotic) parasite realises that if its host dies, then it also dies, making the killing of the host counter-productive. But penny-wise and pound-foolish thinking seems to be what Alianza-Pais does best … and an awful lot of money can be misappropriated en-route to the death of a nation. That scenario, sadly, is what we are seeing play out now in Ecuador (one need only remove the word “global” in the below subtitle for it to be Ecuador-specific).KillingTheHostHow did this happen?

Well, let’s start with an easily understandable and relevant measure, and see what happened to it since Correa took power almost a decade ago.

“Ease of Starting a Business.”

The DoingBusiness.org website measures all sorts of key indicators across economies and regions. “Ease of Starting a Business” is one of them. Out of all measurable countries (of which there are about 185) Ecuador’s ranking currently stands at 166. This means there are only a handful of countries on the entire planet, where it is considered more difficult to start a business, than it currently is in Ecuador. Indeed, there are some countries which are actually permanent war-zones where it is still easier to start a business than it is in Ecuador! Unfortunately, for some reason, the historical data for the ranking back in 2007/2008 seems to have disappeared, but from memory it was about 120 (not great – but not totally catastrophic). The bottom line? Under the Correa government, this crucial ranking slipped every single year, before reaching its current inglorious level of 166 out of 185 measurable countries.

If anyone can explain to me how making it almost impossible to start a business for one’s countryfolk … in any way constitutes a “citizens’ revolution,” I’d love to hear it. For someone who is apparently a US-trained economist, one would think incentivising and stimulating the local Ecuadorian economy would be a top priority. This has not been the case however … on the contrary, Correa’s government has demonstrably trashed the environment for SMEs to even survive, let alone flourish. 😦

Anyway, moving on. I’ll now document, in no particular order, the kind of things which have been happening since 2012/2013, which especially when taken together, should help anyone join the collective dots they need … in order to form an opinion of exactly what has happened to Ecuador, under Correa’s Alianza Pais.

Ecuador’s problems are often said to have started with the oil-price-plunge in 2014. Prices which had previously sometimes been north of $120/barrel plunged in a very short time, to as little as $30/barrel or less. Production costs are about $40/barrel, so to say this was catastrophic for Ecuador was an understatement. It transpired that despite enjoying “boom-years” of high oil prices, Correa’s Ecuador was taken completely off-guard by the correctionthey had simply taken high prices for granted … and for years, swaggered around, spending like a drunken sailor

One would think the “master economist,” Correa, would have wisely been salting away a proportion of those revenues for some kind of “rainy-day-fund” (earthquake, anyone?) while the oil-prices were high. But no … apparently not! Mismanagement? Incompetence? Negligence? One of them applies … pick whichever you like! 😦

The only “Plan B” Correa had, when this (entirely foreseeable!) “disaster” struck … was to go running back to the Chinese with cap in hand. The amount of Chinese debt which Ecuador holds … is now properly scary (nearing $10 Billion, of approximately $45 Billion of total national debt) … and will help to cripple the country for at least a generation to come. Although with the shenanigans of Alianza-Pais extending to fiddling the debt figures also, who knows? Must be the post-truth era, I guess. We have been here before in Latin-America … it does not end well.

Debt-Ball&Chain

Fortunately this should not trouble Correa himself, as he will soon be living the high-life in Belgium or France, swanning around the European lecture circuit, talking about the (fake) “economic miracle” he bestowed upon his beloved Ecuador … whilst no doubt blaming Moreno and other useful idiots who inherited the debt-bag, for the long-term failings and social chaos which will surely manifest as a result of his mind-bogglingly bad economic mismanagement.

ArrogantCorrea
“Soy increible – soy el mejor presidente del mundo – no me hables!”

So what went wrong for Ecuador? What the hell happened?

In a macro-context, and depending on which media one favours (especially for foreign observers), it would seem there are three major things which created the perfect storm which is in the process of sinking the good ship Ecuador.

  1. The oil-price-plunge … (resulting in massive Chinese debt-loading).
  2. The ever-appreciating US dollar (which is Ecuador’s currency).
  3. The crippling and demoralising effect of the April 2016 earthquake.

However, that is not the real story at all. There is a fourth issue, rarely publicised (certainly not in Ecuador), and to my mind, it eclipses all the others, because it is the root cause of Ecuador speeding towards the iceberg, and being unable to slow down … or change course.

The size, nature, corruption, venality and
incompetence of the Alianza-Pais government.

As I have said previously, a variety of pre-2014-problems started eating away at the fragile fabric of Ecuador’s economy. And all of them were related to the above … catastrophic government policy (the primary subject of this article).

Let’s go back to the real-estate market for a moment, which is something I was intimately involved with at ground-level, for many years. Sometime in 2013, the government started tinkering with real-estate law, and in quick succession, did two things which put the brakes completely on what was at that time, still a relatively healthy and functioning market.

Let me re-emphasise that now, barely four years later, Ecuadorian real-estate has never been in a worse place (in the last decade anyway). Four things have contributed to this over the last few years, and another two recent governmental actions put the final nails in the real-estate coffin.

1. Bureaucracy – Difficulty to Subdivide – Bureaucratically, it became almost impossible to subdivide larger properties into smaller pieces … hence a lack of marketable parcels/properties coming onto market.
2. Changing Residency Law – Making it much more difficult (or very unlikely) for a foreigner to be able to get residency by buying property (Investor’s Visa) … by changing not the threshold value itself ($26K for a couple), but the source from which that value was taken. The “Impuesto Predial” (municipal-rated land-tax value) was always a much lower value (sometimes by a factor of ten or more) than the “Escritura” value. Taking the threshold value from the land-tax document (rather than the actual “market price” of the Escritura) ensured anyone buying “land only” would almost certainly NOT be able to use that land for their residency, and would therefore have to come up with additional funds (or proof via another method), to get their residency. This had the effect of immediately (and permanently) chilling the market for any “land-only” properties, and inflating the market somewhat for any properties with existing infrastructure (houses, buildings, etc).
3. Introduction of (Rural) Building Permits – The introduction of construction permits being required for properties zoned rural … was another game-changer … but only for the worse. Simply another shameless money-grab, more power and bribing opportunities for clueless greedy bureaucrats, a poorly defined, time-consuming and costly process, all collectively providing a massive disincentive  for anyone to buy land and build the home they wanted to build. Obviously this was complemented by an additional corresponding dip in the real-estate market for land-only properties (as per point 2 above). Viva la revolucion!
4. Evaporating Investor Confidence – Massive decrease in investor confidence generally – because of the direction the Correa government had pursued. This resulted in people leaving the country, and many others not wanting to come. This is (only partly) why it is such a “buyer’s market” right now. Ironically enough, current prices are only being held up even to the low extent they are … because there are less properties able to come onto the market (as per point 1) … and because prices are going so low that people just can’t bring themselves to put their property on the market at all!

RealEstateMarket

Obviously at this point, the bureaucrats were wondering what else they could possibly do to kill the real-estate market completely DEAD … so they finally passed the capital-gains-tax (PlusValia) … which, along with SigTierras meddling (see below), was effectively the final stake through the heart for the real-estate market in Ecuador (for the foreseeable future).

On the upside, International Living’s ludicrous articles on finding “bargains in Ecuador” will no longer be as full of crap as usual. Good for people wanting to take a chance on Ecuador’s future … not so good for those who’ve seen their existing real-estate plummet in value, and are now perhaps trying to get out, before Ecuador potentially turns into Venezuela.

To close out the real-estate subject, the federal government agency SigTierras, a few years back, began a process of matching up their own recently undertaken pinpoint-GPS surveys of the whole country and all properties therein … against actual (and in many cases ancient) Escrituras (Deeds). If the SigTierras survey found an area of land GREATER than that which was listed on its Escritura, you are … wait for this!!! … required to BUY YOUR OWN LAND at the prevailing municipal-rated-value per m2 … from the government!  We know of one person who was hit with a $32K bill for a discrepancy of about an acre (4,000m2). This guy wasn’t just anybody. He was wealthy, influential, connected, and angry. He challenged it … and he lost. Which means nobody else, least of all foreigners … would stand a chance of challenging ANYTHING this administration decides to inflict upon them. There is effectively no rule of law. All bases are covered by the Alianza-Pais executive (more about that later on).

Pwned


Pwn is a leetspeak slang term derived from the verb own, as meaning to appropriate or to conquer to gain ownership. The term implies domination or humiliation of a rival, used primarily in Internet culture to taunt an opponent who has just been soundly defeated (e.g., “You just got pwned!”).

 

This is just one of many obvious examples of a desperately cash-hungry government devising new ways of robbing its people … to their faces. Just imagine having to suddenly pay AGAIN, for imaginary new land, (magicked out of bureaucratic thin air) that you (or your ancestors) already bought, perhaps generations ago (when property-line descriptions were more akin to “from the big tree to the bend in the creek”)! Doesn’t matter, people! It’s not about fairness … it is ONLY about the money!

So, a municipal lien for the “assessed amount” is then placed against the property in each such case, and until it is paid, the land-owner cannot legally sell his own land. Checkmate. 😦

Needless to say, this was the final brutal nail in the coffin for what was, only a few short years ago, a healthy, free and relatively fair Ecuadorian real-estate market. RIP Ecuador real-estate.

RIP-Gravestone

Okay … moving on.

Destruction of any (even faint concept!) of the “Separation of Powers.”

The other thing which always happens under such dictatorial “administrations” as Correa’s … is the complete takeover of the legislative and judicial branches of power by the executive. Once that’s accomplished (and Correa nailed that down early on), the media (and anyone else) can also be shut down and/or intimidated into toeing the party-line. This is when so-called “democracy” … becomes dictatorship.

SeparationOfPowersThis has been evident for a long time now in Ecuador, for anyone paying attention … and is only getting worse. Anybody who writes or speaks out in any significant way … is intimidated and ultimately silenced. Ask Crudo Ecuador, Ecotel TV (Loja), the Pacha Mama environmental foundation, Manuela Picq, or Fernando Villavicencio their thoughts on this phenomenon. There are countless other examples of heinous abuses, for anyone who wants to go looking.

Crudo Ecuador – anti-Correa online satirist gets death-threats and shut down for good.
Ecotel Loja – Loja TV station raided by paramilitary “cops” in the wee hours of the morning, and shut down (equipment stolen).
Pacha Mama Foundation – leading environmental agency shut down by force (equipment and records stolen – presumably to identify and further harass the membership).
Manuela Picq – activist was illegally beaten, jailed and expelled from Ecuador.
Fernando Villavicencio – journalist needed to seek political asylum for his own safety, in Peru.
Fundamedios – the Free-Speech-Watchdog, completely shut down by Correa.

For a variety of “state-beneficial” reasons, the “public service” contingent continues to bloat enormously, and all “employees” don’t remain employees for long unless they are (or become) Correa supporters … which of course, they all do. These wage-slaves provide a ready pool of folks who are REQUIRED to down tools (not that they were doing/achieving much anyway!) at a moment’s notice, to attend Correa functions, rallies, etc. So … they are either being paid to take time off work to provide enthusiasm for political events … or the non-“employees” are ACTUALLY paid to attend events. This is so accepted as part of “the norm” in Ecuador, it is not even commented on as corrupt practice anymore … it is simply “expected.” Bigger fish to fry, and all that. This is what happens when endemic corruption becomes normalised as “state-sanctioned behaviour.”

I dare anyone to watch this hilarious video where Correa supporters very publicly admit to being paid to attend his speaking event (much to Correa’s disbelief and mortification). It seems he over-rated their intelligence to help him out by “staying Mum.” 🙂

What else is there to do with that video, except laugh uproariously at the farce?

Anyway, moving on. Hopefully by now, my dear reader, you are beginning to understand the sheer ludicrousness of what is being perpetrated on the citizenry of Ecuador right now.

Continuing with the theme of the government’s desperation for cash, for just a moment, the multitudes of newly minted cops/officials (of which there are several species) … do very little to counter serious crime of any sort, but are told to go out and generate income for the State. Parking tickets, speeding tickets, any kind of “infringement” they can dream up, they will book you for. Ka-ching … into the gaping black money-hole of Alianza-Pais it goes.

Correa’s government has “invested” nationwide in the kind of revenue-raising radar speed traps which have infested the so-called “first-world” to such a ubiquitous extent now, that they are hardly even talked about in that way anymore. The brainwashing in the nanny-states of the so-called “developed west” is complete it seems. 😦

Vast sums of Ecuadorian money which could have been better invested into the local economy, helping earthquake recovery, or doing a million other useful and productive societal things … is instead diverted to these revenue-generating causes … whereby the state’s job is to drain its citizens of the little cash they’ve still managed to retain in the face of this grand onslaught.

The levels of these fines (given the basic monthly wage of around $400) … is simply outrageous. Speeding fines from “photo-multas” in excess of $300 are commonplace. These outrages combine nicely with things like the “impuesto verde” (environment tax on cars) … a blatant rort, which has additionally been responsible for the decimation of the market for  vehicles with (often very needed) larger engines (in this mountainous terrain) … and is the main reason many vehicles now cost up to $500 or more (per year!) to legally keep on the road. Relate these costs to the basic monthly wage of $400, and one begins to realise the extent and insanity of the cash-grab.

CashGrab

Add to this the doubling or tripling or more … of all taxes, fees, charges … of any description … over the last few years, and one begins to see both the nature and scale of the problem.

For example, when introduced (which was an incredibly stupid idea anyway), the “exit tax” on funds transferred out of the country (impuesto de salida de divisas), was 0.5% (that is, half a percent). It is now 5% … a 1,000% increase! This blatant theft (there is no other word for it) of people’s hard-earned money … discourages money being brought into Ecuador. It discourages investment or confidence in Ecuador. It ensures people will only ever drip-feed their funds into Ecuador as needed. It is yet another classic example of penny-wise pound-foolish thinking … the Alianza-Pais specialty! And, as if all that wasn’t insane enough, you now cannot leave the country with more then $1,100 of your own money in cash. Anything above that will have the 5% confiscated from it. No. I am not joking. (On the bright side however, at this rate it is unlikely anyone will have more than $1,100 left by the time they decide to leave Ecuador.)  😉

I want to cover just one or two more things, and then we’re done … I promise! 🙂

When Correa came to power, for years he campaigned on a platform of helping the “little people,” the campesinos, the everyday workers of Ecuador. They responded jubilantly, rewarded him richly, and it has taken them quite a while to realise they’ve been conned … that the worm has turned on them … and turned significantly.

A great example of this is an innocuous sounding piece of legislation called the “Registro Sanitario (RS)” (Sanitary Registration). This little charmer was rolled out Ecuador-wide a few years ago, and basically states that nobody can sell any consumable item, without first having received the RS. One truly has to have lived in Ecuador for a while, to realise the ramifications of rolling out something as stupid as this, the way they did.

Tacitus-CorruptState

The bureaucracy, time, and cost involved in getting the “registro sanitario” certification for an edible product … is, quite simply, INSANE (just remember what I said previously about the the incompetence and venality of the bureaucracy) … and has consequently turned ordinary people into criminals. A case in point would be simple farmers, often illiterate, who for generations have taken their milk and cheese to market. They have not the time, skill, desire or money (for lawyers and fees) to navigate the bureaucratic processes necessary to obtain the stupid piece of paper they suddenly “need” … but if they continue to sell without it … they are now outlaws!

Into the bargain, the Alianza-Pais government now requires that EVERY cow or livestock be registered (more time) with a tag (more cost), and that those animals require (costly, regular, and multiple) vaccines. This means the produce is now no longer organic (or potentially safe) in any sense of the word. Needless to say, compliance is mandatory, and I’m sure the fines for being an outlaw are significant. 😦

I am not even going to touch on Correa’s complicity with Monsanto, his push for GMOs, terminator seeds, and the like. People can figure out pretty easily, the personal motivation driving those agendas! Ka-ching!

In closing, it is apparently not enough the degree to which these vampires are coming after you IN LIFE … they now also want to claw back as much of your wealth as they can once you’re dead. Enter the Ley de Herencia (Inheritance Tax). This tax has not legally made it through yet, and it remains to be seen whether Correa’s hand-picked successor Moreno will push for it as vigorously as Correa has. It has been forcibly shelved once or twice already (along with the aforementioned CGT), but the CGT is now law, and ultimately, I don’t expect the outcome to be any different with the Inheritance Tax.

It is difficult for me to properly communicate the insanity of what is happening here, but I have done the best I can with this blogpost.  The bottom line is that there is NO “Citizens’ Revolution.” That whole concept is a slick PR farce, much like the con-game Correa pulled when he was selling off Yasuni to the Chinese, while still asking the world for donations to a fund which would keep that oil in the ground.

All this of course, after having previously “enshrined the rights of nature in the Constitution” – remember! Tell that to the indigenous peoples fighting the Chinese and others on their ancestral lands. This kind of modus-operandi is Correa’s (and any slick huckster’s) trademark … looky over here … while something quite the opposite is going on over there. 😦

All that now exists … is the feeding of the giant insatiable Alianza-Pais vampire-squid, an enormous black-hole Death-Star, sucking citizens’ cash towards it with relentless force … which then consolidates that power and money to kill Ecuador by way of the death of a thousand cuts.

DeathStarCashGrab

And now, with the “installation” of Moreno … the nightmare will most assuredly continue. All the long-embedded Alianza-Pais parasites chupando en la teta (sucking on the teat) now get to stay exactly where they are … and many more will soon join them. That’s how they roll. This is how a country dies. 😦

FullRetard

It’s hard to say at this stage whether Ecuador will indeed go “full retard” and join Venezuela in the madhouse, but the signs are not good. Next to Venezuela, Ecuador has recently been the worst performing economy in the region … and every indicator, in terms of government policy to date, and that which is apparently forthcoming, now Moreno has the reins … does not augur well.

Having travelled to Peru fairly often, we know that significant numbers of savvy Ecuadorians have moved large amounts of capital to Peru, have set up “Plan B” style businesses in Peru, and are ready to skip across the border and activate those plans the first hint they get of things getting “sticky” here in Ecuador. These preparations are not recent … they have been ongoing for as long as three years in some cases.

Additionally, I know several people who work in cooperatives and financial institutions and their customers have taken immediate action. Since Moreno was “elected,” capital has been hemorrhaging out of Ecuador across borders … Ecuadorians are even sucking up the 5% exit tax, and just getting their money OUT. Most of the Ecuadorian capital is going to Peru (this, despite the perilous situation which Peru is currently suffering because of once in a lifetime flooding). These people are realists … they know what is going on … they have seen it all before.

As I said before, the purpose of this article is to inform, and educate, on the basis of my nearly decade on the ground here, watching the Correa government in action. Some of you may be wondering why I’ve decided to speak out … why write this blogpost, when the risks of outright persecution are as they are? Well, the answer is that I’ve come to the sad conclusion I don’t have much left to lose here in Ecuador. Anyone who knows me, certainly knows it hasn’t been for lack of trying!

Meanwhile, perhaps this article will help others make some intelligent and beneficial decisions which might save them time, money or pain. Fundamentally, it has never been my nature to censor myself, especially when things urgently need to be said, and truths need to be known. Otherwise, what does one have left? 😦

Everything I’ve experienced here, makes me certain that Ecuador’s by now enormous problems … are extremely unlikely to be solved by the same “Alianza-Pais consciousness” which created them.

Einstein-Consciousness

Ecuador’s people, its military, and its police … need to wake up, and do the honorable (and sensible) thing … reject the cancer and the fraudulent election result, and start again.

Maybe then, Ecuador won’t fall over the edge of the cliff and end up like Venezuela … in what is effectively now, an ongoing civil war.

Maybe an immense amount of suffering, conflict and death could be avoided.

Maybe.

But right now, it doesn’t seem likely.

Good luck everybody.

P.S. Some good news arrived today (27th April 2017), by way of Moreno conceding many of the points made in this article … maybe he will do something better than Correa after all. Time will tell.

3rd May 2017 – Update – more promising news regarding Moreno’s apparent awareness of how dire things are for business and real-estate.

29th May 2017 – Update – more promising news regarding the potential direction of the new government. Things like this need to happen quickly and effectively if Ecuador is to avoid the iceberg of collapse.

30th May 2017 – Organising another 2 BILLION dollars of new debt within your first few days in power is hardly confidence inspiring. 😦 (Article is in Spanish.)

12th June 2017 – Let’s hope the figures and initiatives in this article are real, and that the Ecuadorian government really DOES want to make it easier to export, and for business to be done generally.

2nd July 2017 – Ecuador, under Alianza-Pais – one step forward and half a dozen backwards. 😦

5th July 2017 – “His brief presence in office thus far suggests a willing disposition to address some of these problems, but the real test will come when more difficult decisions need to be made.”

6th July 2017 – Sometimes, it can be tough letting go. For Correa, it seems to be almost impossible. This policy of engagement from Moreno seems promising. We will soon see whether it yields any concrete results or not. Tick-tock …..

12th July 2017 – Let’s just hope Moreno keeps “widening that gulf” with Correa … it is about the only hope that Ecuador has, to bounce back from incalculable damage. And the idea of Correa returning in four years? Well that would be a true nightmare. 😦

13th July 2017 – Cutting costs for Ecuador businesses? Helping the private sector flourish? Better hurry up with that, “working on a plan,” guys & girls! Time’s a wasting! Tick-tock …

20th July 2017 – Is anyone surprised? It will become increasingly apparent just how dire Ecuador’s financial situation is … as time goes by. Correa damned this country to generations of debt, whilst simultaneously crippling its ability to generate income and productivity in order to have a chance of paying it down.

26th July 2017 –  Moreno is starting to wake up to the nature and scale of the massive disasters perpetrated by Correa (they chime precisely with what has been covered herein). But will enough be done, soon enough, to arrest what is now nearly a five year slide into the abyss? After all, these items are just a very small piece of the overall catastrophe … as described by this article.

28th July 2017 – Anyone who’s genuinely following the machinations of the Ecuadorian economy KNOWS things are disturbing, but I still wonder just how bad they really are?

28th July 2017  – Here an Ecuadorian congresswoman lays bare some of the extreme illegality and lack of ethics which permeated everything to do with Correa and Alianza-Pais, both during their rule (and during the so-called “election”).

29th July 2017 – If this is what Moreno is saying publicly, one can only imagine how bad it really is … and how big a migraine he really has. The points I originally made in this article continue to be vindicated in spades.

2nd August 2017 – As discussed in my article at length, the corruption, and anti-democratic issues such as the lack of separation of powers within Correa’s Alianza-Pais government … was simply off the charts. “Moreno needs to continue to root out corruption in the government once the vice president is gone. Checks and balances must be restored so that justice operates independently from the will of other branches of government.”

2nd August 2017 – Correa continues lying from the other side of the world, whilst the corruption-ridden VP, Glas, decides that his being investigated for corruption equates to Moreno “abandoning the political principles established by former president Rafael Correa.” Yep … you got that right fella … that’s kind of the point!

3rd August 2017 – Finally! Glas is stripped of responsibilities/powers as VP. Moreno starts taking the fight to the corrupt Correistas. A welcome step in the right direction. 🙂

4th August 2017 – “In testimony presented to Brazilian prosecutors, the Odebrecht official who paid bribes to dozens of Ecuadorian government officials and business contractors, says he transferred $14.1 million to Vice President Jorge Glas.

14th August 2017 – “The closer you get to the truth, the more nervous the guilty ones become.” – Moreno.

16th August 2017 – Moreno is discovering that every rock he turns over has unparalleled filth and corruption underneath it. When will he go after the big dog, Correa, I wonder? And surely (even moreso with this!), it’s just a matter of time before Glas is in prison-stripes?

16th August 2017 – Whilst David Morrell here laments the apparent inevitability of Rafael Correa becoming widely perceived as a tragi-comic and increasingly irrelevant blusterer … I personally can’t think of a more fitting demise for someone who has been so full of themselves, for so long … to the detriment of so so many.

21st August 2017 – Despite the fact Moreno doesn’t seem to appreciate yet, the range and urgency of the things he has to do RIGHT NOW to turn Ecuador’s disastrous economy around (particularly for small-to-medium enterprise), the good news is that meanwhile, he is almost effortlessly making Correa look like the lying venal thin-skinned idiot he most certainly is … and is getting popular while doing it. Anything which makes it increasingly unlikely for Correa to EVER be able to credibly return to Ecuadorian politics … is a very good thing indeed.

29th August 2017 – Things continue to SOUND promising under Moreno … let’s see if the actions eventually match the rhetoric. “We don’t care who they are, if they have violated the law and the public trust, we will find and punish them,” Moreno said.

4th September 2017 – It will be interesting to see whether Moreno can ultimately triumph against the entrenched Correistas within Alianza-Pais, because it is looking more and more like all-out conflict is unavoidable. I very much hope so … the future of Ecuador depends on these corrupt and brainwashed fools being utterly vanquished. Correa must never be able to return to inflict more damage.

16th September 2017 – As the pressure hots up within the AP party (and between Moreno and Correa specifically), events take a turn firmly into “weird and sketchy” territory. “An investigation is underway following the discovery Thursday of a hidden camera and microphone in the office of President Lenin Moreno.”

18th September 2017 – Yet another serious roadblock to success for Ecuador – eliminating or reducing the “exit tax” on funds leaving the country – (previously mentioned in this article), is finally being discussed. Too little, too late I’m afraid … progress is mind-numbingly slow. Sadly, Moreno’s government is still all talk no action. Nothing is really being done as yet. Why am I not surprised? 😦

20th September 2017 – Moreno will win this referendum on reversing a variety of Correa-era policies. Hopefully that will then make serious change possible within the recalcitrant (and still partially Correista) Alianza-Pais party. Get on board, or get off the boat.

23rd September 2017 – I hope Carlos Espinosa is correct. “Despite Correa’s sound and fury, says Espinosa, Moreno is in clear control of Correa’s future as well as Ecuador’s. “Within a matter of months, the voters will end forever Correa’s dream of returning to the presidency,” he says, referring to the public referendum Moreno plans to call. “Besides rejecting the indefinite reelection of the president, they will also undo some of the cornerstones of Correa’s plan for big government.”

29th September 2017 – Good to see Moreno standing firm to ensure the monster, Correa, can hopefully never (ever!) return to power. Enough is enough … if Correa returns, Ecuador is as good as dead. Slowly, it seems, people are starting to wake up to the scale of the plunder wrought during the last decade of destruction. 

Correa-Ratas-Flag

1st October 2017 – Goodbye Glas! With any luck the remaining Alianza-Pais factions will completely fracture and dissolve sometime in the near future. “Within the past week, new information in the Odebrecht corruption scandal forced Glas to admit he had more interaction with his uncle, Ricardo Rivera, than he had previously admitted. Rivera, who owns a satellite television company, is under house arrest in Guayaquil for allegedly taking more than $13 million in bribes.”

2nd October 2017 – Glas ordered to jail (pre-trial detention). I cannot even begin to describe how satisfying it is to see this. The only way it could be better is if the world’s biggest loudmouth, Correa, was in there making number-plates with him. Oh well … small steps! “Baca told Jurado on Monday morning that new evidence tying Glas to millions of dollars in bribe money received by his uncle, Ricardo Rivera, justified the jailing.

5th October 2017 – Progress. Finally! “In a discussion with journalists of Wednesday, President Lenin Moreno agreed that high capital gains taxes are hurting construction starts and real estate sales. “The economy is struggling and repealing the law is one way to help increase investment and revive employment. This was an ill-advised, abusive law that should never have been enacted.””

9th October 2017 – It’s a pity Moreno has had to bother with this referendum (and waste all the time which should have otherwise been spent actioning many important things), but he needs this referendum result as a “big stick” to beat down the diehard Correistas and hopefully kill them off altogether. But at this stage it looks to have been a savvy move, and he now has broad cross-partisan support for it. Correa’s not quite dead and buried yet, but we’re nearly there now. 🙂

10th October 2017 – Almost without question, there is a very deep rabbit-hole to follow in respect of pay-offs to Correistas from the Chinese. Watch this space. “Suspicions about potential CWE bribes were raised when Odebrecht director José Conceição Santos testified in August that Vice President Jorge Glas demanded a personal payment of one percent of the value of all contracts that he was responsible for.”

11th October 2017 – Moreno making all the right moves. “At the cordial two-hour meeting in July, Moreno promised a new era of press freedom and urged his guests to embrace their watchdog function by investigating government corruption. He ended by declaring that the meeting would be “the first of many open dialogues with you.

17th October 2017 – I just can’t stop laughing! “Glas also claimed that he is the victim of “media lynching,” blaming newspapers and television stations of spreading false information. “Because of a conspiracy by the press, I have not been able to defend myself,” he said.” The irony is off the charts! I guess it’s not so much fun when you don’t control the media at the barrel of a gun anymore.

20th October 2017 – Glimmers of hope? “The last three or four years have been terrible for anyone involved in the construction business,” he says. “I’m not just talking about builders like me but also for laborers, craftsmen, construction materials merchants, and real estate sellers. Today, we are seeing the first signs of a recovery.”

23rd October 2017 – Correista filth now levying death-threats against the prosecutor who is relentlessly bringing their dirty deeds to light. Is anyone surprised? 😦 “We are watching every step you take Diana and will eliminate you if you continue to pursue your cases.

24th October 2017 – Moreno continues to undo autocratic damage wrought by Correa. “President Lenin Moreno signed two presidential decrees on Monday, ending requirements imposed by former president Rafael Correa on non-governmental organizations, or NGOs. Moreno said the old policies put unnecessary restrictions on private organizations and violated constitutional rights.”

29th October 2017 – The inevitable happens. Alianza Pais splits into two factions … pro-Correa and pro-Moreno. With any luck the Correistas will be buried very very quickly!  “There is even a name for the AP faction aligned with Moreno, Salgado said. “We are the Assemblistas Monticristi (AM) because we firmly believe in the original intent and purpose of the 2008 constitution that was drafted in Monticristi,” she said. “We believe in a democracy that turns to the people on important questions of governance. We do not believe in a government that usurps power from the people simply for the purpose of building a more powerful government.

2nd November 2017 – I just can’t stop laughing! Correa just doesn’t get it. I wonder if he ever will? Moreno has played this whole thing like some kind of Jedi-master. “An attempt by officers of Alianza País to align the political party with former president Rafael Correa has apparently backfired, solidifying President Lenin Moreno’s support both in and outside the party.” 🙂

6th November 2017 – Absurd … is absolutely correct. Glas’s salary should obviously have been at the very least suspended, the moment he was remanded in custody. “It is absurd that he should be collecting a paycheck,” says Alonso López, director of UP. “Not only is he not working for the people of Ecuador, but the evidence suggests he has also received large payments in bribes.”

14th November 2017 – The trash looks like it is finally getting taken out. The big cheese however, remains overseas. He may be well advised to quit the blustering bravado, stay there, and hope no extradition process is possible. “National Court Judge Miguel Jurado said Tuesday that Vice President Jorge Glas played a central role in Ecuador’s Odebrecht bribery scandal. His comments came in a final hearing in which he officially ordered Glas and 12 others to stand trial for illicit association and receiving bribes.”

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47 thoughts on “Death by Government – one long-term resident’s personal evidential account of how Ecuador is likely following Venezuela over the cliff … and why Correa’s “robolucion” must be outed as the epic failure and corrupt scam it really was.

  1. Thank you so much for the wealth of information Nick Vasay. Very well done. You have saved me from a huge mistake as I have been trying to liquidate everything to obtain my goal of moving (retiring) to Ecuador from the US., based on what I have read in English. All other articles written in English talk about the fairy tale land or are totally vague in discussing the political problem I had no idea of the huge problems you revealed… as any articles discussing them in length are not in English as yours was. I fell in love with the Ecuadorian Andes 4 years ago and I was totally unaware of any of the real estate law changes you revealed as well as many of the political issues. You were a real eye opener! Again… thank you so much. !!

    Liked by 1 person

    1. Thanks Dan,
      I really appreciate your comment.
      It is a thankless task being the bearer of “real news” … you should see some of the clueless comments I’m getting online from the cognitively dissonant “ostrich expats” who (as indicated) still have their heads firmly buried in the sand!
      Cognitive Dissonance … never bet against it!
      Having said that, there is nearly always opportunity in crisis. For anyone who wants to take a longer term bet on Ecuador’s future (and does NOT have to make any kind of living here on the ground) … it is for sure a good time to come down here and pick up a bargain property (especially on the coast, but everywhere really).
      It is going to be a buyer’s market here in Ecuador, for the foreseeable future.
      Best of luck with whatever you do. 🙂

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      1. Nick, thanks so much for your extensive and detailed report on this. Your comment about being able to pick up a bargain property in this current buyer’s market does sound rather intriguing for someone who doesn’t have to earn a living on the ground (e.g. someone retired and living on U.S. Social Security), but I’m wondering if there’s been any increase in criminal activity triggered by the political and economic instability. Getting a gorgeous ocean-front estate for cheap would be a wonderful prize, but any corresponding increase in robberies/burglaries/muggings would certainly reduce or negate that benefit. Have you heard of any increased crime levels in Ecuador recently, and particularly in those beautiful coastal regions?

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      2. Hi John … thanks for your comment.

        I don’t really have enough data to reach any hard conclusions in that regard, however, it stands to reason that if things continue deteriorating in Ecuador (as has been the case in Venezuela), that crime will soar. And expats perceived to be wealthy (wherever they may be) will bear some of the brunt of that sort of uptick. This happened very recently, near Vilcabamba, and I expect to see more of this kind of thing around Ecuador, if economic conditions continue to worsen (as they will, if rapid 180 degree changes are not implemented by Moreno).

        So … it is very much a lottery of potential “swings and roundabouts” for anyone “going long” on Ecuador’s chances at the moment. Best of luck. 🙂

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  2. As a foreign resident of Ecuador and business owner, unfortunately, I have to say this is an accurate, well written article. It’s nice to see someone who sees things closer to how I do tell the truth for a change, well done.

    Liked by 1 person

  3. As someone who was considering a move to Ecuador, I was fortunate enough to meet and get to know Nick. Unfortunately a number of life situations affected my ability to move to Ecuador full time. But all the while, the advice and knowledge Nick shared with me has been invaluable. This article is the last of a masters level education on what’s going on in Ecuador from someone who’s had boots on the ground for the past 10 years. Without Nicks friendship and this article, my knowledge about Ecuador would be a tiny fraction of what I know now. Great stuff Nick.

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    1. Hi Dan … I really appreciate the kind words, and am really happy that you found my assistance invaluable. I wish you the best of luck in all your future endeavours, and hope you can pop back for a visit one day. Cheers for now, and fingers crossed that things turn around here! 🙂

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  4. Nick has done a great job at reporting what has unfortunately come to be the state of affairs in Ecuador. It WAS a great place to be a few years ago, but now things have taken a drastic turn for the worse. I too had lived in Ecuador for 12 years, but recently decided the issues at hand had clouded the waters and Paradise lost a lot of it’s luster. It’s a shame too, Ecuador has so much to offer, but the government has seen to it that YOU will not have a chance to enjoy what we did when we first got there in 2005. I won’t rehash Nick’s excellent information…but know that he hit it on the head and if you are thinking of Ecuador…you might reconsider or make sure you come and do a THOROUGH “test drive” before you buy or put down roots.

    Liked by 1 person

    1. Great to hear from you Mike … good to get confirmations like this from other folks who have done the hard yards on the ground here and seen the AP worm turn!
      All the very best of luck to you in your new location. 🙂

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  5. This article has shaken me to realize no where is an escape from any government. They are all run by corporate interest and regulations. It’s very unfortunate as we have contemplated many times whether to move to Ecuador. Seems here in the west we live ignorance as long as we can watch TV and eat McDonald’s blind to the fact that we are resting our heavy boots on the backs of the ones who suffer. Inevitably, the worse it becomes in South America and other places around the globe ,the knock is only getting louder at the ignorant westerners door. We just turn up the Kardashians and other mindless distractions. It is very discouraging that most people dwell on the past wrongs but fail to correct the current corruption that is happening at this present time. The government’s, for the most part unite and work together in carrying out thier agenda, we as a people need to do the same to protect the earth. I still am trying to figure that out. For now I will do my best in supporting ethical companies. I’m going to share this post with a few of my friends from Ecuador.

    Liked by 1 person

    1. Hi Shyama – thanks for your thoughtful comment.
      Yes, it seems there is pretty much nowhere left to run these days. 😦
      The lunatics have taken over the asylum worldwide, and it is bedlam almost anywhere one looks on the planet.
      It is getting harder to find peace and quiet and minimal interference from so-called “authority structures.”
      Thanks for your thoughts, and keep fighting the good fight.
      Cheers for now, and best wishes.

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  6. Good article. Too many sobering truths. Anyone who is considering moving here should really consider these points.

    If you keep writing in English, you may avoid getting harrassed by the “powers that be.” If your articles get translated into Spanish, you had better have your bags packed for when Ecuador kicks you out. I guess that’s a sign of the times…

    There are a lot of expat destinations in the world and Ecuador needs to make some changes if it wants foreigners to keep bringing money into the country.

    My only criticism is that I don’t like your use of the term “retard.” My daughter has a syndrome and I have to restrain myself from punching people who use that (and other) mean words. A creative mind like yours can express itself without put-downs.

    Liked by 1 person

    1. I appreciate your comment, Anonymous.
      I meant no offence with the term – I simply appropriated a meme from a famous movie which popularised that particular expression.
      But I take your point, and will certainly be more cognisant of that kind of thing in future.
      Thanks again for taking the time to comment here. 🙂

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  7. With nearly 2 decades here your Take Nick has a high level of discernment and passion and logic rolled into one , It is obvious with Viteri and Moncayos voting power of 30% and supporters who pledged their vote to Lassos we had a winner of 53 up to 60% but thats a done deal on whom counts the revotes now , the grandchild of Blues is Rock , the god father being the same anecdote for the socialist leaders who are just the capitalists in social foxes clothing for their own agendas as they suck off the financial tits of its people and providers of capitalism , DO as I say not as I DO! and youll be fine sheeple, accept the status quo and question nothing! 10 years was enough 14 could be the tipping point , time will tell indeed now what the Govt within their justified taxes and we know best of what you need will be!

    Liked by 1 person

    1. Thanks David … anyone who is in Ecuador, and really followed the election … knows what happened (as you described).
      All we can hope is for the current trajectory to somehow change.

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  8. Thanks for taking the time to write about this Nick. I appreciate your attentiveness to details and your willingness to explain things as you see them.

    I lived in Thailand for a time leading up the Coup d’etat of former Prime Minister Taksin. Granted it’s a very different culture with very different values – but there is one thing that I find to be an interesting parallel. Taksin’s voter base was primarily the lower end of the economic spectrum who were delighted by the essentially free health care they were offered under his administration.

    My experience here in Ecuador is somewhat similar insofar as that many of the less affluent and more self sufficient Ecuadorians I know are quite enchanted with cheap healthcare and, in turn, pro Moreno. I love affordable health care, so I can see where their supportive attitudes are coming from. The point I am trying to make is this, healthcare seems to be one of the best “bones” a politician can throw to his subjects to appease them and keep them distracted from other elements of good governance. Most of Ecuadorians I know who are interested in commerce and economic development (as they’ve seen with neighbors to the north and south) are pro-Lasso. In doing my best to look at the demographic objectively, I’d have to say that these people tend to be on the more affluent end of the spectrum.

    While I do believe in universal access to basic health care, is it not logical to question a government’s intent with regards to why they offer it? Especially if it is known around the world as an incredible societal pacifier? Does the rest of the administration’s action demonstrate consistency with regard to their interest in the welfare of it’s citizens? I can’t claim to know much about this country or it’s people. I’m an outsider. A curious one, but an outsider nonetheless. That said, I do my best to follow cases concerning indigenous rights here in Ecuador. An unfortunate similarity I see with my home country (USA) is the government’s prioritization of profits (in this case natural resource extraction) over people (in this case mainly indigenous).

    Additionally, one of the things that I found most frightening about this latest election was that while there were consistent riots in the streets of Quito and Guayaquil for a week, with heaps of arrests and curfews being enforced – I was shocked to find that no matter how hard I looked in “official” news sources (MSM), I couldn’t find anything! The only coverage I was getting on the events unfolding were via Facebook and social media channels. What sort of country has censorship at that level? What are they so afraid of that they enforce censorship at that level? How is it that the press is unwilling to publish real news that is transpiring in their country?

    These questions are fairly disturbing to me. How am I supposed to trust ANY of the news sources here when I’ve witnessed first hand their willingness to entirely forego publishing relevant and critical news that potentially has the power to undermine the current administration’s grip on the nation? What does that leave me with when it comes to getting the “real” or at least a balanced story? Big thanks to Nick for doing research and writing about it. It’s my job as human being to question that which you write and to compare it to my own experiences and conversations with locals to see how consistent the messaging is. That said, I am grateful for the time you spend writing as it gives me good fodder in my own search of truth and reality while living here in Ecuador.

    Liked by 1 person

    1. Your points are well made Jay.

      The censorship and overall control and persecution of all serious anti-Correa sentiment here in Ecuador, particularly over the last 4 or 5 years … should be of great concern to any thinking observer. As you correctly point out, if it were’t for social media, it would have been more or less akin to living in the darkness of Plato’s Cave.

      That is a scary thought, and something that most external observers from “developed” countries have trouble perceiving as any kind of “reality.” The irony of course being, that their own realities are similarly manipulated, except in even more sophisticated fashion.

      The information wars are certainly the hardest fought, most eternal, and possibly the most important of all the wars being fought around the planet at the moment. I often wonder how it will all end. 😦

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  9. It sounds like all this supposed “incompetence” was done by design to destroy the country and turn it into a socialist country like Venezuela. Could these various leaders, starting with Correa, have been Chinese agents? China seems to have benefited a lot. This all looks too well planned to have just happened. This is also a textbook case of how a democracy is turned into a dictatorship.

    Liked by 1 person

    1. You are correct re it being a textbook case of democracy transforming into dictatorship. As to your other notion, I don’t really care to speculate. The article as it is, stands on its own because I have stayed fairly firmly on the path of historical truth … and steered clear of speculation. But, having said that, stranger things have surely happened. The next 2 or 3 years in Ecuador are going to prove very interesting indeed, especially in respect of Chinese “influence.”

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  10. As someone who has considered moving to Ecuador, I’m very glad I ran across your article. It sounds very similar to what has happened in the States under the Bushes and Obama. Now that we have President Trump, things are starting to turn around, even though the mainstream news and the left still don’t report any of the good that Trump is doing. He’s already done more FOR the US in 100 days than the last 4 presidents combined, and that’s why the globalists are against him. I do think there is hope for other countries, too. We must all actively pray that Good wins in this world-wide battle between Good and evil. Prayers are so powerful. I pray that all the Good in South America are blessed and protected always. Bless you all.

    Liked by 1 person

    1. Thanks for the kind words Viv … yes, strange times indeed we are living through!
      And I have a feeling they are only going to get stranger!
      Best of luck also to you. 🙂

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  11. Thanks so much for the thoughtful and painfully honest post. The “nowhere to run from tyranny” comment is our collective worst nightmare. It is apparent to the intellectually honest that all this downward trajectory is indeed made to order. And it is equally apparent that regardless of talking points, politicians continue the march downward on the issues that matter while keeping the masses entertained with talking points on things that ultimately don’t have that much impact.

    I spent some time and money checking out Ecuador about a year ago and looked mainly in the imbabura region near ibarra. Beautiful place but outside of expat enclaves like cotacachi you could feel the simmering anger / resentment and I suspect that will turn on scapegoats like expats sooner than later.

    I hope and pray that you are rewarded and sheltered for the good will you have shown your fellow travelers.

    Liked by 1 person

    1. Thanks for the comment Jamie.
      Well, I sure hope it doesn’t come to that, but if and when things start to get significantly worse here, anything is possible I guess.
      Needless to say I (and many others now I suspect!) will be keeping a close eye on things.
      Best wishes to you.

      Like

  12. Hey there, I just finished reading your post/article on Ecuador and your take on Ecuador and the Alianza Pais. My husband is Ecuadorian and he has been saying the same thing for years. We really thought – and hoped – that Lasso would win, or maybe I should say they would not rig the system – but alas this was not the case. We bought property in 2015 outside of Puerto Lopez in Salango – about 4000 sq meters – and began to build a retreat center there. Over the course of time we have experienced what you mention. Also my husband’s family owns ancestral land in Puerto Quito and they have been fighting the government over this for years. Anyway, your article depressed me (don’t be offended) AND I appreciated that for once someone wrote honestly about what is going on in Ecuador. Now to figure out what we want to do with a half built retreat center….If you’re ever on the coast come visit. I hope we will flourish there but… http://www.oasisinecuador.com Best wishes, Alicia

    Like

    1. Hi Alicia,
      Fabulous to have people as plugged-in as you and your husband echo the sentiments of the article. That means a great deal to me. I feel your pain and your plight out there regarding your project. Just crazy how a government which should be doing EVERYTHING IT CAN to be promoting small to medium business (and TOURISM) can behave in such a way as to disillusion creatives, entrepreneurs and hard workers such as yourselves. It simply beggars belief. Next time I’m headed out that way I will be in touch for sure! Thanks again, and best wishes. 🙂

      Like

  13. Nice piece Mr Vasey. Whilst I agree with most of what you have written, I am still planning to live there full time regardless. Ecuador may well be on a very serious slide, however, the rest of the world (well in my case Europe) is in the dustbin. I’ll take my chances

    Like

  14. I could not agree more, as an ex pat living in Ecuador but having relatives that live here form the 1970 we know we are just sitting on a time bomb, thank you Nick fot putting it out there so the ex path that are in the dark can understand what the situation is!!!

    Like

    1. Thanks Franco … appreciate your comment.
      I wish I could be more upbeat, but unfortunately that’s just not possible at the moment.
      This is one of those rare occasions when I would really love to be proven wrong. 😉

      Like

  15. You article really came at a good time. I do a series of videos, and as such, it makes me a target for trolls. I have been saying all of those things you mention in the videos (piece by piece) and in social media for quite some time now. I have tracked the loans. I saw for myself the dam project with all Chinese workers. My local friends were all for Lasso and are very afraid of the future. Most of my local friends have lost/cannot find work. All the “free” education is nice, but having jobs is much better otherwise it is yet more wasted taxes. I am very close to heading over to Colombia. Ive seen this slide and I am about to get off. I really like it here, but the intrusion into my life is becoming far to great. I never came here for the free “stuff” and pay my own way on everything. The only hope Ecuador has now is that Moreno is truly a pragmatist. If he is unable to see the looming disaster, there is no hope at all. I am heartened by some revelations and comments recently. On the other hand, I am discouraged when they talk about the $2 billion debt with IESS this year, but leave out the loan they also took this year and dumped in, as if that didnt count. The retirement portion quadrupled in the last half dozen years, and is no longer even close to affordable.
    ISnt is sad the way they spend so much to lure in Gringos to live, only to rob them while here and on their way out?

    Last thing, crime has started to spike up. It is being attributed to “people are finally reporting the crimes”, but that makes no sense to me.

    Thank you for the clarion sound.

    Like

    1. Hi Loren,
      I really appreciate your comment.
      Yes, the truth is often ugly, and when it is, nobody really wants to hear it.
      But there is no getting away from it at the moment.
      As you say, unless Moreno does some swift, incisive and radical 180-degree about-faces on some of Correa’s utterly deadly policies … Ecuador is toast.
      Unfortunately, I don’t think there is the will or vision for it.
      Currently it seems to be a few steps back for every tentative step forward … almost as if they’re terrified of “succeeding.”
      It would nearly be funny, if the consequences weren’t going to be so dire. 😦
      Best of luck if you jump to Colombia … that is also where I would be going if I weren’t so entrenched in a few things here.
      Guatape, only 90kms from Medellin … is a stunning destination.
      And Medellin is close-by for WE culture/fun!

      Like

  16. Thanks for a very insightful article.

    Moreno appears to fully understand the problems and necessary changes. Though the hour’s getting late.

    You wrote above that you’re often traveled to Peru. And that you would go to Colombia if you weren’t so entrenched in a few things in Ecuador.

    Would Peru be a close second choice for you? What do you see as Peru’s downsides?

    Like

    1. Thanks for the kind words Dan.

      I know Moreno is making many of the right noises, but, sadly, I do not think he has it in him to do even half of what is really necessary … let alone do those things in anywhere near the kind of timeframe which is needed. If he surprises me, then great … I really hope he does. But I doubt it.

      My thoughts re Colombia are personal as well as practical. I loved Colombia … its vitality, its energy, its colour … its food. On a practical side, I just find Colombia a bit more “easy” than Peru, certainly in terms of travelling about domestically. Apart from one (fabulous!) visit to Lima, all my time in Peru has been spent in the north (within relatively easy reach of Vilcabamba) … so this analysis may be a little unfair. Sure though, if you found a place you really liked in Peru, it is also a good option at the moment. Certainly it is also light-years ahead in terms of a business environment (far ahead also, of Colombia, for that matter).

      I guess it largely depends on what one’s personal decisions revolved around, and where one’s money is coming from, as to which way any given person might jump.

      Here’s some of my Lima visit! Paragliding! https://www.youtube.com/watch?v=ZyEx3r56IB8 🙂

      Like

  17. No need to post this comment, as it probably doesn’t fit in with the flow of the comment section, but…

    Thank you for your thoughts regarding my Colombia/Peru questions in the above post…and for your “P.S.” updates/commentary above the comment section.

    Like

  18. One key point that I did not see covered in the comments is that in Ecuador there is an obsession with keeping up appearances that few foreigners can grasp the severity of. This causes a kind of reality distortion field where problems are so well hidden that you won’t see them unless you are really paying attention or when they get out of control and become undeniable. It is not just the obsession with appearances that causes problems to fester but also the lack of concern for the substance of things; as long as it looks good and people can maintain a good reputation then that’s all that matters. Examples of this can be seen at the pharmacy, at the bank, the obsession with titles, and the debt the central government owes the I.E.S.S. (Ecuador’s social security).

    At the pharmacy you will encounter people dressed in white doctor ish uniforms just like in the States but unlike in the States you will find that in most pharmacies the people have no clue whatsoever about the medications that they are selling, certainly no clue on proper dosing drug interactions etc. The better pharmacies will have one person that actually knows what they are doing but with everybody wearing the same uniform it is hard to tell who it is. In most pharmacies here it is the blind leading the blind even though it often looks and feels very first world.

    At the bank they will tell you that you can sign up for automatic withdrawal but in Ecuador there is nothing automatic about automatic withdrawal. There is no synchronization between parts of the computer system at the bank and at the electric company for example. “Automatic” withdrawals are done by a manual process which involves he bank keeping an excel spreadsheet with a list of customers they have in common with the electric company who have requested automatic bill pay. Every month they send the updated spreadsheet to the electric company and the bank then sends back a list of the amounts owed by each person which the bank then subtracts from the depositors’ accounts one by one. That is why automatic bill pay here is so unreliable and often breaks because there is no automation and many places where things can go wrong.

    Here people are obsessed with titles and it seems like every other person you meet will have engineering degrees. Most of these engineers could not tell you what the square root of four is without the aid of calculator but they make a big deal about their titles. Here people often get offended if someone addresses them without using their title even though the reality is that degrees from Ecuadorian universities are not taken seriously even in other south American countries let alone any first world country. Then again it does not matter if one has engineering competence or any other competence because it is only the superficial things like the diploma, one’s title and others’ perception of oneself that is valued here.

    The central government owes a few billion dollars to the I.E.S.S. Instead of admitting the only thing in the social security fund are IOU’s from the central government, like U.S. politicians do, Correa claimed the I.E.S.S. was receiving so much more money that it was paying out that it had such an excess of money that it decided it would be more profitable to buy government bonds and receive the interest rather than just having the money sitting there. In both the U.S. and Ecuador central governments forcefully took social security funds to spend on other things but the face-saving approach creates a strong reality distortion field that makes it hard to perceive what is really going on. Here the attitude is that if a problem can be ignored then it is considered solved and problems are rarely solved unless solving them is required in order to save face.

    You perceive Ecuador to have a certain level of functionality and stability based on what you see and hear but its actual levels of functionality and stability are far lower than you could know unless you pull back the curtain and see how this closed society really works under the hood. It is hard for most foreigners to grasp that the minimum wage here is only $375 a month and whenever I mention that in reality many people are earning a lot less than that their eyes glaze over and they are simply unable to process what I have said. In our rural town there is a guy who works doing unskilled manual labor for $5 a day plus you have to feed him lunch. Even people who work in stores in downtown Cuenca often only earn around half the official minimum wage.

    Ecuador still has many good things going for it and is worth saving and worth fighting for. That is why people like myself continue to sound the alarm, not to be able to say we were right if Ecuador turns into Venezuela but to prevent it from happening in the first place.

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    1. I really want to thank you for this comment Michael. It is, sadly, bang-on … and reminds me in some ways of the Japanese (except the respective levels of competence are not even in the same universe, obviously!) … just the face-saving thing.

      It opens up a wholly different avenue of conversation which I’m not going to go into in depth. Suffice to say my ex-wife worked for years at one of the “most prestigious” universities in Ecuador (UTPL) … and what went on behind the scenes there would make you absolutely shudder. Bottom-line? Think … you pays your money, you gets your degree, regardless of ability, attendance or competence … kind of thing. Just terrifying. They really do only want the qualification document and the title … and will do the bare minimum to obtain it by any means necessary.

      It is a sickness of the mind, it is completely entrenched, and … along with endemic corruption and scamming … is one of the biggest things holding Ecuador back from any meaningful progress across a vast array of measures.

      I agree with you that Ecuador is worth saving … it has been heartbreaking for me to watch its rapid demise. Hopefully a miracle of some sort happens, and Moreno pulls it back onto some kind of viable track … but as I’ve said elsewhere, I’m not holding my breath.

      Thanks again for taking the time to compose such a thoughtful comment. 🙂

      Like

    2. Michael, I have been in Ecuador 20 years, I agree 100% with your list of facts. Most important, I agree that Ecuador (and the rest of the world) is worth saving. This is why we sound the alarm of what is wrong; with the hope, that some of you reading these post, will come up with solutions. That some individuals will wake up and take actions to solve the problems. Some issues, like UTPL are extremely slowly improving, but not nearly fast enough to stop the impending doom, nor to produce in time, a new generation of problem solvers.

      It is a shame, that we collectively have the solutions to all the problems, but we are the minority that no one listen to. What would it take for us to be listen by those that have the power to make a difference? Maybe, one of you reading this has the answer.

      I wonder, if anyone in the government reads this forum, or for that matter any other forum. In fact, there seems to be no end to the derailment of the Ecuadorian government and society, though for some almost explainable reason, I have not lost faith yet; call me a foolish optimist.

      I have tried many times alone, to be advisor to the government on many issues, but as a single voice, I only succeeded on the installation of the wind park in Loja; so yes, a single voice can effectuate a real positive change. Sadly, on the real big issues I have not been heard. Issues, like the genocide use of mercury in the gold mining and even in light bulbs, or the crimes of vaccines and pesticides, even GMO which I have written against many times, and speaking up about all the pharmaceutical medical crimes. I have participated in thousands of uncompensated humanitarian hours of work, years of my life; in the end, I feel that I probably wasted all my time; yet I still have not given up, maybe I influenced someone, somewhere, that I do not even know, that will make a difference.

      For my efforts of making Ecuador a better country, I have been viciously attacked by a government conspiracy, and also have been the victim of assassination attempt. What is worse, I have had to endure all these crimes against me, my family and colleagues, almost alone.

      I try do understand what the root problems are, and I attempt to find solutions. For example, I have identified one of the major root problems and that is the fact that approximately 25% of all member of the judicial system are drug addicts and/or psychopaths. This is a real root problem, that can and must be solved, before anything will ever start working well. It does not matter what project you manage to succeed on, when such project is at the mercy of the organized criminal psychopath in the judicial system, who will destroy you and your project in a matter of minutes; this is what happen to one of our projects. This is what is happening to others. This is why humanitarian projects do not succeed. The minute, your humanitarian project really starts to make progress, the judicial system psychopath step in and destroy it. Removing the psychopaths, must be the first thing we all working on, because all else in the end will not matter.

      As a society we are doom if we are not willing to address the elephant in the room and do something about it. The problem, is not going to go away on its own. First step, is denouncing the problem, but next step is doing something about it. Sometimes, that something can be as simple as saying “I support you”, but others can do a lot more, than just sitting back and watching the show. The internet, has provided us a tool to unite, but is barely being used; lets make more and better use of it.

      Below is link to an article I wrote of the subject of psychopath in Spanish. Help spread the word.

      Paremos a los drogadictos y psicópatas jueces y fiscales, esta es la causa de todos los problemas:
      https://drive.google.com/open?id=1VsboSCzy358xoWwYUxZskIpQPGF52NgH-KEgSCXWvLs

      Like

      1. Hi Joel, You have touched on an important point regarding the incompetence and corruption of the legal system. I have been harassed by the government for about a dozen things under the color of law but to the best of my knowledge none if it was the government targeting me specifically other than a guilt by association situation in which it made sense for them to investigate me. After a few years here and having seen how Ecuadorian courts work first hand on a couple occasions as a witness I concluded that it is nigh impossible to get any degree of justice in an Ecuadorian court. After many more years of experience and another court case my conclusion stands. One strange thing about the court system is that it is obsessed with finding compromise between both parties(unless one of the parties is the government). Judges are terrified of having to decide who is right and who is wrong and will bend over backwards to avoid making that call. We actually won a court case involving an 65 year old Ecuadorian woman who is a relative of ours and was beaten and dragged down the street by her sister and sister’s drunk boyfriend over a dispute over an inheritance. I used the same strategy that worked for me in the States of doing all the lawyer’s work and gathering up all the evidence and finding some compelling legal arguments and delivering it all to the lawyer, there was also a witness who was willing to testify, which, for cultural reasons is rare in Ecuador. The only reason we won is due to intense pressure and some rather unusual asymmetrical tactics like showing up to the district attorney’s parents house at night and pleading our case with her parents and my comments to the judge and his staff when I could see that they wore not taking things seriously; at one point I even asked the judge flat out whether it was even possibly to get justice in his court and asked him if he would be dealing with the case the same way if the lady who was attacked were one of Juan Eljuri’s family members. He then signed the papers needed to get copies of the hospital and police records. There were dozens of trips to several government offices where we pleaded our case to as many people as we could find and trips to the hospital and police station to get paperwork for evidence. Although we won, in the end the case was thrown out on appeal because the judge made several technical legal errors even though his verdict was not questioned. The system was so corrupt that there was no longer any legal way to get justice for that specific crime. They claimed the judge would be fined two months worth of minimum wage salary as a result of how he and his office mishandled the case but I never followed up to see if this actually occurred. Even though we lost on appeal the intensity with which we fought gave my wife and I a reputation in the local community as people who won’t put up with any shit and that has benefited us greatly the last couple years and appears to have extended a level of protection to the relative who has not been victimized since even though the dispute that triggered the attack has not been resolved.

        From a business standpoint it is very hard to do business in an environment where there is no legal means to enforce a contract and I have personally had thousands of dollars stolen from me due to this fact. On the bright side my years of living here have taught me alternative ways to solve disputes outside of the legal system and how to create alternative structures that allow for the enforcement of contracts without the court system by maintaining control of key parts of a business. One good thing is that the incompetence and indifference of the legal system can work to your advantage when falsely accused as it has done for me on at least three occasions here.

        My advice to anybody who believes they may be about to become a victim of Ecuador’s legal system is to begin to fight like hell with every asymmetric tactic available and to be ready to try the case in the court of public opinion if need be. Every action against you usually has at least one signature attached to it, find that person and find a way to get in to see them and explain to them what is going on. If you let the paperwork process gain to much momentum you may be in trouble if you are indeed innocent. If you are guilty or in the wrong then the court system is your friend and no asymmetric tactics are needed; just sit back and relax and the system will take care of you. By guilty I mean guilty as in having violated the laws of God or doing things that are ethically wrong not guilty based on government statutes; you will get in trouble for violating unethical government statutes and for any number of technicalities. You should look for the inefficiencies and key choke points in the system and find ways to throw a wrench in the works at every turn; this can cause the lack of desire to complete things that is normally a frustration for expats to work in your favor. If you are able to determine for sure that a person or agency is operating outside of their jurisdiction then sit down with them face to face and inform them that you are aware of this fact and tell them stop harassing you unless they can provide legal justification for their actions (I sometimes do this even when I know that they have justification under Ecuadorian law because most people here are so used to operating under the aura of authority that they are unaware of any legal justification for their actions and often too lazy to look one up). If you are unwilling to assert your rights then your rights will be trampled on as if you were the average Ecuadorian citizen. Study the law that may apply to your case because lawyers here are as passive as hell and see themselves more as facilitators to help navigate the legal system then representatives of clients who have been wronged. Two attitudes I brought with me from the States that have been very useful here are the “not without a warrant / not without a judge’s order” and “show me the law”. Like with any thief you can make yourself less of a target by making the perceived cost of harassing you very high and the perceived benefit to pursuing you very low.

        My way of dealing with things is not a silver bullet and may fail but I highly recommend it as it has worked for me so far in situations where doing things the normal way was almost sure to have failed based on what I’ve seen happen to others both Ecuadorian and expats who dealt with things the way the “authorities” preferred. Some of my tactics are a little unusual like when I turned around the bend on a freeway heading back from Vilcabamba and found my self in a line of cars that were being randomly chosen for warrant-less searches. I knew a friend had pot in the car(this was before the laws against possession were loosened up and there was no way to toss it from the car without being seen). I did not want the cops to steal my vehicle and all I could think of to do was start honking the horn and a block later as we approached the cops I told everyone in the car to keep their mouths shut and addressed the cops angrily demanded to know why they were blocking the road and causing a traffic jamb. They hated me for all the honking and for questioning their actions and seemed as eager as I was to get me out of there. After a momentary glance at my license and registration we were on our way. You should never make a cop feel like you are going to attack but they should understand that you are very different then the last slave they abused and understand that you won’t go down without a fight. If they try to excuse their actions by saying they are just doing their job I just politely tell them “it’s not my fault if you can’t find honest work”. I have not yet had to pay any bribes in Ecuador but depending on your personality that may be a valid option if done in a subtle and indirect manner.

        You must wrap your head around the fact that if you are either innocent or in the right you have an uphill battle ahead and will be considered guilty until you can prove your innocence or find a way to derail the legal processes set in motion against you. If you are innocent or if you have committed a victim-less crime then you must avoid the legal system at all costs. If you have committed an actual crime in which there is a human victim then you have little to worry about from Ecuador’s legal system; in that case just follow the legal process and do as your lawyer suggests and you will probably be fine. I wish I could tell you how to win when in the right but all I can tell you is how to not lose or at least how not to lose most of the time. On one hand the system is stacked against you if you are in the right but on the other hand as the defender you have an advantage due to incompetence and indifference in the system. You must at all times control the frequency that you vibrate at; if you are in a state of fear they will pounce on you like rabid dogs, if you are in a state of passive compliance you will either have to pay a bribe or get fed into the machine for further processing. You must be smart about when to allow yourself to get upset and when to be calm. Don’t give them any way to predict your behavior, the only thing they should be able to predict is that you are not going down without a fight.

        Many times it pays to misdirect government employees and to give them false perceptions. If in business for example and government people come by on some kind of fishing expedition. If you have certain paperwork that you know for sure is in order don’t reveal that you have it at first. Insist that you either don’t need it or should not need it. Put up a big fight over showing it and delay as much as possible only reluctantly turning it over at the end. It will be very discouraging to them when they finally discover that everything is in order with it and can serve to divert them from other areas where you may be at risk for having had committing any one of thousands of victim-less crimes. Don’t fall into the trap of exchanging information to eliminate hassles. If someone tells you that if you just allow them to verify something then they will not have to continue bothering you just tell them its no problem and they are welcome to come back as much as they like but that unless they bring an order from a judge compelling you to do something they are asking for then their is no reason for you to comply. They use that tactic to try to get you to fold and to save them from more hassles; most people capitulate since the unspoken threat of men with guns coming to lock them into a dirty cage is always there. I am always very friendly in my suggestions that they are more then welcome to come back later but the idea of coming back for more abuse is not very appealing to them. If you are going to back down at least wait till they show up with a judge’s order or men with guns; this is risk free and many times they won’t come back. If they come back threatening you with violence then give them the thing they came for but put up the same resistance the next time a request is made. Another thing I do which seems to help although I can’t say why is stress our independence from the government at the beginning of most interactions. Before even getting to the subject at hand I start out by telling them that we are not on welfare, don’t go to government hospitals, have no need for the police to protect us, that we pay our taxes and just want to be left alone. We are independent of the government and neither need nor what their help. I did this instinctively with census people many years ago and it seemed to make them embarrassed for having stopped by so then I started doing it on other occasions. It is very tiring for them to have to go back and bring judges orders or men with guns every time they ask for something.

        Your job is to live free and to help establish a free society for future generations to be able to enjoy. If you are doing your job correctly you will find that most government people eventually come to the conclusion that dealing with you is not worth the hassle. Most are just there for an easy paycheck and won’t keep after you if you make them work for their money. A few are in government because they are bullies but with so many slaves out there who can be easily dominated most of these bullies will eventually move on to easier pickings. Act boldly and unseen forces will come to your aid.

        The strategies mentioned here are only for defensive use and should never be used if you have initiated interaction with government. Also you need to have a clear understanding of what legally constitutes a threat, what legally constitutes an insult, and what legally constitutes harassment in Ecuador because any of those things can get you into trouble when dealing with government goons under the new Correa laws.

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    1. To be honest I don’t know. I have lived in Ecuador for 8 years but have only spent about two weeks in Peru and it was only on vacation and I have not yet visited Columbia yet so I have no idea what the legal culture is like in those countries. If you are wanting to know about the legal system as it applies to ease of doing business there is a report done every year on that by the World Bank. In the most recent year’s rankings of 190 countries on the ease of doing business New Zealand came in at #1, the U.S. #8, Columbia #53, Peru #54, Chile #57, Ecuador #114, Venezuela #187 and Somalia #190.

      http://www.doingbusiness.org/rankings

      The rankings don’t tell the whole story however. I lived in Paraguay for 9 months before coming to Ecuador and they rated it #106 based on the factors they are looking at but it is a poorer country than Ecuador and most people there are fairly lazy in comparison to Ecuadorians so in my opinion the overall business environment there is a lot worse then here. That being said my information on Paraguay is 8 years out of date and I was illiterate in Spanish for most of my stay there, I worked from home making websites for clients in the U.S.. In Ecuador I have dealt with opening an office, business partners, employees, you name it and I married into an Ecuadorian family that fights a lot and often calls government agencies on us when they get mad at my wife so as a result I know much more about Ecuador’s legal system then that of the U.S. where I lived 28 years. For what its worth(probably nothing) my impression from online research is that Chile is the country in South America that has a legal system and laws that are the most similar to that of first world countries.

      Like

  19. Question for Nick. Ok, if things aren’t turned around soon, maybe Venezuela’s fate awaits.
    ….
    What would trigger a path towards Venezuela’s fate, and what would you envision the order of events on the way there?
    ….
    For example, China cutting off funds, or oil prices falling much more; followed by cuts in police manpower, sanitation workers, welfare benefits…leading to lawlessness and violent protests?
    ….
    I’m only guessing. I don’t know. Thus I’m offering the question. And, of course, I hope Moreno is able to make the positive changes he has been advocating, and that no negative events materialize.

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    1. I’ll chime in with my opinion on this while we are waiting to hear from Nick. Moreno promised to double welfare payments for everybody and triple them for handicapped people when running for election. I figured him doing this would plunge us into a death spiral from which we would not recover. Since taking office all signs seem to point to him being much more fiscally responsible than Correa and indications are that he wants to turn the economy back on. I think he believes in the welfare state but after seeing the reality of Ecuador’s economic situation he is pragmatic enough to realize that the increases he desires are not feasible without drastic improvements to Ecuador’s economy. That being said he just increased rural social security payments from $63 a month to $100 a month and is continuing to talk about providing houses for thousands of people.

      Moreno is in a difficult spot because he made huge promises and is aware that the people who put him into office can also take him out, with or without an election. Since election he has also made many promises to business leaders about lowering taxes and opening up Ecuador for business again. He inherited a real mess which may not even be fixable. Let’s remember that after modifying the constitution Correa could have ran for office again but he chose not to. I think he could have won reelection but did not run because he did not know how he could continue to hold the economy together.

      Absent a complete reworking of the economy, which so far we have not yet seen (although it may be starting to occur), the doubling of welfare (specifically “el bono”) remains the trigger factor in my opinion. Most expats will have no problems surviving a Venezuela style collapse in the sense of still being able to afford 3 meals a day but they there will be security issues to contend with that most are ill equipped to deal with. If Ecuador was your plan B then it’s time to start developing a plan C, if not for your safety then for your sanity. There is no need to overreact, just continue to pay attention to things and you’ll have plenty of warning. If you are wise you won’t be like one running away from a snake who runs headlong into the Bear or escapes rioting in the streets of Cuenca only to die from fires igniting over the cities of Babylon.

      Like

    2. Sorry, was away on a jaunt around Ecuador with friends.

      Bottom line is that if Moreno cannot cut away tons of unnecessary red-tape (and unnecessary and unhelpful fees, multas, charges, etc), and alternatively perhaps even positively incentivise the domestic Ecuadorian economy (which is in a profoundly diabolical state) … the existing moribund and depressing economic death-spiral will almost certainly continue. And if it does … then yes, we could continue slip-sliding away into a Venezuela-style societal malaise.

      To be fair, Moreno has surprised me so far in a number of ways, but he still has not focused anywhere near specifically enough (or quickly and incisively enough) on the many domestic ills still plaguing the Ecuadorian economy. Nor has he done anything at all to make Ecuador even remotely more attractive to any kind of foreign investor. Both these situations cannot be addressed quickly enough.

      Look at what is happening with that refinery, for example. That is a macro-example of the sickness of corruption, laziness, apathy and greed … which has been (and still is) killing Ecuador on every level.

      Broadly speaking, Ecuadorians are so accustomed, so inured to the way corruption, nepotism, and “easy money” is seen to be “the way to go” …. it is almost inconceivable they will grow an ethical and fundamentally productive spine anytime soon. And until they do, money will continue to be stolen at every level, and projects will fail all over the place as a result.

      It is super-sad to watch … because this country has truly amazing potential. It’s sad to watch it being unnecessarily flushed down the toilet in so many ways.

      Like

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