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 rort it really is.

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.

SeparationOfPowers

This 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.

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.

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31 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 rort it really is.

  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. 🙂

      Like

      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. 🙂

        Like

  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.

    Like

    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! 🙂

      Like

  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. 🙂

      Like

  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.

      Like

  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. 🙂

      Like

  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. 😦

      Like

  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

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  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

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