Ecuador Throws Out World Bank Rep Over Oil Aid:

[Graham Saul]

 Hi all,

 

Direct World Bank financing for oil companies is worth hundreds of millions of dollars a year, but the Bank's behind the scenes work to make the world safe for Big Oil is priceless. While Bank support for mega-projects involving Exxon and BP tends to get most of the attention, the Bank's biggest impact on oil comes from its role in pressuring countries to reform their oil sectors in ways that suit the interests of international oil companies. This is a complicated form of “oil aid” with a lot of layers to it, which is why it usually goes unreported, but today's events in Ecuador are a useful reminder of how far the Bank is willing to go. As outlined in the article below, Ecuador's new President, Rafael Correa, accused the World Bank today of “extortion”, saying that the Bank froze a $100 million credit to punish him for reforming the oil industry, and he has expelled the Bank employee that is accused of doing the arm twisting.

 

Cheers,

 

Graham Saul

Oil Change International

 

27/04/07 10h17 GMT+1

AFP News brief

Ecuador expels World Bank representative

http://www.france24.com/france24Public/en/administration/afp-news.html?id=070427091646.o4ucig2d&cat=null

 

President Rafael Correa expelled the World Bank's representative from Ecuador, accusing the institution of trying to extort money from him when he was economy minister in 2005, officials said Thursday.

 

The leftist president, in office since January, has charged that the global development lender suspended a 100-million-dollar loan for Ecuador in 2005 in retaliation for his reform of the country's oil sector.

 

The foreign ministry said in a statement that Correa declared World Bank official Eduardo Somensatto of Brazil "persona non grata" -- a diplomatic term equivalent to an expulsion -- and immediately informed the Washington-based bank.

 

According to diplomatic sources, the letter implies the representative's expulsion but does not necessarily mean the suspension of the bank's activities in Quito.

 

"The declaration of persona non grata implies that Somensatto should leave the country urgently, a bit urgently or not urgently at all," Jose Luis Moreno, a former diplomat, was quoted as saying in the newspaper El Comercio.

 

The foreign ministry said the World Bank was notified of the decision by letter Tuesday to the bank's offices in Washington and Quito. At the time, Somensatto was outside the Ecuadoran capital, it said.

 

Ecuador has also decided to have any loans still due to it from the World Bank suspended, Economy Minister Ricardo Patino told reporters Thursday.

 

In Washington, the World Bank said it wanted to keep open its communication channels with the Ecuadoran government and was evaluating the implications of Somensatto's "withdrawal."

 

"We reiterate the willingness of the institution to maintain dialogue at the highest level with the nation's authorities," the bank said in a statement.

 

Correa had announced on three occasions since April 15 that Somensatto would soon be expelled in reprisal for the freezing of a 10-million-dollar World Bank credit while Correa was economy minister under then president Alfredo Palacio in 2005.

 

Correa said the bank froze the credit to punish him for reforming the oil industry, and accused the multilateral lender of "extortion."

 

Correa's reform was designed to create an oil fund to buy back the Ecuador's sovereign foreign debt.

"When I became minister and turned out not to be a messenger boy for the World Bank, they held the check," Correa said on April 21.

 

"They messed us around for three months, and when I went to Washington, they told me that they did it because we reformed our law. That is, they punished a sovereign country for rewriting its own law," he said.

 

"Ecuador is a sovereign country and we will not stand for extortion from this international bureaucracy," said Correa.

 

Correa favors overturning the neoliberal economic policies of his predecessors and strengthening the role of the state in several sectors of the economy.