or most of June, Ecuador was paralyzed by violent protests against President Guillermo Lasso’s plan to ramp up oil production while cutting fuel and agricultural subsidies. The protests were organized by Ecuador’s Indigenous people’s organization—Confederación de Nacionalidades Indígenas del Ecuador (CONAIE)—and they completely upended the country. Latin American newspapers are comparing the June upheaval to 2019, when Indigenous protests forced President Lenín Moreno to escape Quito and three oil companies to suspend operations.
The newspapers are missing the forest for the trees. CONAIE has mobilized against government support for the oil-industry since its genesis in 1986. Ecuador is stuck in a cycle. In periods of prosperity, the government promises its Indigenous population economic and social equality—then reneges on that promise when oil prices drop.
Latin America is home to the greatest economic inequality in the world, but governments and elites have recently acknowledged reducing that inequality is imperative to the region’s wellbeing. Until Ecuador can shake its dependence on oil, indigenous people will remain marginalized.
The Rise of Oil and CONAIE
When a rich oil field under the Amazon rainforest was discovered in the 1970s, oil extraction in Ecuador skyrocketed. Though the country prospered as a whole, Indigenous peoples—whose land continues to be exploited for oil extraction—did not benefit. In the 1980s, oil prices fell sharply, sparking an economic crisis in the country. Despite not having benefited from the oil production, Indigenous Ecuadorians’ living standards, job opportunities, and social support evaporated.
CONAIE formed in response to the oil boom and ensuing crisis. The confederation’s objectives were to protect indigenous territories and reform the Ecuadorian education system to teach Indigenous languages and cultures. These were concrete steps toward the group’s inclusion in society and ultimately its economic, social, and political equality.
CONAIE gained legitimacy as it staged protests throughout the 1990s and has achieved impressive political sway. As the largest, and sometimes sole force opposing the government, CONAIE has played a pivotal role in the country’s democratization process.
In 2008, then President Rafael Correa oversaw a full constitutional rewrite. Evidence of CONAIE’s growing influence, this new constitution enshrined the Indigenous concept of Buen Vivir [Sumak Kawsay in Quechua], the mutual health of people, communities, and ecology. Buen Vivir acknowledges the close relationship between environmental justice and Indigenous peoples’ social and economic rights in Ecuador. Wellbeing is measured across multiple dimensions—such as happiness, trust, and satisfaction with the government – rather than solely through traditional market economics metrics.
Although it was in clear violation of Buen Vivir, the government funneled unprecedented amounts of money into its oil industry. The idea was that oil would finance a social and economic transition. Once other sectors of the economy grew, Ecuador would ultimately liberate itself from the corrosive industry.
Seesaw Politics
Buen Vivir has proven to be more symbolic than effective. Ecuador’s liberation from oil remains far off, as the country continues experiencing economic crises that the government turns to oil to offset.
Ecuador’s equality project is on a seesaw. The oil market is the weight that decides whether the seesaw is up or down.
During the oil boom years of Correa’s presidency, state spending increased from 21% GDP in 2006 to its peak of 43% GDP in 2013 and 2014. Correa refused to save money because he believed doing so was a neoliberal; thus, when the oil market crashed there was no buoy to keep social programs afloat. After 2014, Correa’s economic policy grew increasingly neoliberal. He cut spending by 6% and reopened discussions with the IMF. The following presidents, Lenín Moreno and Guillermo Lasso, have continued this trend.
Sustaining an Unsustainable Economy
Unlike social spending, Ecuador invests in oil in times of prosperity and in times of trouble. Early in Correa’s presidency, the government had planned to redistribute land to make the country’s farming sector more productive. The 2009 Buen Vivir National Plan called for a transfer of state-owned land to land-scarce farmers, the purchase of unproductive lands, and the creation of a national land fund. None of this came to fruition. The manufacturing sector did not grow either. In fact, it shrunk. During Correa’s presidency (2007-2017), manufactured exports fell from 25.7% in 2007 to 16.4% in 2014. Despite dramatic fluctuations in oil prices and revenues, oil has been Ecuador's top export since 2011.
To this day, Indigenous Ecuadorians continue to face extreme income inequality. Indigenous families are 13% more likely to be poor. This is primarily because Indigenous Peoples are two to three times less likely to hold a high-skilled job. In the last decade, the probability of an Indigenous Ecuadorian working in the informal sector has increased by 12%. These Indigenous workers are excluded from social security, health insurance, retirement funds, and other work benefits. These statistics hold true, regardless of gender, level of education, number of dependents, and place of residence.
The truth is, Indigenous Peoples’ wellbeing is not prioritized, even if the constitution says it is. Cutting fuel subsidies disproportionately hurts indigenous peoples who typically have low incomes, and expanding oil production destroys the health of the Amazon and people living there. Not to mention, oil production falls when the country is gripped by protests.
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Oil is Corroding Ecuador’s Democracy
Image via Unsplash
August 15, 2022
In periods of prosperity, the Ecuadorian government promises its Indigenous population economic and social equality—then reneges on that promise when oil prices drop. Until Ecuador can shake its dependence on oil, indigenous people will remain marginalized, writes Millie Brigaud.
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or most of June, Ecuador was paralyzed by violent protests against President Guillermo Lasso’s plan to ramp up oil production while cutting fuel and agricultural subsidies. The protests were organized by Ecuador’s Indigenous people’s organization—Confederación de Nacionalidades Indígenas del Ecuador (CONAIE)—and they completely upended the country. Latin American newspapers are comparing the June upheaval to 2019, when Indigenous protests forced President Lenín Moreno to escape Quito and three oil companies to suspend operations.
The newspapers are missing the forest for the trees. CONAIE has mobilized against government support for the oil-industry since its genesis in 1986. Ecuador is stuck in a cycle. In periods of prosperity, the government promises its Indigenous population economic and social equality—then reneges on that promise when oil prices drop.
Latin America is home to the greatest economic inequality in the world, but governments and elites have recently acknowledged reducing that inequality is imperative to the region’s wellbeing. Until Ecuador can shake its dependence on oil, indigenous people will remain marginalized.
The Rise of Oil and CONAIE
When a rich oil field under the Amazon rainforest was discovered in the 1970s, oil extraction in Ecuador skyrocketed. Though the country prospered as a whole, Indigenous peoples—whose land continues to be exploited for oil extraction—did not benefit. In the 1980s, oil prices fell sharply, sparking an economic crisis in the country. Despite not having benefited from the oil production, Indigenous Ecuadorians’ living standards, job opportunities, and social support evaporated.
CONAIE formed in response to the oil boom and ensuing crisis. The confederation’s objectives were to protect indigenous territories and reform the Ecuadorian education system to teach Indigenous languages and cultures. These were concrete steps toward the group’s inclusion in society and ultimately its economic, social, and political equality.
CONAIE gained legitimacy as it staged protests throughout the 1990s and has achieved impressive political sway. As the largest, and sometimes sole force opposing the government, CONAIE has played a pivotal role in the country’s democratization process.
In 2008, then President Rafael Correa oversaw a full constitutional rewrite. Evidence of CONAIE’s growing influence, this new constitution enshrined the Indigenous concept of Buen Vivir [Sumak Kawsay in Quechua], the mutual health of people, communities, and ecology. Buen Vivir acknowledges the close relationship between environmental justice and Indigenous peoples’ social and economic rights in Ecuador. Wellbeing is measured across multiple dimensions—such as happiness, trust, and satisfaction with the government – rather than solely through traditional market economics metrics.
Although it was in clear violation of Buen Vivir, the government funneled unprecedented amounts of money into its oil industry. The idea was that oil would finance a social and economic transition. Once other sectors of the economy grew, Ecuador would ultimately liberate itself from the corrosive industry.
Seesaw Politics
Buen Vivir has proven to be more symbolic than effective. Ecuador’s liberation from oil remains far off, as the country continues experiencing economic crises that the government turns to oil to offset.
Ecuador’s equality project is on a seesaw. The oil market is the weight that decides whether the seesaw is up or down.
During the oil boom years of Correa’s presidency, state spending increased from 21% GDP in 2006 to its peak of 43% GDP in 2013 and 2014. Correa refused to save money because he believed doing so was a neoliberal; thus, when the oil market crashed there was no buoy to keep social programs afloat. After 2014, Correa’s economic policy grew increasingly neoliberal. He cut spending by 6% and reopened discussions with the IMF. The following presidents, Lenín Moreno and Guillermo Lasso, have continued this trend.
Sustaining an Unsustainable Economy
Unlike social spending, Ecuador invests in oil in times of prosperity and in times of trouble. Early in Correa’s presidency, the government had planned to redistribute land to make the country’s farming sector more productive. The 2009 Buen Vivir National Plan called for a transfer of state-owned land to land-scarce farmers, the purchase of unproductive lands, and the creation of a national land fund. None of this came to fruition. The manufacturing sector did not grow either. In fact, it shrunk. During Correa’s presidency (2007-2017), manufactured exports fell from 25.7% in 2007 to 16.4% in 2014. Despite dramatic fluctuations in oil prices and revenues, oil has been Ecuador's top export since 2011.
To this day, Indigenous Ecuadorians continue to face extreme income inequality. Indigenous families are 13% more likely to be poor. This is primarily because Indigenous Peoples are two to three times less likely to hold a high-skilled job. In the last decade, the probability of an Indigenous Ecuadorian working in the informal sector has increased by 12%. These Indigenous workers are excluded from social security, health insurance, retirement funds, and other work benefits. These statistics hold true, regardless of gender, level of education, number of dependents, and place of residence.
The truth is, Indigenous Peoples’ wellbeing is not prioritized, even if the constitution says it is. Cutting fuel subsidies disproportionately hurts indigenous peoples who typically have low incomes, and expanding oil production destroys the health of the Amazon and people living there. Not to mention, oil production falls when the country is gripped by protests.
