Ecuador

UNLIKE other Latin-American countries where the armed forces rule from behind the facade of civilian government, Ecuador makes no attempt to conceal the nature of its present regime. To all telephone calls to the Palace of Government, a sweet feminine voice answers, “Military junta.”

But after more than two years in power, the “Four Horsemen of the Apocalypse,” as the military leaders composing the junta are popularly termed, face obstacles far more formidable than those which confronted them when they overthrew Ecuador’s most recent constitutional government on July 11, 1963. The disorders which broke out in mid-July of this year are symptomatic of widespread disaffection with the regime. Indeed, the fate of the junta will test the proposition that a reform-minded military government can be an effective instrument for progress in Latin America.

With its 112,000 square miles (approximately equivalent to the state of Colorado) divided among coastal lowlands, lofty valleys in the Andes Mountains, and trackless jungle, Ecuador is an unmistakable anachronism in South America today. Regional rivalry between the coast, with its bustling port, Guayaquil, affectionately known as the Pearl of the Pacific, and the sierra, where the center of government is located in Quito, continues to impede the development of a sense of national unity vital to a serious assault on the nation’s problems.

The lack of any ideology or effective programs emanating from the political parties fosters a tradition of demagogic, caudillo-type leadership. Corruption is a way of life on every level of government. A powerful, conservative Catholic Church exerts a profound political influence on the country. A huge Indian population exists outside the national life, and in large part, outside the national economy. Finally, the gradual loss of territory, culminating in the seizure of 71,000 square miles by Peru in 1942, has produced a pathetic preoccupation with the recovery of these lost lands. Add to this catalogue of woes the usual problems facing underdeveloped countries — a feudal system of land tenure, a military prone to interfere in politics, an expanding population, an increasingdisparity between rich and poor, and an excessive dependence upon one crop (bananas) for foreign exchange earnings — and you get some idea of the difficulties facing any Ecuadorian government.

Three times out

The political unrest which has been threatening the junta during the past year stems from the presidential elections of 1960, won by Ecuador’s most intriguing political figure, José Maria Velasco Ibarra. This was the fourth term in office for Velasco. His undiminished popularity with the masses derived from peerless oratorical prowess and complete honesty, a quality notably absent in his political rivals and enemies.

A year later, the military removed him from office for the third time in his career, as once again the old caudillo could not fulfill extravagant campaign promises, lost political support, and was unable to check the ensuing chaos. This marked the end of thirteen consecutive years of constitutional civilian rule, a remarkable feat in view of the fact that between 1925 and 1948, Ecuador had seen twenty-two presidents, dictators, or juntas.

After a bit of a scuffle between the army and air force, Vice President Carlos Julio Arosemena was installed as president. Arosemena, a clever but unstable politician with a serious drinking problem, undertook to bring about reforms but was thwarted by the conservatives. He flirted with the left, could accomplish nothing, and was finally ousted by the military on July 11, 1963.

Since Velasco had been a heavy favorite to win the 1964 elections ("Give me a balcony,” he once declared, “and I will become president”), the armed forces dissolved the legislature, suspended the constitutional process, and decided to make a fresh attempt to reform and modernize the country. The Communist Party was outlawed and the political situation stabilized. After rewarding themselves with promotions in rank, the members of the junta decreed a series of moderate reforms affecting such vital areas as land ownership and tax collection. The junta’s rule lacked the oppressive character of most Latin-American dictatorships. But opposition eventually developed as the mild reforms began to step on toes.

In 1963, over nine hundred autonomous national, regional, and municipal agencies had tax-collecting powers enabling them to acquire revenues which never passed into the Ecuadorian treasury. In fact, the treasury received only about 40 percent of all taxes collected. When the junta moved to change this curious state of affairs and bring about a greater degree of centralization, there was opposition from Guayaquil, Ecuador’s largest city, where many of these agencies were located.

Then, when the junta issued decrees changing the customs-collecting laws, resistance from the powerful commercial interests in Guayaquil reached crisis proportions. Attempts to raise duties on imports of goods manufactured in Ecuador and to force importers to make actual, rather than deflated, declarations of value resulted in rioting on the streets of Guayaquil in mid-July, 1965. The students, unhappy because junta reforms deprived them of much of their extraordinary control over the university, added their usual zest to the demonstrations, and martial law was declared. The city soon calmed down as the junta abandoned its reforms. Autonomy was restored to many of Guayaquil’s agencies, and the sting was removed from the new customs laws.

None the worse for wear

The opposition in Guayaquil can be traced in large part to the hostility felt there toward the serranos, the inhabitants of the Andean sierra. The people of Guayaquil proudly display a sense of civic and regional pride in the fact that the coast contributes some three fourths of Ecuador’s national income. They look with scorn on the bureaucrats and civil servants of Quito, whom they consider to be living off the fruits of Guayaquil’s toil. Further, they point to the lack of Guayaquil residents within the officer corps of the armed forces and the upper echelons of government, and accuse Quito of neglecting the problems of the coast.

The July riots also provided Ecuador’s political parties with an occasion to press for a return to civilian government. When a member of the junta disdainfully remarked that the politicians were so weak they could not organize even the members of their own families, a political “Patriotic Junta” was formed, and demonstrations were scheduled. Though public support failed to materialize, the military junta deported a number of politicians. The exiles were soon allowed to come back, none the worse for wear after trips to Paraguay at government expense.

The political parties, supported by the Guayaquil merchants, want an interim civilian president to supervise elections as soon as possible. But a political settlement is impeded by the fact that the politicians amount merely to a group of “outs” wanting “in.” The three major parties, Conservative, Liberal, and Socialist, are so divided that even the splinter groups have splintered. They lack a constructive program and look more to the persuasiveness of personality for their success. In addition, the proclerical Conservatives and the anticlerical Liberals are still warring over the role of the Catholic Church.

Among the smaller parties are ARNE (Ecuadorian National Revolutionary Action), a group of extreme rightists advocating a sort of neofascism; the Velasquistas, faithful to the old caudillo; and several insignificant brands of Christian Democracy,

A factor adding to the political unrest is the gradual deterioration of the economic situation. An agricultural nation, Ecuador depends upon the export of bananas, coffee, and cacao to furnish 90 percent of its foreign exchange earnings. Bananas predominate, and in the past several years, have been the mainstay of the economy. Recently, banana exports from Formosa have taken the Japanese market away from Ecuador. The recovery of Central America’s plantations from the ravages of plant disease has greatly reduced the shipment of Ecuadorian bananas to the United States. As a result, it is estimated that Ecuador will lose some $25 million in earnings during 1965. This in turn will increase unemployment, restrict credit, and perhaps even deflate the value of the sucre, a monetary unit which has been remarkably stable in recent years.

The military junta issues constant reminders of its accomplishments. A close examination of these claims reveals that it has scored some genuine successes, many of which are comparative rather than absolute. They are decided improvements over the meager accomplishments of past civilian governments, but they are pale before the magnitude of the problems to be resolved. For example, a sorely needed tax reform has eliminated much of the red tape which used to make it extremely difficult for an honest person to fill out a tax return. Simplified procedures now encourage the payment of taxes, and revenues have increased considerably, although nothing so drastic as a criminal prosecution for tax evasion has been attempted.

The centralization of tax collection has been impeded by resistance from Guayaquil. The junta might have been in a better position to enforce its reform had it first eliminated the autonomous revenue-raising powers of the Board of National Defense, an agency of the armed forces which receives directly not only such funds as a tax on theater tickets but also the proceeds from the estates of persons who die without heirs and without a will.

Another loss of tax revenue is caused by the smuggling of large quantities of goods back and forth across the borders of Colombia and Peru. The government receives no customs duties on this merchandise, and in some instances, local industries are hurt by competition from lower-priced contraband. The government’s ineffectiveness in this area is not surprising, since the brother of one of the members of the junta is a notorious smuggler.

To starve at home

A widely heralded agrarian reform is one of the junta’s major accomplishments. The thrust of the law is to destroy a feudal system of land tenure which for centuries held the Indians of the sierra in virtual serfdom. The landowner would furnish the Indian a piece of land, called a huasipongo, in return for four or five days of labor per week at a wage of a few pennies. The Indian, or huasiponguero, was generally paid but once a year, and thus was forced to borrow, usually from the landowner. The existence of their debts, which passed from generation to generation, tied the Indians to the land.

The new law abolishes the system of huasipongo and gives the Indian title to his piece of land. As a measure of social justice, it is a milestone. As an effective land reform, it is a beginning. Unless agricultural credit and technical assistance are also provided, the law will mean, one American observer wryly noted, merely that “the Indian will be able to starve in the privacy of his own home.”

In addition, a virtual social revolution will be required to bring the more than two million Indians of the sierra into the twentieth century. Many still address the white man as “Your Grace,” and kiss his fingers, first slipping a shawl or poncho between their lips and his hand. Attitudes such as this can hardly be expected to facilitate enforcement of the minimum rural wage which the new law provides. Nor will they produce resistance to such practices as the theft of clothing from trespassing Indians, who must then render free labor for the landowner in order to redeem their property.

The junta has initiated a vigorous attack upon the housing problem through the Housing Bank of Ecuador and a series of loans from the United States under the Alliance for Progress. In the beginning, construction was slow. Only eight units were completed in 1963. By 1964, 167 additional units were ready for occupancy. The program was impeded by bureaucratic entanglements and rising costs due to land speculation. A dramatic failure was the construction of an 1800-unit project near the Guayaquil airport. Because no provision was made for water, electricity, or sewerage, the completed homes form a ghost town in an area notable for its housing shortage. In October, 1964, an army colonel took over the Housing Bank and streamlined its operation. The program is now operating at full speed, and it is expected that 6000 new units will be completed by the end of 1965.

Yet according to the most recent report of the Inter-American Development Bank’s Social Progress Trust Fund, in 1964 Ecuador’s housing deficit amounted to 500,000 units. In order to meet annual requirements caused by population growth and replacement needs, some 28,700 units would have to be constructed each year. A visual grasp of the problem may be obtained through a visit to the seemingly endless slums of Guayaquil, where 300,000 people, or half the population of the city, live under conditions as wretched as any in Latin America.

Furthermore, the whole construction program currently being operated by the Housing Bank provides loans merely to those who can afford them. For the most part, the prospective homeowner must be earning $70 to $80 per month in order to qualify for a loan. This eliminates laborers, who earn an average wage of $40 per month, the 50 percent of the work force which is unemployed or underemployed, and practically the entire rural population.

The American presence

The United States is firmly committed to the course of moderate reform undertaken by the military junta. Through the Alliance for Progress Washington has made available to Ecuador a modest number of grants and about $126.7 million in loans from October, 1961, to March, 1965, slightly less than $8 per capita per annum.

The positive effects of American aid to Ecuador derive from local appreciation of tangible accomplishments, such as schools, houses, and roads, and from the excellent work being done by the Peace Corps.

On the minus side of the ledger is the close identification between the United States and the Ecuadorian military. In a country whose government could not survive without American political, economic, and military support, it is not surprising that many Ecuadorians are firmly convinced that the United States played some role in the events of July, 1963, especially since the immediate provocation of the coup was the insulting behavior of President Arosemena toward the American ambassador at a banquet in Quito.

The American presence in Ecuador is concentrated in Quito. The belief that the central government neglects and discriminates against Guayaquil has already led to the charge that the Alliance for Progress pays insufficient heed to the coast. This dissatisfaction was not lessened by the use of “made in U.S.A.” tear gas by the police during the July riots in Guayaquil.

Up to now, the extreme left has enjoyed little success in mounting an offensive against the status quo. When President Arosemena followed a “neutralist" foreign policy and leaned toward the left in an attempt to bring about reform, Ecuador’s conservatives raised the specter of a Communist threat and urged the military to move. Terrorist activities were attributed to the Communists, but it is now admitted that these were mostly the handiwork of ARNE, the extreme rightists. The Communist Party, not immune to the virus of fragmentation affecting the rest of Ecuador’s political institutions, was easily crushed and dispersed by the military after Arosemena was overthrown. Yet it would be folly to dismiss the possibility of a resurgence by the extreme left. Ecuador, in its relative backwardness, has still not reached the stage where its masses have begun to indulge in “rising expectations.”

The terrain of Ecuador is perfect for guerrilla warfare. The counterinsurgency capabilities of the armed forces are not highly regarded. Several sorties into the mountains and jungles by young would-be terrorists lacked any semblance of serious organization and were thwarted without difficulty. But the emergence of a charismatic leader espousing violent change could alter the situation drastically.