Gustavo Coronel, a Venezuelan oil oligarch associated with Cato has written to let me know how much he despises Ecuador’s President Rafael Correa. Coronel serves as his own “official scorer” so he has declared that one of my columns “made a failed attempt to whitewash the President of Ecuador, Rafael Correa, who is violating environmentally fragile areas of the Amazonia to drill for oil.” This is a passing strange comment from a man whose professional life was spent growing wealthy by “violating environmentally fragile areas of the Amazonia [and elsewhere] to drill for oil.” You may think that Coronel reached a late-life epiphany and is seeking to make up for a life violating environmentally fragile areas, but no such transformation occurred. Coronel simply sees an opportunity to attack Correa, and Coronel has dedicated his remaining life to attacking any Latin American leader who opposes the oligarchs.
Coronel was the campaign manager for the oligarch’s candidate who was defeated in the election that brought President Hugo Chavez to office. Coronel did not accept the legitimacy of the democratic process in Venezuela. He describes himself as the “founding member of the Board of Directors of Petroleos de Venezuela (PDVSA).” While PDVSA was owned by Venezuela, the Board acted like oligarchs. They became such virulent opponents of Chavez that they locked-out the workers in order to extort the government by denying it vital oil revenues. The Board went so far as to institute a sabotage campaign damaging government equipment to try to cause such economic chaos that it would topple the democratically-elected government of Venezuela. Coronel continues to defend the campaign that caused enormous damage to the economy and people of Venezuela.
“As a member of the group of ‘coup plotters’ I think that we were acting in defense of PDVSA as an institution and in defense of the national interest. Chavez had placed a president who was totally inept and hated the managers he was called to supervise.”
Coronel seriously claims that he and his fellow PDVSA oligarchs were legally entitled to sabotage the national economy because the government official appointed to run a government-owned agency was their political opponent.
When the early attacks on the Venezuelan economy in their overall campaign of extortion failed, the PDVSA leaders supported the coup that briefly removed Chavez from power. The coup plotters installed an oligarch with close ties to a PDVSA leader as the new ruler of Venezuela.
Coronel denies that there was any coup. He claims that the PDVSA had the legal right to lead an insurrection against the democratically-elected government of Venezuela.
“Those of us who are in the opposition still fervently hope to see Chavez out as quickly as possible. Gott obviously does not know that Article 350 of the current Venezuelan Constitution gives Venezuelans the right to rebel against an illegitimate regime that violates the laws of the land. This would not be ‘overthrowing’ a president but simply exercising a constitutional dictum. I happen to believe that a well documented legal, political, economic and social case can be made to prove that Chavez is no longer a legitimate president.”
Coronel is not a lawyer and the Venezuelan Supreme Court unsurprisingly rejected his claim that anyone in Venezuela has a constitutional right to stage a coup against the Nation’s elected leaders.
Chavez’ political foes ran a clever attack on him that disgraced Transparency International (TI). Chavez’ most virulent opponents, including Coronel, ran Venezuela’s branch of TI. They proceeded to use TI-Venezuela as cover for their partisan attacks on their political opponents who the Venezuelan people elected to office. TI-Venezuela gave the PDVSA the lowest rating on transparency claiming that it failed to make key information publicly available. TI’s claim was false. When the claim was exposed as false TI claimed that the data were not available at the time they wrote their report. That claim was also exposed as false. TI refused to correct its false attacks.
Coronel does not simply disagree with the policies of the heads of state elected in Latin America because they promised to end the rule of the oligarchs – he despises these elected officials and the people who voted them into office. His rhetorical attacks on the elected leaders are vibrant. He has nothing good to say about them, their policies, or their supporters.
Coronel’s response to my article strikes me as odd because he appears to agree with much of what I wrote. What I stressed in my piece was that Correa’s policy proposal – Ecuador would not produce the Yasuni oil if developed nations would share in the opportunity cost of the revenue that producing the oil would provide to Ecuador – was the best available policy. The point of my article, however, was to emphasize the revulsion we should display for The Economists’ malicious glee in the misfortune that could be caused to the environment of Ecuador and its indigenous people by producing the Yasuni oil. I stressed that once the developed nations rejected Correa’s innovative plan Ecuador was left with no good policy choices about the Yasuni oil field. Whatever policy Ecuador chose would have severe drawbacks.
Coronel postures himself as an environmentalist who is aghast that Correa would decide to produce the Yasuni oil because the developed nations would not agree to share in the opportunity cost to Ecuador of not producing the oil. Coronel’s hypocrisy reeks of the high-sulfur oil he developed in environmentally sensitive areas all over the world for five decades.
But Coronel’s hypocrisy is even greater in a related portion of his response to my article. Coronel’s real passion is denouncing Correa for purportedly extorting the developed world.
“Correa’s money demands sounded very similar to that of a kidnapper who demands a ransom not to harm the kidnapped. It is actually worse, since the kidnapped is a member of the kidnapper’s own family. His attitude and double standards made it impossible for him to receive any money. He, then, full of spite, authorized the drilling in the Yasuni Park….”
Coronel does not deny that there would be an enormous opportunity cost to Ecuador of not developing the Yasuni oil field. He does not deny that Correa’s offer to the developed world was that Ecuador would share that opportunity cost rather than try to shift it entirely to the developed nations. Correa did not place an oil field in the Yasuni – nature did. There was no “spite” involved. There were no “double standards that made impossible for him to receive any money.” If “kidnapping” were an applicable metaphor, neither “attitude” nor “double standards” on the part of the purported kidnapper would be relevant to receiving a ransom. The entire passage is logically incoherent. Coronel, an oil guy, simply ignores the reasons that nations develop oil fields because they need revenue. The ludicrous kidnapping metaphor demonstrates Coronel’s spite, not Correa’s.
Coronel argues that his criticisms of my column are based on the “evidence.”
“Mr. Black’s perspective is not substantiated by the evidence.
He starts by claiming Correa is one of the two most popular leaders in Latin America, according to a polling company based in Mexico. Another polling company, Latino Barometer, based in Chile, ranks Mr. Correa in the 11th position among 18 Latin leaders (last, in 2012, was Hugo Chavez).”
I did not start by talking about Correa’s popularity. I started by talking about the four legs of Correa’s policies for economic and social development. As I have explained in other articles at greater length, the irony is that the four policies are praised even by the neo-classical economists. I noted later that Correa was popular in Ecuador because he delivered on his promised policies and the policies were transforming life for millions of Ecuadorians. This is why Correa has been reelected with such strong support in democratic elections.
When I discussed Correa’s popularity I provide the citation and relevant quotation so the reader could review the context. My claim about his popularity was “based on evidence.” Coronel states that there is another survey that he does not cite or provide a link to that reported different results. I cannot evaluate an unknown survey with precision, but it appears that the survey results Coronel recites would not be based on national surveys, but rather regional surveys. In other words, the polls and election results confirm that Correa is exceptionally popular with Ecuadorians. He may be far less popular with people in Colombia. There is a very recent publication that confirms the reliability of the survey I cited – and it is from a source dear to Coronel’s heart – Fox News.
“A compilation of polls released this week appear to indicate those heads of state who take a tough guy stance toward the United States remain the most popular leaders in the region.
Ecuador’s Rafael Correa, Nicaragua’s Daniel Ortega and Evo Morales in Bolivia are all wildly popular in their home nations and wildly unpopular in the halls of Washington. In contrast, U.S.-friendly presidents like Colombia’s Juan Manuel Santos and Sebastián Piñera of Chile rank at the bottom of the list.
Both Colombia’s Santos and Chile’s Piñera have approval rating well under 40 percent – 25 and 36 percent, respectively.”
An important note that U.S. media often fail to understand – Latin American leaders who object to certain policies of the United States government are not “anti-American.” Correa, for example, studied in the U.S. and has great sympathy with the American people.
A fuller story on the polls can be found in the McClatchy article.
“They’ve proven to be politically very astute. They have a connection to their base, and they are delivering to the poor,” said Michael Shifter, the president of the Inter-American Dialogue, a Washington research center.
Recent World Bank outlooks for Ecuador, Bolivia and Nicaragua hail the economic achievements in those countries.
Under Correa, Ecuador has reduced income inequality, expanded the middle class and reduced poverty from 37 to 27 percent since 2006, the outlook says.”
Note that McClatchy is making the same point I made. The reason that Correa is so popular in Ecuador is that he delivers results that have improved the lives of the people of Ecuador. He has been so successful that the World Bank and Fox News have praised him.
Coronel then ends on an even more incoherent passage.
“Behind Correa’s actions in Amazonia there is a selfish, short-term political and economic motive. He needs money to consolidate his grip on power.
Ecuador already owes $9 billion to China and needs oil to pay back this huge loan. Correa is using the same suicidal, anti-national, oil policy being followed by the regime that controls power in Venezuela.”
Correa was just overwhelmingly reelected for his final term and the electoral support for his party was so strong that they gained a majority in Parliament. He does not need money to consolidate his grip on power. He needs money to continue his four key development policies – increasing the provision of health, education, and infrastructure while reducing bureaucratic barriers to entrepreneurship. These policies are the opposite of “selfish” and “short-term.” The four pillars are altruistic, practical, and the keys to fostering long-term growth and development. Ecuador lacks a sovereign currency, so it inherently “needs money” to provide vital services. That would be true under the most right-wing government.
As I explained in my column that Coronel said he was responding to, Ecuador has one of the lower governmental debt burdens: “Of the 155 total nations for which the CIA reports data on public debt, 125 nations have higher ratios of debt than Ecuador.” Coronel makes no substantive response to the data. He relies entirely on anti-factual rhetoric (“huge” loan from China). Coronel then ends with the claim that “Correa is using the same suicidal, anti-national, oil policy” as Venezuela. It is true that Chavez and Correa both ended the scandalously low royalties for oil production that enriched foreign producers. Does Coronel want to restore those dramatically lower royalties? That would be “suicidal” and “anti-national.” It turns out that Coronel is enraged because Correa is following economic policies that are pro-national and pro-survival and provide the revenues to simultaneously produce enormous improvements in health, education, and infrastructure while holding down public debt to levels below that of roughly 85% of all nations. Once more, the thing that drives Correa’s critics into incoherent rants is their rage that his policies have proven so successful.
The development of the Yasuni oil is a tragedy. It is deeply unfortunate that the developed world did not adopt Correa’s innovative proposal that would have prevented the production while still allowing Ecuador to fund additional improvements in the four pillars of development.