The following is a recent editorial in El Comercio that I thought was worth translating.

source: http://tinyurl.com/2x3srn

El libreto populista
Por Vicente Albornoz Guarderas

El libreto de los gobiernos populistas es relativamente predecible. Si se analiza la presidencia de Siles Zuazo (Bolivia 1982-1985) y el primer período de Alan García (Perú 1985-1990), se encuentra interesantes similitudes entre los dos y con el actual gobierno del Ecuador.

The libretto [1] of populist governments is relatively predictable. If one analyzes the presidency of Siles Zuazo (Bolivia 1982-1985) and the first term of Alan Garcia (Peru 1985-1990), one finds interesting similarities between both, and with the present government of Ecuador.

La historia siempre empieza con mucho optimismo, con infinito amor. Un gobierno lleno de buenos deseos inicia su mandato dentro de altas expectativas populares. Entonces, algo en la economía le molesta, algo le disgusta. Puede ser cualquier cosa o cosita que simplemente no esté dentro de su ideal de cómo debe ser la realidad. En ese momento, el gobierno decide intervenir en la economía, y lo hace con los mejores deseos y con una enorme dosis de voluntarismo (ese convencimiento casi mágico de que todo se puede resolver si existe la suficiente buena voluntad).

The story always begins with great optimism, with infinite love. A government filled with good intentions begins its mandate with high popular expectations. Then, something in the economy troubles it, something displeases it. It can be anything large or small that does not fall within its ideal of how reality ought be. At that moment, the government decides to intervene in the economy, and it does so with the best intentions and an enormous amount of voluntarism (that almost magical conviction that everything can be solved if there exists sufficient good will).

Pero en la economía nada funciona por simple buena voluntad (ni mala voluntad). En la economía las decisiones de trabajar, invertir y producir se toman en base a la rentabilidad esperada en esas actividades, eso que los economistas llamamos ‘los incentivos’.

But in the economy nothing works by simple good will (nor bad will). In the economy the decisions to work, to invest and to produce are taken on the basis of the expected return from those activities, that which economists call 'incentive'.

Estábamos en que el gobierno interviene la economía y lo hace con infinito voluntarismo, olvidándose de los incentivos que mueven a productores y trabajadores. Oh, sorpresa, la economía no reacciona como el gobierno quisiera. Lo de ‘oh, sorpresa’ es total y absolutamente irónico.

Wherein the government takes part in the economy, and does so with infinite voluntarism, forgetting the incentives that motivate producers and workers, surprise! The economy does not react the way the government wanted. The surprise is total and absolutely ironic.

Pero más irónico todavía es que en lugar de corregir el error, los gobiernos populistas reaccionan subiendo la dosis de la misma medicina y, ante una reacción ‘indeseada’ de la economía, se meten más en ella y distorsionan más y más los incentivos. Tarde o temprano el asunto explota como lo hizo en Bolivia y Perú hace dos décadas.

More ironic still is that instead of correcting the error, populist governments react by increasing the dose of the same medicine and, when faced with the undesired reaction of the economy, intervene further and distort those incentives even more. Sooner or later the issue explodes, as it did in Bolivia and Peru two decades ago.

Veamos el caso de la leche en el Ecuador. El aumento en el precio no es el resultado de especulación, ni de mala voluntad ni de deseos de desestabilización por parte de los lecheros o de los pasteurizadores. Es simplemente porque vivimos en un mundo interconectado, donde la demanda por leche ha subido, al igual que el costo de los insumos para producirla. Basta ver las páginas web de los supermercados peruanos o colombianos para constatar que el litro en Bogotá o Lima cuesta, aproximadamente, 20 centavos más que en Quito.

Take the case of milk in Ecuador. The increase in price is neither the result of speculation, nor of bad will or desire to destabilize on the part of milkmen or pasteurizers. It is simply because we live in an interconnected world where the demand for milk has increased, as have the costs of the means to produce it. One has only to view the web pages [2] of Peruvian or Colombian supermarkets to see that a liter in Bogota or Lima costs approximately 20 cents more than in Quito.

Pero todo eso es irrelevante para los populistas. El alto precio de la leche les molesta y hay que bajarlo. Con infinita pasión, se lanzan a fijar ese precio por decreto. Y lo logran: el precio se está manteniendo, más o menos, dentro de lo fijado. Pero ahí no termina la historia, porque los productores ya se están quejando que les pagan muy poco e insinuando que van a dejar de producir si no se cambia ese incentivo clave llamado ‘precio’.

But all that is irrelevant to the populists. The high price of milk annoys them, therefore they must lower it. With infinite passion, they set forth to fix the price by decree. And they obtain that: the price stays, more or less, within that range. But the story does not end there, because producers are already complaining that their return is too low, and insinuating that they will cease production if this key incentive called 'price' isn't changed.

En el libreto populista, el siguiente paso podría ser importar leche subsidiada (matando a la industria local), dar subsidios a los productores (lo que es insostenible en el tiempo y termina beneficiando a los productores amigos de los gobiernos) o subsidiar los insumos (promoviendo un mercado negro de insumos). Y sería tan fácil para un gobierno tan apto en temas comunicativos decirle al país que la leche subió porque tenía que subir. Pero claro, eso no cuadra en el libreto.

In the populist libretto, the next step would be to import subsidized milk (killing the local industry), provide subsidies to the producers (which is unsustainable over time and ends up benefitting producers who are friends of the government) or to subsidize the inputs (promoting a black market in those inputs). And it would be so easy for a government so apt in communicative skills to say to the nation that milk went up because it had to. But clearly, that's not in the libretto.


[1] the choice of the word "libretto" seems designed to draw attention to a basic feature of populism. In music, the libretto is the score followed by the players in such works as operas or musicals. It is rarely written by the composer himself, but is added after the fact as the musical director sees fit, giving due consideration to the venue and intended audience.

[2] this reference to web pages draws attention to the fact that Ecuadorans have a means outside the government of verifying the truth of things. I may be reading more into this than was intended, but it definitely struck me that way.

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My comments:

For the last several weeks I've been reading every editorial and commentary I can lay my hands on. Originally I had intended to translate them and post them here, but the task is too daunting. There are only so many hours in the day, and given my somewhat limited skills and the sheer volume of material to cover, I've had to abandon that idea. I will, however, continue to post such articles as seem particularly relevant to our position, and to the destiny of Ecuador. I should add that while I've tried to remain true to the text, these are not perfect translations, and where a turn of phrase or syntax would result in an awkward construct, I've chosen to rearrange (though not rewrite) the text.

This particular article seemed to sum up all that is wrong with the current agenda. There are many divisions within Ecuador, not just between parties and interests, but within Acuerdo Pais itself. For those of you too lazy to learn Spanish (come on, it's easy!) I suggest you visit El Comercio from time to time and view the political cartoons. They really capture the essence of the situation.

From everything I've read, my tentative conclusion is that despite the confident rhetoric, this government will careen from one crisis to another until popular discontent relegates it to history, or at best to a seat in opposition. The question then is, what comes next? That's what I'm currently trying to determine, and as soon as I have some notion I'll share it with the group.

ebear