John Kaiser sent out an e-mail with his assessment this morning. He sees this as a power struggle between Acosta and Correa and he sees Acosta coming out the loser. This of course isn't going to happen overnight as Acosta starts feeling the heat for his idealist reforms from disgruntled Ecuadorians. He feels that Ecuador may be a good bet but it will be on hold for the next year or so but he also mentions that this is the same scenario for the rest of the junior market. He says to wait and see and perhaps it may be time to take advantage of the low prices.

I'm amazed at how many people still view this as a struggle between Acosta and Correa, with Correa gaining ground. I don't see it that way at all. Correa endorsed the mandate, so he, not Acosta, will take the heat. As a politician he must know this, and as an economist, he must have known the effect it would have. It is not just mining interests that are threatened - this will have a negative impact on foreign investment across the economy, including with their largest trade partner, the USA.

Acosta's position is clear and always has been: No to mining. You can fault him for this, but you can't accuse him of flip-flopping, as Sylvia Santacruz called it. Correa on the other hand runs hot and cold on the issue. If he signed on to what was obviously an Acosta initiative, it suggests he is losing, not gaining support within the party. If that's the case, it demonstrates that he is prepared to put his interests before those of the nation - an opinion already widely held in Ecuador anyway, so nothing new there.

I think we are being presented with a well-crafted theatrical production: the Acosta/Correa split. As long as there's some doubt as to who will prevail, the party will hold together. That's the game that supercedes all else IMO. Keeping AP united so they can complete their agenda before the opposition can regroup and derail them. The economy matters only to the extent they need it to finance what comes next: Bolivarian Socialism. For that they have Venezuela's support, but they can't be too open about it or they'll alienate some of their own, many of whom still believe this is a democratic movement.

To me, the race is between a socialist movement that is pushing its agenda via constitutional reform and abuse of presidential decree, and the collapse of the Ecuadorean economy which will bring people into the street. The Acosta/Correa theory should be ignored IMO. They are fellow travellers. Peas in a pod. Our best hope lies with the Ecuadorean public who having tasted Chavez-Lite, find it more bitter than they expected.

History is on our side here. The shelf life of Ecuadorean presidents is short and this one is about to expire.

ebear