The Manta base, Ecuador. Expect Otto's blog to be hacked at any moment.

"Denial ain't just a river in Egypt" (Mark Twain)

Strange comments yesterday from William Brownfield, the USA's ambassador to Colombia. When asked about the possible plans for a US military base to be set up in Colombia once the agreement with Ecuador for the Manta air base runs out in 2009, Brownfield said (translated from the Spanish report),

"At the moment the gov't of the USA is waiting for a final decision from the gov't of the Republic of Ecuador over the future of the collaboration between Ecuador and the USA at the Manta air base.....If the Ecuadorian gov't decide to terminate or close the collaboration there, the gov't of the USA will be forced to look for another place where we can do this most important joint work against illegal drugs....among those (possible future air base) sites are without doubt some places in Colombia."

Big plane with a mushroom on top at Manta. Note the US military synchronized
swimming team doing "dry practice" in the foreground

If Colombia decides to let the US build an air base, then so be it. Two sovereign countries can agree to do what they want, basically. But to clear up any "confusion" the USA might have, your helpful Otto spent all of...what?.....four minutes on the internet yesterday and using the breaking news he found there, can help the USA decision-making process move forward.

24 Oct 2007: "The termination of the agreement of the Manta base is not negotiable." President Rafael Correa.

16 March 2008: "In 2009 there will be no more foreign bases on our country's soil and the Ecuadorian gov't will not be involved in a conflict that is not ours." President Rafael Correa.

16 January 2008: ....he (President Rafael Correa) also ratified that he will not renew the permit for the US base at Manta which expires in 2009....

12 May 2008: (Bloomberg) Ecuador declined to renew the U.S. lease on a military base that serves as a critical platform in the fight against narcotics smuggling, the New York Times reported.

So there are four of the hundreds of reports I found in those four minutes on Google, some dating back to November 2006 and saying exactly the same thing. Any further questions? If Brownfield really is broadcasting the official US party line here, there is a serious case of denial going on. It would take a coup d'etat that ousted Correa from power for the US to keep its Ecuadorian base...OOPS!...shouldn't have said that!!!!...........

Mind you, the US military seem to be a tad smarter than the diplo corps. In this report, the interviewed general said that another Manta would be unlikely in South America. So we got the gov't suits being all secretive and vaguely threatening, and the guys with the bombs all open and frank. Go figure......

Very sharp pointy aeroplanes at Manta

Meanwhile, Studmuffin Correa has his own version of denial going on, though it could be forgiven as part of the electioneering noises that have already started in the country. Yesterday he made more noises about annulling what he calls illegitimate sovereign debt that was issued by the state in previous years. This report from Reuters is about the only English language version I can find, but it does point to some of the difficulties facing Correa. Amongst other things, he's taking direct aim at the functionaries in the Ecuador Central Bank with this campaign, which isn't likely to be reported favourably in Guayaquil by his journalist pals.

"...Ecuadorean President Rafael Correa said on Saturday he will seek to annul parts of the country's $10.3 billion foreign debt after a preliminary audit report showed indications of "illegitimacy" in borrowing. Correa said a debt commission created last year, comprised mainly of leftist economists and his former economy minister Ricardo Patino, had found irregularities in borrowing by previous governments.

"There will be civil and administrative actions to seek the annulment of illegitimate debt," Correa said during a weekly radio address.

"We can show how many times the lawyers Ecuador hired were the same lawyers that worked for bondholders. ... They stole billions of dollars, those lowlifes, who today are working with the International Monetary Fund and World Bank, and some are still working in the central bank."

Whatever; this bonds thingy is a big and rough-tough issue. If Correa ploughs ahead and eventually declares the questioned bond deals illegal, he'll instantly make Ecuador international biz pariah state numero uno. For an idea about what that means just ask Alan Garcia about his experiences in Peru in the 1980s, when he decided to piss on the Peru sovereign debt holders by unilaterally limiting debt repayments. Of course, Correa will know all this...the guy isn't stupid, and he knows his economics. Otto hopes that this debt denial thing is being rolled out as part of the election campaign and will be dropped as a serious idea at an appropriate moment later. Mind you, hope isn't a rational investment thesis where I come from.......