Wednesday, October 8, 2008

Step by Step

On Sunday September 28 of 2008, Ecuador adopted its 20th Constitution. The new elected Constitution has 444 articles and by far give more power to the state in what respect to the economy and the political system. About 64.04% of Ecuador’s voting population approved the new Magna Carta, while 28.01% voted “NO”, the null votes added to 7.21% (vote that represents neither yes or no) and blank votes were roughly 0.74%. The decision is clear; Ecuador is following the steps towards a socialist economy or what Mr. Chavez has claimed “Socialism of the 21st century.”

President Correa has aligned his government with the social, economical and political structures those countries such as Venezuela, Bolivia, and others in the Latin American continent. These socio-economic and political structures have been implemented through the region with more emphasis in the last five years. However, it is important to mention that Latin America has always suffered from high levels of dependency in governments. Latin America’s history is full of state intervention through mercantilism, wealth transfers (privileges), and political corruption. Alvaro Vargas Llosa in his essay, The Case of Latin America, says the following about Latin America’s history:

“Reform meant replacing inflation with new taxes, high tariffs with regional trading blocs, government monopolies with private monopolies, price controls with regulatory bodies.”

Ecuador needed to clean its old and corrupted political system; Rafael Correa, who is an economist by education, became the “savior” of the country. He promised to clean after the decadent political system and change the country’s direction for a better future. However, Ecuadorians have forgotten to ask Correa (if he does all what he said he would do) at the cost of what? In addition, to who ultimately will pay for it?

The new Constitution gives Correa the possibility to stay in power until 2017. It gives Correa control over the central bank, judiciary and electoral authority. Correa’s new tool (Ecuador’s 20th Constitution) will create a quasi-Congress, which will be integrated mostly by politicians from his own political party, Alianza Pais. Correa is certainly creating in the short-run but even more in the long-run higher levels of bureaucracy, less property rights protection, fewer incentives for entrepreneurial activity, and more unemployment.

Ecuador is sadly, “Step by Step” moving towards a socialist economy that will only lead the country to a social chaos. It seems that President Correa forgot about his economic education and has become a senseless politician. Ecuadorians are losing their individual liberty, and economic freedom. Robert Lawson mentions in his essay, Economic Freedom and Property Rights;

“After over a decade of research, the empirical evidence is overwhelmingly clear: Societies that organize themselves with private property, rule of law, and free markets outperform, on almost every measurable margin, societies that are less economically free”

Ecuadorians must not allow Correa to become a dictator. If we want a better country for our future and the future of our children then open your eyes and see beyond the false promises of a corrupt politician like Correa.