- The Washington Times - Monday, July 17, 2006

QUITO, Ecuador — Rommel Collantes opened a little pizza shop in a tourist-friendly area of Quito a month ago. The Corrindo Cafe has a small but steady stream of business, but Mr. Collantes is counting on the relative economic stability of the past year to continue so he can make the shop a success.

Mr. Collantes, 38, looks forward to the presidential election in October but sees little assurance of an end to the political and economic uncertainty that has racked the tiny Andean country in the past decade.

Alfredo Palacio became Ecuador’s seventh president in eight years when he took office on April 20, 2005, after the ousting of Lucio Gutierrez by a wave of protest against his market-friendly policies.

Opinion polls indicate no clear favorite in the presidential race.

Meanwhile, Venezuelan President Hugo Chavez, a leftist who has been working to build a unified resistance to U.S. influence in the region, has cast his long shadow over the Ecuadoran elections.

Mr. Chavez has been working with Cuba’s communist leader, Fidel Castro, and other leftist allies in Latin America to promote his brand of economics and politics. He has used Venezuela’s oil wealth as a lure to win support.

Mr. Chavez has furthered his vision of an alliance among Andean countries through bold political and economic measures. He insists such a union is necessary to resist what he calls the force of U.S. imperialism, which he blames for much of the region’s social problems.

In Bolivia, President Evo Morales used indigenous social movements against U.S. influence as a launching pad for his political victory. He has since become a close ally of Mr. Chavez.

When Mr. Chavez visited Ecuador in May, he was greeted by a small group of supporters, including Mr. Collantes.

“Chavez is doing a good thing by bringing together all of Latin America,” Mr. Collantes said. “I don’t know if I agree with his politics, but I agree with him that we need an extreme change and I hope he can help bring it here.”

An opportunity for the Venezuelan leader opened on May 15, when the Ecuadoran government in Quito seized the operations of Los Angeles-based Occidental Petroleum Corp., saying the firm had broken the terms of its contract.

Relations between Occidental and Ecuador had been strained for years, and public sentiment was roundly against the petroleum giant.

The United States quickly criticized the move as “the seizure of assets of a U.S. company,” and cut off negotiations for a free-trade agreement that was nearly complete.

Mr. Chavez moved quickly too, arriving in Quito two weeks later to pen an agreement to refine the Ecuadoran oil.

The agreement will allow Venezuela’s state-run petroleum company, PdVSA, to refine up to 100,000 barrels of the Ecuadoran crude daily and to provide the state-run company, Petroecuador, with technical assistance. Mr. Chavez left open the prospect for more assistance, including helping Ecuador construct its own refinery.

At the signing of the agreement, Mr. Chavez congratulated Mr. Palacio for moving against the U.S. firm and scolded foreign oil interests for “dividing and dominating” Latin American countries in the same tradition as the Spanish conquistadors.

“While this industry is in the hands of the transnationals, it will not be possible for us to develop our petrochemical industries,” he said. “We must defend our national interests and turn down petroleum contracts that have no shame.”

But Ecuador turned down Mr. Chavez’s offer to create an Andean energy alliance that would compete with the U.S. influence. Officials also distanced themselves from Mr. Chavez’s political positions.

“[The agreement] does not imply any political alignment with the positions held by Venezuela,” presidential spokesman Enrique Proano said.

But keeping distance from Mr. Chavez, particularly with an upcoming election, may be impossible, said Michael Shifter of the Washington-based group Inter-American Dialogue.

“It is naive to believe that these are purely technical arrangements. Chavez has a clear political agenda across South America, and he no doubt sees Ecuador as a target of opportunity to further extend his influence,” he said. “Whether he will be able to achieve that aim is another question, but his shrewd use of petrodollars to build wide political support outside of Venezuela is, by now, hardly a secret.”

That effect was clear in the Peruvian elections last month. The victor, former President Alan Garcia, capitalized on Mr. Chavez’s support of nationalist candidate Ollanta Humala. The Chavez factor became the pre-eminent issue in the final weeks before the runoff.

None of the three leading candidates for the October presidential race in Ecuador — Leon Roldos, Alvaro Noboa or Cynthia Viteri — seems particularly sympathetic to Mr. Chavez. However, a significant force behind the country’s social movements supports Mr. Chavez’s agenda, political analyst Hernan Reyes said.

“You have to remember there are two parallel systems that exist side by side in Ecuador: the formal political system and the social movements,” said Mr. Reyes, a professor of sociology at the Simon Bolivar University in Quito. “The president has to negotiate with both in order to maintain his power.”

Last year, Mr. Gutierrez was forced out of the presidency after massive street protests led, in part, by indigenous leaders upset that he had undertaken policies friendly to the free market.

When Mr. Chavez visited Quito on May 30, more than 200 supporters, including representatives of several indigenous groups, gathered at the governmental palace.

Shouting slogans such as “Chavez, Yes. Yankees, No,” they waited more than 10 hours to see Mr. Chavez.

After a six-hour meeting with Ecuadoran officials, Mr. Chavez emerged and met with the crowd. He shook hands over the edge of the stone balcony and danced and sang with a group of indigenous children who were allowed to greet him before he was whisked away to his next engagement.

“All the people are waiting on a change,” said indigenous leader Lourdes Tiban, who was among the crowd. “Chavez is the type of leader that can make that change happen.”

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