Tuesday, March 23, 2010

Review of Anne-Marie Slaughter (2004) - The Real New World Order

Anne-Marie Slaughter argues that globalization has transformed world government from “hierarchies to networks, from centralized compulsion to voluntary association” (Slaughter, 2004). Essentially, these changes have resulted in a deficit, as the transfer of power from state to nonstate actors does not always equal out.

Essentially, the deficit has occurred as a result of globalization in which hierarchies no longer exist, therefore regulatory power has diminished. Furthermore, participation in an agreement, or submission to government without governance has resulted as the power of enforcement does not lie within any one authority. This results in a participatory deficit as states can choose to opt-in or opt-out.

The transfer of power, albeit uneven, Slaughter argues is not the state,

“disappearing, it is disaggregating into its separate, functionally distinct parts. These parts—courts, regulatory agencies, executives, and even legislatures—are networking with their counterparts abroad, creating a dense web of relations that constitutes a new, transgovernmental order.” (Slaughter, 2004).

This also creates a problem, as Slaughter argues, “private power is still no substitute for state power” (Slaughter, 2004).

In order to solve the deficit, Slaughter proposes “transgovernmental cooperation” which, through shared knowledge, will provide a deliberative equality. This equality would stem from the sharing of information, deliberation of such information to be mutually agreeable to all parties, and therefore the most sensible way to fix the participatory and governance power deficit.

Slaughter, A. (2004). The real new world order. Foreign Affairs, 76 (5), 183-197. Retrieved on March 15, 2010 from http://web.ebscohost.com.library.norwich.edu/ehost/pdf?vid=2&hid=12&sid=84e8e4e7-da1c-4346-b46e-d05d3e8b6b48%40sessionmgr10

Consequences of Global Debt


Introduction
.    During World War II, participating countries met to hold the United Nations Monetary and Financial Conference. What resulted was the creation of the Bretton Woods Agreement.
The Bretton Woods Agreement created the International Bank for Reconstruction and Development (IBRD). At first, the goal was to help Europe recover from the ravages and devastation of war. However, the IBRD has now become part of the modern day World Bank whose mission has changed from reconstruction to poverty reduction. Today the World Bank states that its mission is to "fight poverty with passion and professionalism" (http://www.worldbank.org/). But how is this accomplished?
Through the World Bank, primarily the IBRD and the International Development Association (IDA), loans are given to poor countries to help finance development and poverty-reduction programs that the country would, otherwise, be unable to afford. Annually, the World Bank loans "22 billion to developing countries" (http://www.library.thinkquest.org/). Of that 22 billion, " [t]he Latin American region receives the largest share of World Bank loans – $5.2 billion, or 24% of the total amount loaned" (http://www.library.thinkquest.org/). These loans are repayable with interest to the lending bank from the country to which it was loaned.
This key aspect, the interest, is commonly overlooked and the consequences are unaddressed. As stated by the Center de Derechos Economicos y Sociales (CDES) (2006),
"[w]hen we hear that countries should honor the payment of their public foreign debts, we need to ask: Who contracted these debts and how were they used? And, why should we pay them if we derived no benefit from them[?]." (http://www.oid-dio.org/)
Does the benefit to the borrowing country outweigh the consequences?
Ecuador's Case
"Ecuador is in far worse shape today than she was before we introduced her to the miracles of modern economics, banking, and engineering. Since 1970, during this period known euphemistically as the Oil Boom, the official poverty level grew from 50 to 70 percent, under- or unemployment increased from 15 to 70 percent, and public debt increased from $240 million to $16 billion." (Perkins, 2004, p. xxii)

During the early 1970's Ecuador's economy soared along with global oil prices. Exports in oil increased as a percentage of GDP while non-oil exports decreased. The economy relied heavily on the taxation of oil to provide the funding for an expanding budget deficit. "Public-sector expenditures, adjusted for an average annual inflation rate of 14 percent, [and] swelled about 65 percent during this period" (http://www.country-data.com).
In the mid 1970's oil revenues declined, but the budget remained the same. To compensate for the difference Ecuador began to borrow to cover the difference. In addition the Ecuadorian government increased subsidies and public-sector employment in an attempt to "bail out" the economy. "Between 1976 and 1979, the foreign debt more than quadrupled; after 1979 the rate of borrowing decelerated, but still the foreign debt had doubled by the end of 1986" (http://www.country-data.com). The cost to service the debt, effectively the interest, had become more than Ecuador could produce. The threat of default loomed, and led to restructuring of Ecuador's debt by the IMF, World Bank, and other lenders. Restructuring, however, had its prices as well.
While lenders argue that a complete restructuring, economic and political, was necessary for long term debt relief, it appears that short term consequences illustrate a much different picture. Restructuring essentially led to less control for the people of Ecuador. As a condition for additional borrowing, privatization of infrastructure and water was required in some cases. Furthermore, liberalization ensued resulting in larger profits for private corporations and greater market capital.
The Beginning of Debt
    Ecuador's vast supply of oil coupled with an increased deficit and need for revenue opened the door to a barrage of lending and foreign investment. Lending came in the form of loans from the IMF and World Bank; foreign investment came from companies such as Shell and Chevron Texaco. Foreign investment in Ecuador's oil produced revenue, but what were the costs to the people, to the environment, and to the political stability of the country?
The dollar cost to the people of Ecuador, "grew from $574.3 million (13% of the external public debt) in 1981 to $4.1 billion (39.9%) in 2006" (Romero, 2007). These numbers, while alarming, are even more substantial when you compare them to the guidelines established by the IMF for Heavily Indebted Poor Countries (HIPC).
According to the IMF standards,
"for a country to have a sustainable economy, servicing of the foreign debt must not exceed 15 % of total exports, total foreign debt must not exceed 150% of total exports, and total foreign debt must not exceed 280% of total government income." (http://www.oid-ido.org/)
By 2001 the cost to service Ecuador's debt exceeded these standards in all three categories.    
The debt problem in Ecuador was exasperated by the devaluing of the nation's currency, the sucre. The devaluing of the sucre began in the mid 1980's as inflation affected Ecuador's economy, and took off when Ecuador adopted a crawling peg exchange rate. By January of 2000 the sucre had plummeted to 25,000/ 1USD, forcing the government to convert to a dollar based currency, that same month, in an attempt to stabilize the crisis.
The Micro-level Cost
    Since the colonial period the people of Ecuador have been affected by conflicts as a result of discrimination, class struggle, and political force. During the colonial period the indigenous tribes of Ecuador were subject to the conquest of the Incas and later the Spanish Conquistadors. In 1822 Ecuador won its independence from Spain and joined the Republic of Gran Columbia. Even then, there was no political stability.
Catholic influence and the Liberal Revolution followed, and war with Peru broke out during the Depression. Political instability continued and changes in power, legitimate or illegitimate, continued to occur approximately every two years. "Since independence from Spain in 1822, there have been more than ninety changes of power" (http://www.ecuadorexplorer.com).
    Political instability has provided fuel to the dysfunctional economy throughout history and, in turn, the economy plays a key role in political dysfunction. The heavy reliance on exports has created a rich lowland, coastal region in Ecuador, whose local economy is driven by the export business. The import and export of agricultural products in the lowlands competes with the modest economy of the Andean highlands and the small farms that exist there. This often results in political gridlock within the country which makes it difficult to accomplish any lasting political and economic progress.
    Recent examples of political gridlock in Ecuador include the inability of the government to pass economic reforms which would give the state more control over private institutions. The reforms, introduced to parliament by Ecuador's President Correa in 2007, became so distorted that once passed, they no longer represented their original intent. According to IPS News' Kinto Lucas (2007), "[t]he left-wing Correa does not have legislators of his own, because his Alianza País party did not present legislative candidates in the October 2006 elections, and his initiatives have so far gained only weak support in Congress" (http://ipsnews.net).
    Just as economics have affected politics and vis a versa, the same is true for the social structure as well. As stated by the International Debt Observatory's Lidy Nacpil (2005),
"[d]evelopment is a concept and a process that encompasses all of the dimensions of human life - economic, political, social, cultural, emotional, spiritual, gender and sexual, as well as the interaction of humanity with the earth and environment. All of these dimensions are interrelated and mutually influencing." (http://www.oid-ido.org)
On a domestic level, Ecuador has seen many changes to their population and social structure since the beginning. Initially, indigenous tribes were affected by disease which was brought by immigration of the Inca's and Spaniards during the colonial period. Disease and oppression resulted in more than "70 percent of the indigenous population [dying] by the end of the century" (http://www.migrationinformation.org).
This societal fraction that began during the colonial period carried on. Indigenous tribes were seen as backward and a barrier to progress as Ecuador attempted to establish a stable economy and political structure.
Since the 1970's and the oil boom corporatism has taken root in Ecuador. In an effort to meet expanding fiscal demands, "[i]ndigenous peoples were under pressure to become 'peasants' and 'agricultural workers' with no special rights or claims to the resources of the state" (Romanow, 2010, p. 19). The social and economic discrimination that began during the colonial period is, to this day, difficult to overcome.
One such example of corporatism which resulted in the displacement of indigenous people and social unrest was the Agoyan hydroelectric project. The project blocks the waters of the Pastaza River by dam and has the capacity to generate 156-megawatts of electricity. According to John Perkins (2004), "[s]uch projects are the reason Ecuador is now a member of the global empire, and the reason why the Shuars and Kichwas and their neighbors threaten war against our oil companies" (p. xxiii).
These billion dollar projects, which are projected by developers to improve infrastructure and to create prosperity, through modernization, have played a role in creating the massive amount of debt that Ecuador faces. Most economic gains, if any, support a small handful of wealthy elite while more than "65% of the population lives below the national poverty line" (http://www.ecuadorexplorer.com).

The Macro-level Cost
The effects of Ecuador's debt on international relations and the global economy have also had noticeable impacts. The most noticeable change is how debt is structured and subsequently restructured.
The oil boom around the world transformed Ecuador economically throughout the 1960's and 1970's. The economy saw growth rates of 9% GDP annually. Ecuador also increased imports in the late 1970's at a rate of about 7% annually. As the oil boom came to an end, inflation set in and erosion of income resulted.
In addition to these problems,
"the period between 1976-1979, when, under the dictatorship of the Supreme Government Council, Ecuador contracted $3.4 billion in debt. Of this nearly two-thirds was used to finance military expenditures. After multiple reschedulings, conversions and further borrowing, Ecuador's external debt has risen to more than $10 billion today." (http://www.jubileeusa.org)
Much like today's recent financial crisis and debt bubble which was driven by mortgage debt, commercial lenders of the 1970's and 1980's would often lend to emerging economies with no regard to their ability to pay back the debt. This lending resulted in the Third World debt crisis of the 1980's.
Ecuador attempted to re-negotiate their debt in the late 1980's, and through such negotiations, gave up any protection provided under the Foreign Sovereign Immunity Act. Essentially, this reduced Ecuador's power as a "sovereign" state on the international stage, as the Act provided jurisdictional authority for U.S. Courts in, "Foreign States" (28 U.S.C. § 1603(a),(b)) who waived their right to sovereign immunity.
In addition to reducing Ecuador's sovereignty, this agreement soon resulted in higher interest rates on existing debt. According to Dennis Small (2008),
"U.S. Federal Reseve Chairman Paul Volcker's 1981 raising of interest rates up to 21%, drove Ecuador to default on debt it had contracted at 6%, and the ensuing refinancing operations capitalized the unpaid interest into an unpayable mountain of new debt." (http://www.larouchepub.com)
    The IMF and creditor banks recognized that the mountain of debt was insurmountable for Ecuador and stepped in with a plan. The plan allowed private sector debtors to issue payments on foreign debts in sucres, the national currency of Ecuador. However, the sucre was losing value, therefore the government of Ecuador picked up an additional "1.5 billion in private sector debt" (Small, 2008), as it acted as the exchange agent between the private sector and foreign creditors.
    Febres Cordero, Ecuador's president in the late 1980's, implemented policies that continued to devalue the sucre. One policy lifted foreign-exchange controls for private-sector imports and tightened monetary and credit policies in an effort to counter the strong demand for dollars to finance imports. This too proved futile.
    In a final effort to curb "sucretization," Cordero increased government spending and loosened private-sector lending. Again, this "bailout" failed to save Ecuador. From 1987 – 1992, Ecuador again suspended its debt payments.
    In 1992, Ecuador, in an effort to gain credits with the IMF, signed a Tolling Agreement which waived the country's right to prescription (termination) of commercial debt that was more than six years in arrears, as established by law in the United States and England.
    In 1995, Ecuador restructured its debt by use of the Brady Bond. Brady Bonds allowed for the transfer of commercial debt and overdue interest payments into new debt which was collateralized by U.S. Treasury bonds. In the event of a default by Ecuador, the purchaser of the debt in the secondary market would be paid when the U.S. Treasury bond, or collateral, matured. This process, known as the Brady Plan,
"called for the United States and multilateral lending agencies (including the International Monetary Fund and The World Bank) to cooperate with commercial bank creditors in restructuring and reducing the debt of those developing countries that were pursuing structural adjustments and economic programs supported by these agencies." (Lee, 2000, p. 2)
The financial crisis continued and in 2000, the Brady Bonds were again
exchanged for Global Bonds. Finally, in 2007 an independent Public Audit Commission (CAIC) analyzed Ecuador's debt and reported its findings to the government of Ecuador.
    The findings resulted in President Correa's announcement that Ecuador would default on the Global Bonds, on the grounds that the debts were incurred "illegitimately" and therefore in violation of Ecuador's Constitution and international law.
    Default on sovereign debt on the claim of "illegitimacy" fueled fears in international markets in the midst of the 2008 crisis. It is exceedingly rare in global finance for a nation not to honor its debt because it doesn't want to, as opposed to not being able to make payments because of a financial crunch. As argued by Anthony Faiola (2008), staff writer for the Washington Post, "[s]ome analysts fear it may set a precedent, emboldening other leaders who share Correa's ideology -- such as Venezuela's Hugo Chávez -- to make similar pronouncements" (http://www.washingtonpost.com).
    In effect, Ecuador's default on these bonds left investors around the world questioning emerging market debt and restructured the way that many analysts viewed this sector of the market.
Macro Level Social Implications
    In addition to restructuring the way that debt was financed, Ecuador's debt and devaluing of the sucre led to massive emigration of Ecuadorians to all areas of the world.
    The first financial crisis of the 1980's which resulted as a collapse of oil prices and massive inflation drove many farmers out of Ecuador as wages decreased. Most of these farmers went north to the United States, following trade routes that had been established through their business.
    This first wave of migrants caused the United States to pass, "[t]he Immigration and Reform Control Act of 1986 [which] granted legal permanent resident status to 16,292 Ecuadorians, many of whom have been able to use this legal status to sponsor family members" (www.migrationinformation.org).
    The Immigration and Reform Control Act is a minor example of how Ecuador's debt resulted in emigration and changed the domestic laws and social structure of another sovereign nation. This instance, however, would pale in comparison to the massive outflow of Ecuadorians in the early twenty-first century.
    The second wave of emigration occurred in the late 1990's and early 2000's. The devaluing of the sucre had affected the middle class population of Ecuador the most. Elites in Ecuador were wealthy enough that massive inflation and increase in price of imported goods did not impact them. The poor, while affected, were not as reliant on imported goods. It was the middle class of Ecuador that suffered the most consequence, as they relied heavily on imports and the export revenue from the agricultural business of Ecuador for survival.
During this time, "the sucre, lost more than two-thirds of its value, and the unemployment rate rose to 15 percent and the poverty rate to 56 percent" (www.migrationinformation.org). These problems were compounded by policy that did not provide assistance to the farming business and floods that damaged the crops of farmers.
This emigration was much larger than that of the 1980's. It,
"sent more than half a million Ecuadorians overseas from 1998 to 2004. In contrast to the previous wave, this one was broader. Emigrants came from every province, and they were more urban and somewhat better educated; they also came from various ethnic groups, including members of the Saraguro and Otavalo indigenous groups." (www.migrationinformation.org)
    The global social and political consequences of this migration proved to be much broader as well. Most migrants entered into Spain and other Western European countries. Spain was most attractive, prior to 2003, as it did not have a law requiring a visa. Because of this, Ecuadorians entered Spain as tourists under the existing "no tourist visa" agreement. In addition to this agreement, "Ecuador and Spain signed a bilateral agreement which provided legal work visas for nearly 25,000 unauthorized Ecuadorians in January 2001" (www.migrationinformation.org).
    By 2003 Spain changed its visa requirements and ended the scrupulous tourist issues. This however did not affect the nearly 200,000 Ecuadorians already residing in the country. Therefore, "[i]n 2004, Spain passed a 'regularization' law (Real Decreto 2393/2004) that granted legal status to more than 400,000 Ecuadorians" (www.migrationinformation.org).
     While some emigrants did move North to the United States, it was in much smaller numbers. Tighter border restrictions in Central America, Mexico, and the United States increased the risk and cost of illegal crossing of borders. Nonetheless, "[f]rom 2000 to 2005, an average of 9,196 Ecuadorians per year obtained legal residency" (www.migrationinformation.org).
    This number of immigrants to any country can have serious social and political implications. Groups will carry with them political, social, cultural, and religious ideals and norms. Migrants often group together, seeking community and commonality which will change the political composition of the existing population as these norms and ideals are integrated into the surrounding socio-political landscape. This in turn can influence election outcomes on a local and national level and therefore has the possibility to affect international relations.
    Some examples of this impressive change in population are evidenced by this migration.
"In 2005, Spain reported an Ecuadorian population of 487,239; the vast majority live in Madrid (35 percent), Barcelona (18 percent), and Valencia/Murcia (22.8 percent). Some analysts consider the official figure to be an undercount because not all Ecuadorians in Spain are registered. If that is the case, then the Ecuadorian population in Spain may be between 550,000 and 600,000.
Population estimates for the Ecuadorian population in Italy range as high as 120,000. Italian statistics on the other hand, recorded 61,953 Ecuadorian citizens in 2005, 62 percent of whom were women. Ecuadorians, who are concentrated in Genoa, Milan, and Rome, are the largest Latin American immigrant group in Italy and the 10th-largest national group overall" (www.migrationinformation.org).
These numbers are perfect examples of how drastically a local population can be changed, be it by sheer volume, or by composition.
Environmental Impacts of Debt
"Thus, out of every $100 worth of oil torn from the Amazon, less than $3 goes to the people who need the money most, those whose lives have been so adversely impacted by the dams, the drilling, and the pipelines, and who are dying from lack of edible food and potable water." (Perkins, 2004, p. xxiv)
The impacts of the discovery of oil fields in the Amazonian rainforest have had multiple consequences on the local population and biodiversity of Ecuador. Local indigenous tribes have been uprooted by the development of dams, oil fields, and mines.
Dams, deemed necessary for infrastructure development and energy to drive commercialization, have changed water flow. This has hurt downstream agriculture, decreasing food supply, revenue, and even creating water shortages.
The development of oil fields has resulted in deforestation, conflicts over property rights, and political unrest between displaced indigenous cultures and the government of Ecuador.
Currently, Ecuador is not benefiting from recent increases in oil prices because of a lack of the government's control over private contracts. As a result, commercialization and exploitation of the agribusiness and mining have also begun. In order to fuel energy demands for this work, more dams are planned across Ecuador. One such project, "Zamora would help provide generation for copper and gold production by companies including Vancouver-based Corriente Resources Inc…" (www.bloomberg.com).
The Zamora project will further add to the debt cycle of Ecuador, as Bloomberg (2010) estimates place the cost of the project at around "6 billion dollars" (www.bloomberg.com). Most of this will be financed by the government and other external sources such as the "Export-Import Bank of China" (www.bloomberg.com).
Other side-effects of commercialization include pollution. Drying up of important water flows have resulted in the stagnation of water and therefore the pollution of some of the only wells available for drinking water to local populations. If not polluted, the wells have all together dried up due to a drop in the water table, caused by a diversion of water supply created by the dams.
The Baba River Dam, in Ecuador, has created issues of human rights violations which have resulted in protests and pressure on the government of Ecuador. The basic right to food is at question in the Baba basin. Food is supplied to this area primarily through fishing, which, "is a vital component of the food habits of the families living in the shores of the Baba river. Since the construction of the Baba project would diminish or eliminate the fishery, it would thus put at stake the right to food of these families" (http://www.fian.org).
Development of oil fields and mines has resulted in contamination of bathing and drinking water surrounding the projects. As recently as 1997 reports have showed an increase in skin problems of people who live around such projects and higher cancer rates.
Angry citizens have banded together to fight the government of Ecuador, who reliant on oil revenue, withdrew from Organization of Petroleum Exporting Countries in an effort to increase production.
Efforts by angry citizens have resulted in international lawsuits.
"In a welter of lawsuits surrounding the Texaco legacy in Ecuador, lawyers who say they represent 30,000 Amazon Indians tribes filed a class-action suit last November in a New York Federal court for $1 billion in cleanup costs and damages; the authors of yesterday's report have filed affidavits supporting the Indians' cause. A few weeks later, Texaco filed five suits in Ecuadorean courts demanding that the Government pay a total of $570 million for breach of contracts." (http://www.nytimes.com)
    Loose government policies accompanied by massive sovereign debt are a vicious cycle, whose effects, are played out domestically and internationally in Ecuador. Policies create a "rush to the bottom" effect, drawing in international corporations who profit under loose environmental regulations. In turn, the country of Ecuador has suffered, and continues to suffer the consequences.
    So where in lies the solution to such a perpetual problem?
Possible Solutions
    The re-structuring of debt, while a short-term solution has proven itself to be unreliable in Ecuador. International Monetary Fund policies aimed at pressuring the restructuring of economic policy within the country have also failed in Ecuador.
    This top-down approach failed to recognize areas of internal control and external lack of control in regards to Ecuador. Essentially, the IMF's approach assumed that Ecuador's economic structure and irresponsible lending was the only cause for their massive debt. In reality, unregulated, irresponsible lending and fiscal policy was only part of Ecuador's problem. External factors, such as interest rates and global oil prices were completely out of Ecuador's control and contributed to the magnification of the problem.
    For these reasons, "[m]any observers have come to share Jeffrey Sachs's assessment of structural adjustment programs: 'The sobering point is that programs of this sort have been adopted repeatedly, and have failed repeatedly'" (www.mtholyoke.edu).
    The emerging world's ability to cope with external factors will have to be recognized and dealt with in order to produce a system which will be able to produce long-term solutions for debt and poverty.
Trade will undoubtedly play a large role in the process, as emerging markets rely heavily on the export of primary commodities for revenue. To reduce this risk, increasing exports in alternative areas, such as manufactured goods, is vital.
"The newly industrializing countries of East Asia are the exceptions that prove this rule. Because they have been able to expand manufactured exports, they have improved their relative economic situation tremendously in recent years. Other countries have been less successful, and the recent resurgence of protectionist measures against manufactured products from the developing world will make this type of transition only more difficult. Ultimately, the solution to the debt crisis, and the underlying poverty that spawned it, must address this terms of trade issue." (www.mtholyoke.edu)
    In addition to addressing the issue of trade on a macro-level, it is necessary to address and assist in the micro-level development of heavily indebted countries' long-term economic growth. This bottom-up approach would allow countries to grow out of their debt. Unless there is a viable way to produce such results, long-term success is next to impossible.
"The inflows of capital to the IMF from the heavily indebted countries were more than a gross embarrassment; they were conclusive evidence of the IMF's misunderstanding of the causes of the debt crisis. The IMF should shift its perspective to more creative or appropriate ways of stabilizing or depressing interest rates rather than raising them, or ways to prevent capital flight from developing countries, or any number of issues that concern the specific conditions of economic growth." (www.mtholyoke.edu)
Capital flight remains a large problem in the case of Ecuador. While it is arguable that developing countries are incapable of producing the resources and technology necessary to perform tasks such as mining and oil production, efforts must be made to keep investments and capital flow from such projects within the ailing economy.
Evidence of such efforts may be in the near future. In February 2010, Ecuador's President Raffael Correa stated that he, "aims to extend the government's control over the nation's electricity and oil industries...Ecuador is negotiating contracts with oil companies by the end of March that will pay the companies fees based on costs and crude production" (www.bloomberg.com).
This will allow Ecuador to benefit from a rise in oil costs, but will also provide greater control over the country's energy resources, protecting it from exploitation and shortages.
    In addition, an international system which realistically addresses the issue of existing debt in countries who are absolutely incapable of paying, without further sacrifice of the environment and human life, is necessary. Those who are able to pay some, but not all of the debt should do so, and a process for determining the appropriate repayment amounts should be implemented. If these issues were addressed, the only remaining problem would be the appropriation of the remaining debts, which could be addressed by an international organization such as the IMF or World Bank.
Conclusion
In conclusion, the international economic system has grown to tolerate increasing levels of poverty, infractions on human rights, and exploitation of emerging countries. As globalization magnifies this problem, situations such as that in Ecuador will produce domestic problems which will eventually have global economic and political effects.
    Consequences of continuing on in the fashion of old have already been evidenced time, and time again. While markets and conflict are cyclical, conscience effort must be made to ease the burden and reduce the debt or else we will all face the consequences. As John Perkins (2004) argued, "[a]ll of those people – millions in Ecuador, billions around the planet – are potential terrorists. Not because they believe in communism or anarchism or are intrinsically evil, but simply because they are desperate" (p.xxiv).
References
A history of Ecuador, (1997). A history of Ecuador. Retrieved on February 27, 2010 from http://www.ecuadorexplorer.com/html/history.htm
Brook, J., (1994 March 22). Pollution of water tied to oil in Ecuador. New York Times. Retrieved on February 27, 2010 from http://www.nytimes.com/1994/03/22/science/pollution-of-water-tied-to-oil-in-ecuador.html?pagewanted=1
Centro de Derechos Económicos y Sociales, (2006). Upheaval in the backyard: Illegitimate debts and human rights: The case of Ecuador-Norway. Retrieved on February 27, 2010 from http://www.oid-ido.org/article.php3?id_article=382
Discontinuation of dam project, (2007). Discontinuation of dam project in Ecuador. Retrieved on February 27, 2010 from http://www.fian.org/news/press-releases/discontinuation-of-dam-project-in-ecuador-1
Economist (2009). Global debt comparison. Retrieved on February 5, 2010 from http://buttonwood.economist.com/content/gdc.
Ecuador fiscal policies, (1989). In Library of Congress online. Retrieved on February 27, 2010 from http://www.country-data.com/
Faiola, A., (2008, December 18). Calling foreign debt 'immoral,' leader allows Ecuador to default. The Washington Post. Retrieved on February 27, 2010 from http://www.washingtonpost.com/wp-dyn/content/article/2008/12/12/AR2008121204105.html
Ferraro, V., Rosser, M. (1994). Global debt and third world development. Retrieved on February 5, 2010 from http://www.mtholyoke.edu/acad/intrel/globdebt.htm
Jokish, B., (2007). Ecuador: Diversity and migration. Retrieved on February 27, 2010 from http://www.migrationinformation.org/USfocus/display.cfm?ID=575
Jubilee Network, (2008). Ecuador debt timeline and commission findings. Retrieved on February 27, 2010 from http://www.jubileeusa.org/fileadmin/user_upload/Ecuador/Ecuador_debt_fact_sheet.pdf
Kinto, L., (2007). Ecuador: Constituent Assembly to deal with mining conflicts. Retrieved on February 27, 2010 from http://ipsnews.net/news.asp?idnews=39101
Lee, S., (2000). Emerging markets: A primer on Brady Bonds. Retrieved on February 27, 2010 from http://www.people.hbs.edu/besty/projfinportal/SSB%20Brady%20Primer.pdf
Nacpil, L., (2005). From debt to development. Retrieved on February 27, 2010 from http:// www.oidido.org/article.php3?id_article=137&var_recherche=illigetimate+debts
Perkins, J. (2004). Confessions of an economic hit man. Plume: San Francisco.
Romanow, J.T., (2010). To the global village and back: International indigenous rights
and domestic change in Nicaragua and Ecuador. Retrieved on February 27, 2010 from http://qspace.library.queensu.ca/bitstream/1974/5401/1/Romanow_Jacqueline_T_2010_01_PhD.pdf
Romero, M.J., (2007). Ecuador: A new perspective on external debt. Retrieved on February 27, 2010 from http://www.twnside.org.sg/title2/finance/docs/Ecuador-Romero.doc
Small, D., (2008). Ecuador declares partial debt moratorium. Retrieved on February 27, 2010 from http://www.larouchepub.com/eiw/public/2008/2008_50-52/2008_50-52/2008-52/pdf/44-45_3550.pdf
Thinkquest Team, (2006). A dollar a day. Retrieved on February 27, 2010 from http://library.thinkquest.org/05aug/00282/gov_worldbank.htm
Walsh, H., (2010, February 9). Ecuador may develop $6 billion dam project after shortages. Bloomberg. Retrieved on February 27, 2010 from http://www.bloomberg.com/apps/news?pid=20601072&sid=aHf.m4BLJM0c