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Still Not Much Hope in Ecuador

January 23, 2000

QUITO, Ecuador (AP) _ Political tempests like the bloodless, oddball coup that overthrew President Jamil Mahuad only to see his vice president take over neither faze Ecuadoreans nor give them much hope.

People are accustomed to tumultuous leadership changes that have done nothing to halt Ecuador’s precipitous economic slide. The nation is suffering its worst depression since the 1930s, and more than half its 12 million people live in poverty.

Thus, the naming of Vice President Gustavo Noboa as Ecuador’s sixth president in five years _ he was constitutionally next in line_ was greeted Sunday with great skepticism.

Ecuador is the sick man of South America and only bold leadership and well-conceived policy, as absent recently as mismanagement and corruption have been prevalent, can reverse the country’s fortunes.

So far, there is little confidence Noboa can accomplish that.

``Nothing happened at all and the corrupt are still in charge. Now we’re even worse off,″ said Soyla Laiza, a 50-year-old street vendor at Ipiales market just up the street from Quito’s presidential palace.

``Everyone, everyone is poor,″ said Laiza, who sells music CDs. Like many Ecuadoreans, she isn’t sure from day to day whether she’ll earn enough to feed her two children.

Few people made purchases at the market. Most simply strolled idly, ignoring vendors like the wizened Indian woman sitting on a curb staring vacantly ahead, colorful plastic-handled strainers in her hands.

Ecuadoreans have seen their purchasing power plummet by more than 300 percent in the past year.

The country has $13 billion in foreign debt _ and after defaulting on interest payments last year, prospects for getting more loans are dim. When the nation’s currency, the sucre, lost 30 percent of its value in early January, negotiations with the International Monetary fund on securing new credit collapsed.

Noboa, an untainted 62-year-old former university president with little political experience, said on his first full day in office Sunday that he would attack corruption, a key source of Ecuador’s ills.

But the seven ministers he named Sunday _ half the Cabinet _ were all from the discredited traditional political class.

The social discontent that exploded Friday when disgruntled junior military officers joined Indian protesters in seizing the Congress, Supreme Court and presidential palace, still looms large.

``The ruling class has destroyed the country,″ said Rigoberto Villareal, a 34-year-old taxi driver. ``We’ve got to kill the entire political class and begin anew.″

Columnist Simon Espinosa of the newspaper Hoy saw ``some faint hope″ Noboa might improve things. ``The problems are the same, but the new president’s advantage is that he’s seen as honest,″ he said in an interview.

Ecuador never recovered from devastating El Nino flooding and depressed prices in 1998 of oil, its major export. Rather than impose economic austerity to diminish a huge deficit, the government simply printed more money.

Corruption remains a way of life in Ecuador, where politics has traditionally been a vehicle for personal enrichment.

Mahuad was widely condemned for bailing out 18 failed banks last year at a cost of $1.2 billion after the bankers stole the funds and fled abroad.

In what many considered a last-ditch rescue attempt, Mahuad announced Jan. 9 that Ecuador would abandon the sucre and become the first South American nation to embrace the dollar.

Noboa vows to proceed with the plan.

But some fear the medicine could be more dangerous than the disease.

The 5,000 Indians who marched on the capital last week demanding Mahaud’s ouster worried the plan would wipe out the sucre-based savings of many Ecuadoreans.

The government already froze bank deposits in March and doesn’t plan to free them for at least five years.

The sucre has plunged from 7,000 to 25,000 per dollar over the past year and inflation, which rose 60 percent last year, has soared 53 percent since November, economist Walter Spurrier said.

Noboa’s immediate challenge will be to restore people’s purchasing power.

One insurgent military officer, interviewed at the presidential palace during Friday’s short-lived coup, said his salary in dollar terms dropped in one year from as much as $1,000 a month to $160.

``The country is in ruins,″ said the officer, speaking on condition of anonymity for fear of retribution. ``We can’t go on living like this.″

Noboa made no policy announcements Sunday, but his interior minister said the estimated 150 officers who mounted the aborted coup would face military justice.

That could well mean a slap on the wrist _ and the possibility they could one day rise again.

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