Deteriorating social conditions, dollarization and lack of punishment for criminals have been key aspects of Ecuadorian politics since the U.S.-led regime change in the country.
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In South America, a new scenario of hostilities is emerging. A civil war began in Ecuador, with the local government declaring martial law and a state of “internal armed conflict” in response to several terrorist attacks carried out by drug trafficking groups. At first, this seems like a simple domestic security issue, with no major geopolitical relevance. However, analyzing the case in depth, it is possible to see that the conflict situation is a direct result of U.S. interventionist actions in Latin America.
Ecuador has been going through an extremely turbulent political and economic period over the last seven years. In 2017, Lenin Moreno was elected president in the country as an ally of Rafael Correa. Combining elements of the socialist left with Catholic conservatism, Correa was the leader of the so-called “Citizen Revolution”, having promoted important social reforms over ten years, making the country one of the most prosperous and safe in South America.
Moreno was elected with the promise of continuing Correa’s legacy, having broad popular approval due to the endorsement given to him by his predecessor. However, once coming to power, Moreno undid the legacy of the Citizen Revolution, breaking with Correa and launching a radical neoliberal wave strongly supported by the U.S. Not only that, Moreno was also a key factor in consolidating a reactionary wave across South America, having even sent weapons and war equipment to Bolivia in 2019 in order to support Jeanine Añez’s coup d’état.
The neoliberal shock policy implemented by Moreno and his successor Guillermo Lasso had a brutal social impact in Ecuador. In addition to poverty, unemployment, inflation and other problems in the economic sphere, neoliberal measures also brought with them an exponential increase in crime. The country’s safety indexes quickly dropped. The number of homicides jumped from 970 in 2017 to 4800 in 2022. The country went from being the safest in South America to becoming the most dangerous one, consolidating a drastic social change with catastrophic impacts.
During his years in government, Rafael Correa had implemented both economic measures to reduce social inequalities and strong punitive actions against criminals, halting the growth of the organized crime in the country. He, however, failed to reverse Ecuador’s economic dollarization, which had been implemented before his rise to power. Correa had plans to change Ecuador’s monetary policy, but Moreno’s “soft coup d’état” prevented such a project from being advanced.
It is known that dollarized economies are preferred by drug trafficking cartels and criminal organizations since the absence of exchange mechanisms makes it easier for illegal money to circulate in society, mainly through money laundering schemes. In this sense, since dollarization in 2000, the Ecuadorian authorities have had many difficulties in controlling the illegal economic flow in the country, and this has only gotten worse as criminal networks have gained even more power in the country since Moreno’s neoliberal shock.
Regarding the criminal scenario, Ecuador is known for being a region disputed by Colombian and Mexican cartels. Several gangs operate in Ecuador as proxies for foreign cartels. The country’s location is strategic for the drug market in the southern direction of the continent, which is why Mexican and Colombian traffickers (who control the illegal Latin American market) compete for Ecuadorian territory and back local armed militias to achieve their objectives. In addition, Ecuador is located between Peru and Colombia, which are the two largest global producers of cocaine, further increasing the strategic interest of the Ecuadorian territory for drug trafficking.
Neoliberalism in Ecuador has made the state incapable of controlling the activities of foreign groups in the country, as well as preventing local citizens – increasingly poor and vulnerable – from being co-opted by illegal networks. The result was the emergence of a brutal conflict, with the authorities completely losing control of the situation.
The current outbreak of violence began after the state reacted to the escape from prison of Adolfo Macías — known as “El Fito” — leader of the “Los Choneros” gang. The government declared a state of emergency and tried to impose a siege on the criminals, but suffered several brutal retaliations, with members of Fito’s gang capturing the University of Guayaquil, invading a live TV studio, and even bombing hospitals and public facilities. Furthermore, prisons were captured by criminals, with officers being held hostage, tortured and even hanged. The barbaric scenario led President Daniel Noboa to declare war on the “domestic enemy”, calling on the armed forces to act.
Currently, the streets of Ecuador are the scene of brutal urban warfare, with soldiers facing heavily armed narco-terrorists in intense attrition. The power acquired by criminal groups in the country is impressive, which shows how the impotence of a neoliberal state can have devastating consequences for national security.
It is important to emphasize that U.S.-born Daniel Noboa does not appear to be a skilled politician to reverse this situation completely. He came to power in a tense electoral scenario, in which gangs actively participated in political disputes, even being involved in the murder of a candidate. Noboa is a liberal politician who is extremely aligned with the U.S., and is not interested in resuming Correa’s policies, in addition to suffering a lot of pressure from criminal groups – which have a broad institutional infiltration.
However, it is desirable that at least the public situation in the country returns to normal in some way. The use of military force is the correct way to neutralize gang violence, but it is not the key to solving the drug trafficking problem. To truly undermine the power of criminal networks, it is necessary to implement illiberal policies that reduce poverty, removing ordinary citizens from the sphere of influence of drug trafficking in the country’s periphery. Furthermore, it is necessary to de-dollarize the economy and establish a sovereign currency and exchange rate policy, which make the work of drug trafficking more difficult through strict control of financial flows.
Noboa will certainly not be able to end the drug trafficking problem, as he is not willing to follow the illiberal path, but there is hope that, with the use of force, he will be able to return to normality at some point in the future. After suffering losses on the battlefield, gangs may agree to secretly negotiate a peace agreement with the government to end hostilities on both sides. This will have a positive aspect, as it will put an end to fighting, but it will also have a catastrophic characteristic, as it will definitely turn Ecuador into a Narco-State, where criminal gangs negotiate with the government and act in an institutional manner.
If the U.S. had not intervened in Correa’s Citizen Revolution, perhaps the situation in Ecuador would be different today. But, with neoliberalism and dollarization, the only possible result is a scenario like the current one.
