Stratfor.com's Global Intelligence Update - 24 October 2000 _________________________________________________ We knew it before it was news. Also on Stratfor.com With violence in Israel escalating and Palestinian leader Yasser Arafat refusing to rein in violent factions of his ruling Fatah party, Israeli Prime Minister Ehud Barak has now taken the hardline and intensified efforts to form a national emergency unity government. http://www.stratfor.com/hotspots/israel_palestine/default.htm _________________________________________________ Ecuador: Seeking the Benefits of a Plan Colombia Summary Ecuador is first in line to suffer the likely consequences of the U.S.-financed military offensive against drug traffickers in southern Colombia. The United States has offered Ecuador $20 million to manage the spillover, but President Gustavo Noboa wants much more. In fact, Noboa wants a Plan Colombia for Ecuador. If the U.S. government ignores demands for a much bigger commitment to Ecuador, the Noboa government may reconsider its tenuous support for Plan Colombia, including the use of Ecuador's Pacific Coast by U.S. anti-drug aircraft. Analysis The United States allotted Ecuador $20 million of the $1.3 billion U.S. aid package for Colombia's coming military offensive against drug traffickers, including $12 million in counter-narcotics aid and $8 million for development projects along the border with Colombia. However, President Gustavo Noboa wants much more. For starters, he wants between $250 million and $300 million for military material, including helicopters and river-patrol boats. Ecuadorian Foreign Minister Heinz Moeller outlined Noboa's proposal Oct. 19 in Washington, D.C. at meetings with officials of the State Department, National Security Council and Agency for International Development. Noboa also wants large-scale U.S. funding for economic development in northern Ecuador. In effect, he wants Washington to underwrite a Plan Colombia for Ecuador, including economic development assistance and military aid to keep the coca trade out of Ecuador. Washington will balk, but Noboa has a compelling argument: Ecuador's soils are suitable for cultivating coca and opium poppy, and its impoverished northern region is fertile ground for a drug- fueled insurgency. __________________________________________________________________ For more on Latin America, see: http://www.stratfor.com/latinamerica/default.htm _____________________________________________________________ Ecuador is an important trans-shipment route for Colombian and Peruvian cocaine, but was bypassed in the 1990s when coca cultivation shifted to Colombia from Peru and Bolivia. However, the Noboa government fears the anti-drug military offensive in southern Colombia will push the drug trade and violence into northern Ecuador, where the inhabitants are largely members of nationalist indigenous groups who oppose the government's adoption of the U.S. dollar and privatization of state enterprises. Noboa was vice president last January when a military coup that removed President Jamil Mahuad triggered a mass national protest by Ecuador's Quechua Indians. The United States and other countries condemned the coup, but a large majority of Ecuador's citizens supported the armed forces. Noboa is Ecuador's seventh president in four years. His government's stability depends on the continued support of the military and indigenous groups united under the Confederation of Indigenous Nationalities of Ecuador (CONAIE). To keep that support, however, Noboa has to produce results, starting with economic growth, infrastructure and better living standards for Ecuador's 12.4 million people, the majority of whom are poor Indians. High oil prices and adopting the U.S. dollar as Ecuador's national currency have stabilized the economy and defused political tensions. Inflation is under control at last, and oil will account for about 45 percent of Ecuador's export earnings this year, compared with about 20 percent in 1999. However, the crisis in Ecuador is far from over. Right now Noboa has some breathing room, but oil prices will fall eventually, and the risk of renewed political unrest is high. According to Augusto de la Torre, director of the World Bank's office in Ecuador, adopting the U.S. dollar has made Ecuador's economic system more corrupt, more politicized. ________________________________________________________ The military supports Noboa's endorsement of Plan Colombia and the use of Ecuador by U.S. anti-drug aircraft, but the country's indigenous leaders do not. If the drug trade and violence spill into northern Ecuador from Colombia, the spreading conflict could spark more mass protests by Ecuador's Indians. In January's protests, junior- and mid-level officers joined the Quechua protesters who toppled Mahuad. To reduce the risk of his ouster under similar circumstances, Noboa has to keep the military and indigenous groups happy. Meanwhile, the spillover has already started in northern Ecuador. In the past month, hundreds of Colombians fled into Ecuador to escape fierce clashes in Putumayo between FARC and AUC paramilitary forces. Last week, 10 foreign oil workers were kidnapped, and Ecuadorian officials say AUC forces are now operating in Ecuador's Sucumbios province. Noboa believes Ecuador is entitled to more aid from the U.S. government. After all, Noboa allowed the United States to fly anti- drug missions out of the Pacific coast base of Manta, and Ecuador is the country at greatest risk to spillover in the region. If Washington rejects Quito's requests for significantly increased aid, the Noboa government may join Brazil and Venezuela in opposing the United States in Colombia. _______________________________________________ (c) 2000 Stratfor, Inc. _______________________________________________ SUBSCRIBE to the free, daily Global Intelligence Update. 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