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Time is at a standstill Once upon October 30th, 2001, the Modelo Stadium in Guayaquil was filled and the voices of thousands of high school and college students chanted “NO MORE CORRUPTION”. This event was the beginning of a campaign of the same name. Among those present was not only Guayaquil; there were delegations representing all the country’s provinces and those who couldn’t come, sent their representative. Emphasis was placed on the core (Ethics, Justice and Equity); in that same sporting arena an oath was made: “NO MORE CORRUPTION” committed by a DECALOGUE to devote their best efforts to eradicate corruption. The Decalogue said: DECALOGUE AGAINST CORRUPTION 1. Truth above all 2. Respect other’s material and intellectual Property 3. Study, Train and Work Effectively 4. Proceed with Ethics, Justice and Equity 5. Respect the Law and Human Rights 6. Don’t give or receive bribes 7. Pay taxes timely and fully. 8. Set examples of honesty and transparency 9. Meet commitments and keep one’s word 10. Honest management of Public and Private Property Those young people at that time were 12, 14, 16 and 18 years old; now many of them are 21, 23 and 27 years old and still talking about it. That’s why we have to remember history, not to go back but to design our future and not make the same mistakes. When analyzing, we see that in 2001 this problem was already complex, now far from having improved or resolved, it’s worse? Doesn’t it seem that once again we’ll fall into a trap by making a referendum in which they want to mix people’s lives with the bull’s lives, wanting to put both at the same level of importance as if our lives were worth the same as that of the bulls (not saying citizens because we are far from it)? Times we live are so difficult that when analyzing the Decalogue, we have precisely gone the opposite way, by not telling the truth; not respecting private property; nor proceeding with Ethics, Justice and Equity; no respect to Law and Human Rights; there isn’t transparency; the country doesn’t meet the commitments and worse with promises, etc. etc. etc…. Why is it that we keep talking about “corruption of political parties”; “what is not” when everybody should be part of “do and solve”. We should try to see the forest and not the half of a leaf, leaving our plots as we believe in “it will never happen to me”. If we don’t apply this strategy we’ll stop being people turning into slaves; turning from Ecuadorians into a Venezuelan-Cuban colony. We demand retaking the autonomies which we obtained in January 2000 also by referendum with a majority vote for it (97%) and rather make a new referendum to that based on the Autonomous, reestablish the country and so design our own future and that this time the DECALOGUE AGAINST CORRUPTION be the country’s axes to start the XXI century with opportunities and be able to wish you A Happy 2011 Ing. Joyce Higgins de Ginatta


Guayaquil, December 2010

Why did we win the parliamentary elections in Venezuela on September 26? Dr. Williams Dávila (.)

The reasons for the victory th

The elections of past September 26 in Venezuela are the beginning of the end of the neototalitarian stage we live in our country. Why? For parliamentary elections, in fact, became a presidential referendum which president Chávez himself considered these crucial elections for the consolidation of the XXI Century Socialism and essential to defeat the counterrevolution which could not regain political public spaces such as the legislature. The Chavista strategy of linking the future of the Commander in Chief of the Revolution with the parliamentary elections generated a wave of discontent because people felt that only the interest on the concentration of power in his hands and the perpetuation of such power was President’s Chavez only goal. The parliamentary elections far from implying a change in the search, in any case, of a democratic socialism, meant to Lt. Col. (retired) Hugo Chávez, President of the country, just a simple scenario to continue advancing in his reactionary, passive and submissive project and never a change for the country to be channeled to a way of separation of powers, including an independent and autonomous Legislative Power, and especially in favor of the decentralization law enshrined in the Constitution. The National Country understood the need for unity on all fronts and for that reason there were launched bridges to link the Political Country and the National Country in one area of struggle and political, economic and social developed work. Precisely after the experience of the regional elections of November 2008, the political parties understand the need to convene a new paradigm to all sectors to form a political platform, efficient and coordinated through social spaces in national and local networks for the purpose of deepening social struggle from the roots to the highest levels of national country. th

The growing and systematic radicalization after President Chavez’s September 26 , strongly encouraged in the old Marxist-Leninist, Maoist and Castro´s ways, has lead him to confusing theories and doctrines to achieve a Venezuelan symbolism that cover the ideals of the heroes of our Latin American nationality and dilute them with the remains of the ghosts of totalitarianism defeated in XXI Century. The truth is that this ideological mixture has been turned into a constant and systematic ideological violation of civil, political social, economic and cultural development in Venezuela. More than 2.000 violations of property rights, political prisoners, elected members who are denied the immunity and are kept in house arrest or in the Ramo Verde military prison; or there are threatened to follow trials to other parliamentarians; there are confiscations and expropriations of companies in full production and not even contemplate the payment of liquidated damages in the 2011 budget. There are violations towards worker’s and retired people’s rights, persecution of governors and mayors elected by the people as well as the violation of the decentralization as an estate policy to replace the Federal and State Decentralization for a Community State following the


Cuban model of the Commander in Chief into Town-Commander; mediocrity people economically and politically controlled by the nomenclature of Miraflores. We have to be clear about the fact that the model of XXI Century Socialism is framed within the context of a centralized state under the People’s conception that the contradictions in Venezuela are between people and their enemies, following the Maoism phraseology, therefore, are antagonistic contradictions and have to be strongly faced because the “enemies” must be eliminated. In contrast, the non antagonistic contradictions, those occurring between the people and the national bourgeoisie can be addressed peacefully, or those between the people and the mafia’s intellectuals with unity-criticism-unity will, can solve everything. The point is that for Chavez’s regime, the democrats, those who believe in freedom, private property and social justice, the free enterprise with sense and social responsibility, fall into antagonist contradictions. And the drug dealers, terrorists, corrupt, outmoded Marxists, fascist fundamentalists and segregationists can be reeducated by the formula unity-criticism-unity. The trend is towards a democratic popular dictatorship. This means that among the people, democracy is exercised; that all the people who enjoy the civil rights united around the working class, rural people and the socialist communes, exercised through the PSUV the dictatorship concerning to the classes and civil society which are qualified as reactionary against those who oppose the socialist-Marxist and act democratically against the building of the mentioned socialism. Of course Chavez’s regime boasts of an alleged democratic and electoral freedom. What happens is that according to the Chavista conception, that freedom is practiced by a direction, and that electoral democracy is a democracy guided by centralism. For the regime, there are only concrete freedom and democracy and there isn’t abstract freedom and democracy. For them democracy is part of a superstructure that belongs to the political category. Which means that democracy at the end, serves the economic base and so does freedom. Democracy and freedom are relative and not absolute; they have emerged and developed in the course of history and for Chavez’s regime within the “people”. Democracy presupposes centralization and freedom, discipline. That so antagonistic contradiction! Just by eliminating the consensus iuris, the possibility for dialogue gets to an end and for that reason the regime ignores the popular sovereignty expressed the past September 26, which defeated President Chavez with a majority vote in a plebiscite called for that purpose. We won the parliamentary elections in popular votes and also in the polling station, but the majority of the National Country members aren’t reflected because the regime structured the electoral system reducing the number of candidates per list in states where more members elected by list came out. And moreover, they divided circuits into several sub circuits where the opposition was a simple majority in the New National Assembly, that started with the rupture of the colonial link declared in 1811 and with the historical basis that in the final formulation of the liberal National Project, there were combined the effective abolition of colonial absolutism in a selective and gradual way and the resumption as the dominant political orientation, principles and values enshrined in the Congresses of the Republic of Colombia between 1821 and1827, aimed at creating the conditions for the formation of the Republican capitalist society internally and its articulation with the global capitalist system on the outside, which was at the time in formation. The above mentioned opens the channel to the liberal democratic National Project formed in function of the Constitution of 1947, th on October 18 , 1945, headed by the first liberal democratic Republic with Romulo Betancourt as the President; and those who are anchored in the world of the Iron Curtain and prefer imposing a Socialist-Marxist outdated and old-fashioned regime and out of step with the aspirations of the Venezuelan people. Historic and democratic consciousness of our country is rooted in the marrow of our society. The old ghosts of the defeated totalitarianism of the XX century have paid their price for imposing in our society, because in our country there is a society integrated without discrimination of age, sex,


religion or political ideology that saw in democracy a chance of succeeding and began its apprenticeship in freedom through the exercise of democracy. The regime ignored the earthly reality of people tired of so much demagoguery and inefficiency. More than a trillion dollars embezzled by oil income concept that doesn’t result into people’s work, had to have its negative impact on the aspirations of the ruling parties candidates in the elections of September 26. More than 65 thousand million dollars, directly managed by President Chavez, without any institution’s control; resource from the difference between the estimated price of oil to elaborate the national budget and the market’s real oil price, spent without social control, without scrutinizing the national assembly; just to give it away in the geo political chavista way to Cuba, Bolivia, Ecuador, FARC, ENL among other irregular groups. None of the resources above mentioned, were for the Venezuelan which had to be done according to the Law of Special Assignments. Unity After the 2008 elections (Governors, Mayors and Regional Members) the opposition consolidates the Unidad en La Mesa de la Unidad Democratica (MUD); agreement was reached to go together in the parliamentary elections of September 26. In those Estates that by political party would have been first in the 2008 elections, he presided the list and therefore got the positions, including in the nominal circuits. Specifically in my State, (Merida) the Democratic Action party, social democrats, is the first State’s party and I was the one to chair the list for deputy to the AN; the rest of the political organizations had their respective seats, as the case of the Libertador-Santos Marquina nominal circuit which corresponded to the UNT party winning the respective candidate. We won because we had a house to house work, a ground campaign as experts say, using computer networks technology, sending electors weekly around 50.000 text messages around the State and especially with a center-left speech emphasizing on the electorate’s basic problems, such as: insecurity, unemployment, and lack of housing, income insecurity and at the same time creating hope. What hope are we talking about? Being a representative where the problem arises? Make the electorates feel that we visit them not because we want their vote but to make sure that we´ll be there listening and helping them when needed. Let’s not forget that the chavista populism (in another time we could analyze this aspect) has focused on an easy speech that corrodes the value of work, taking away from somebody who has and give it to another one who hasn’t got. Redeemer is the speech that does justice to crime because it’s the product of the exploitation suffered by the poor by the exploiting class that controls the bourgeois estate. Unity has turned into a strategic value that gave security in the victory. It’s the case of the Andean Estates former Chavez’s bastion; nowadays we have the State of Táchira provincial governments and for the Estate of Mérida, Chavez is beaten in the parliamentary elections because the oppositions list, achieved 51%, while the ruling party’s list won with 47%. It’s worth highlighting the fact that President Chavez went to Mérida three days before election day, stood two days and then, started disqualifying, threatening them and yet we won in the State. This fact reinforces the approach we have argued from the outset of this work, in which the president is defeated on September 26 because he’s the one directly involved in the electoral campaign of the candidates of the ruling party The candidates of the ruling party didn’t present proposals; they only repeated the presidential speech saying that the parliament was there to build the Socialist State. That their compromise was with the Revolution, with Fidel Castro´s, Che Guevara’s Ho Chi Min´s, Marx´s thoughts but no commitment to democracy, decentralization and freedom. That speech lead them to a defeat in my State, because eleven years of a chavista government haven’t done anything more than deepen poverty, delinquency, dengue fever, homelessness, the collapse of agricultural production, drug trafficking, etc.


Our speech was centered on the everyday problems and the hope to build a different state within the context of the moral reconstruction of the country. We emphasized the need to building a self-sustaining regional economy to make from tourism and knowledge the axes to develop other social and economic status and a new interdisciplinary paradigm in a state with agricultural, tourist and scientific vocation and based on the human being as the center of all policies and strategies for the Estates progress. Perspective The people gave us the victory because they believed in the speech and proposals made to the Popular Centralist Estates; a National Assembly that would encourage the debate and reconciliation taking the Constitution as base of values and principles. It’s true that the ruling party created a “bubble election” to get a simple majority in the National Assembly, and it isn’t less true that we, in the opposition have political awareness and maturity to understand that only acting as a single fraction the opposition can strengthen our positions to move towards public opinion making proposals knowing that the ruling party would denial just to oppose. There the network strength plus the base of work will make it possible to defeat in people’s spirits and souls, the sectarianism and ideological fundamentalism of an historically viable political project whose head is Hugo Chávez. Near victories will be coming ahead for the Venezuelan democrats. Next elections will be won by us with Unitarian candidates chosen through primary elections. The Presidential radicalism, product of a state of hallucination, caused by fear of losing power and all the links that senior regime officials have with drug trafficking, as has come to public through the Makled García case and the links with Ahmadinejad so that Iran can manufacture the atomic weapons they need which necessarily lead to feel that he might lose the 2012 elections. There are people that love, struggle and hope and are historically aware of what is going on, because they feel that anything that is product of their effort and work is worth today. That poor people who accuses the regime’s neglect to develop a policy of prevention, management and mitigation of natural hazards and disasters and that today see as their homes disappeared or their relatives killed in floods, have hope in the new political project that will dignify our country and that means to show the oil is used as a political weapon rather than a purchasing and awareness policy. It’s the ultimate natural resource we have, to build a modern country as part of the great Latin American fatherland, which is major factor in the fight against poverty, injustice and gender inequalities of all kinds. (.) Secretary of the Interior (1986). Mérida’s Governor (1984-1986-1995-2000). University Professor, Vice-president of Continental Bank, Senator of the Republic (1993-1995). Master of Law, Columbia Law School UCV, and Member currently elected to the National Assembly by the State of Mérida-Venezuela.


Application of the Constitutional Rights in the relationship between Legal Entity and Natural persons in Private Law Dr. Jorge Zavala Egas Professor at Graduate Catholic and Espiritu Santo Universities Of Guayaquil Our constitutional system recognizes that the constitutional rights are sources of duties and obligations between individuals. In the current Ecuadorian Constitution (EC) the issue is very clear: Article 84 determines the effect of irradiation of fundamental rights from the perspective of its immediacy, i.e., the indirect effect. We don´t say, it’s worth clarifying, that it only foresees this one. Prescribes, the rule contained in Article 84 that all law and other regulations, as well as acts of government power, including the constituent power, must comply in form and in content (physically) “with the rights under the Constitution and International treaties and those that are necessary to ensure the dignity of human beings or of communities, people and nationalities. In no case, the reform of the Constitution, the laws, other legal regulations, or acts of public power shall prejudice the rights recognized in the Constitution.” Therefore, the rules governing private law are included in the Constitution. As for the action of protection (Article 88 EC) states in a timely manner, that it’s sustained, “when the violation comes from a private person if the violation of right causes serious injury, if public services are provided in an improper way, if it acts by delegation or grant, or if the affected person is in a state of subordination, helplessness or discrimination”, rule that complements that contained in Article 426 EC, that regulates linking of the Constitution to “All people, authorities and institutions”. This is, without a doubt, the recognition of the direct effects of fundamental rights in the legal relation between individuals, even if in the above cases, that is, in a specified way. It’s the Law of Jurisdictional Guarantees and Constitutional Control (LOGIC) and the one that develops this rule in cases when the driven source is an individual (Article 41.4 and 5). So does the extraordinary action of protection that is institutionalized in our Constitution against judicial acts (judgment, final orders or resolutions) “in which rights were violated by action or omission under the Constitution” (Articles 94 and 437 EC) also developed by the LOGYC in articles 58-64 which comprise Chapter VIII of Title II Suffice is to say for now, that it’s the way to control the judicial application of Private Law (in addition to any Standard of Law rule) between individuals, when judges in the exercise of their powers to provide protection, have failed considering or interpreting substance of the constitutional rules that adapting to the expedition of their judicial orders. There are two rules in Article 83 of the EC that reinforce the direct effect of the constitutional rights between the private: number 1, prescribed by the duty and responsibility of all individuals “To accept and follow the Constitution, the law and the legitimate decisions of competent authority” and number 5: “Respect human rights and fight for their compliance”. In conclusion, the EC and its rules-principles of the constitutional rights, directly affect the privatelegal world through the following ways:


1. Entailment of the legislature to the rights in their work of regulation of private relations (Article 84, Article 11.4 and 11.9 EC). 2. The rules-principles of constitutional rights has a derogatory effect of the earlier rules of a Private Law that are contrary to those, for example, containing a concept of public order against the rights in its current conception. 3. Determining the cancelation, previous the corresponding action of the contracts according to the same criteria above mentioned, are contrary to the constitutional rights and have come out with instruments of unlawful object, because the contractual interpretation criterion requires the need to adjust the interpretative task of legal rules to the social reality of time that must be applied. 4. The effect of irradiation of constitutional rights on any kind of private legal relations, including those not subject to contract, to be set up and generate effects consistent with enshrined (substance) in the rules of constitutional rights.

This is a topic that in its complexities is explainable under study in Germany, Spain, Portugal, Ireland, Italy, Belgium, Austria, Sweden, Japan and currently being discussed in South Africa. Among the South American countries we have Colombia, Ecuador, Peru and Costa Rica, in which order is explicit recognition of the effectiveness of the constitutional rights between private. 1. In our country, the Constitutional Court in its Judgment No.002-09.SAN-CC. R.O. (s) No. 566 of 8VI-2009, has already declared on some aspect of the irradiation of rights. For example, when it said: “Contrary to the above, Article 1 of the Constitution of the Republic (2008) provides a new way or model of state, profoundly different from the one described in the Political Constitution of 1998. Ecuador is a Constitutional Estate of Rights and Justice. Thus, Ecuador has adopted the formula of the paradigm of the Constitutional State, which involves, among other things, the submission of any authority, function, law or act to the Republic’s Constitution. Neo constitutionalism intended then refines the rule of law by subjecting all power (including legislative and executive) to the Constitution and an appeal to the Constitutional and not by the law; i.e. placing the constitutional jurisdiction and ultimately as a guarantor of any material to evaluate and decide legal vicissitudes of a new political, economic and social reality of the Constitutional Estate development. Among the characteristic symbols, the following can be identified: A). the existence of a rigid constitution, consequently, isn’t easy to be changed by ordinary legislation; B). Legal guarantees to allow controlling the approval of laws with the Constitution. C).Constitution’s binding force which involves the consideration of the text as a declaratory body acceptance standard of its real character of legal rule and effective judicial application. D). Extensive interpretation of the constitutional text which is verified in presence of its principles and rules, especially the legal system, making it possible through them, to find solutions of legal simpler problems. E). Direct application of the Constitution to solve not only the conflicts between estate powers or between the previous and people, but also to solve the conflicts among individuals. In our opinion, there isn’t any doubt that our Constitution recognizes direct efficiency of the fundamental rights in the relations between individuals, with all that it entails and between the mentioned and these contracts under Civil Law, commercial or employment, that must respect the


rights of equality and freedom as well as business statutes and decisions the shareholders should do. In conclusion, the Constitution is not only due to the relationship between people and state, but in the various manifestations of individuals with others. 1 See Alexei ESTRADA, Ob, Cit, Note 4 page 269 Do Development and Democracy go together? Dr. Pablo Lucio Paredes Economic Analyst It’s a very complex issue that may require some explanation for the expressions to be understood. It’s also a difficult task for the diverse possible interpretations. I`ll take the most sensible under my vision. Development: It’s the best way which a group of people choose for their complete satisfaction in base of individual and collective actions, but always respecting the individual as the axis of this society. Democracy: “Is a political system through which a community gives a group of people some of their prerogatives and powers (to be exerted in certain actions), but they organize them in such a way to hold in their hands the ability to control, evaluate and change those people”. That combination (with all the failures inherent to human nature) is the only one allowing a material development and healthy spirit based on people’s respect. Or maybe it would be useful noting what I believe these two expressions aren’t. Development isn’t a society’s vision or path imposed from power, by those who think knowing what people need. Democracy isn`t the system whereby power is delivered to a group of people to exercise that power based on the majority’s strength of the vote or simple application in the various spheres of life and their way of seeing it. If development and democracy are understood under these two interpretations, you easily fall into authoritarianism, the dictatorial democracy (even worse) in communism and other forms of collectivism that may temporarily have some apparent success, but then, in a unavoidable way, fall into a material and spiritual failure and people’s disrespect. What are their bases and why is the initially positive designated combination between development and democracy so successful? 1. Because it doesn`t start from a preconceived conception of development, but allows individuals and organizations, to sort of build. 2. Because it allows people building the organizations and institutions that best fit (with human failings) to that path that they build. It’s about the family, the neighborhood, the city, the business, parent’s organization, the Estate itself and so many other ways of organizations. 3. Because it’s not at all a selfish vision of society; it’s not that every person is locked in their own corner seeing only their interests, but each one is contributing to the individual and collective resolution of this society’s problems to achieve the desired objectives, in the best way. Parts of those collective problems are everybody’s integration, the equality of opportunities and solidarity. To put the words “always respecting the individual as the axis of that society” it isn’t the beginning of that selfish vision, but argues that the construction


and the “evaluation” of that society, only individuals themselves can do the build, and not someone from outside, from the elite or from any privileged group deciding for them. It’s a very complex topic because by definition, we live in collectivity; by definition there are groups of power and we must inevitable make group value judgments in certain circumstances, but we must maintain the principle that the vision of society should be directed to the individual`s primacy, because otherwise we open the door to harmful collectivism. 4. Because only a society with those characteristics has the capacity of doing what human beings do best, this is: to progress, improve and create. Besides of what I already highlighted because its importance, which is: solving individual and collective problems. 5. In particular there is mistaken belief that technology is independent of economic and political system, which is neutral and can create and use different states of orientation. Evidently it isn’t. Technology develops only in environments in which there is freedom to think, undertake and where we can find incentives to turn good ideas into products serving others. The Soviet Union was able launching people to the space, which depended only of a centralized decision but could never turn the previous into products to increase the life standard of its inhabitants. For example, as Jagdish Baghwati noted in “India or China?”: “The authoritarian regime of China, means it cannot take advantage of innovations that depend on software, because it’s an instrument through which dissidents can thrive. As somebody noted: The PC (personal computer) and the communist party (PC) cannot go together.

Development is the result of a process of human creation based in freedom and decentralization (this is, in which people and their nearest organizations are the axis of development) and this requires a political system of similar characteristics. To think that centralized and authoritarian systems could be able achieving this objective is a fatal error. It works for a time while as development axis quantitatively mobilization (whether human, physical or financial) but it fails when moving to the next step in which the capacity of creating becomes essential, this is, when moving from quantity to quality. That is, when shown the real constraints and there is the difference between those moving and those left behind. That’s why so serious-mindedness in which is attempted from the summit to decide what and how it occurs, what to study and which profession to be chosen and what kind of information can people process. Democracy and development die when some believe knowing more than everybody.


Address by Dr. Guillermo Chang to Uruguay’s President Dr. Jose Mujica on a visit to Guayaquil on November 16, 2010. Dr. Guillermo Chang, Guayaquil Vice Mayor

The Republic of Uruguay for Latin Americans is an example of a country with strong institutions that have given vital support to democracy. Among Spanish-speaking people it’s the country which holds the highest cultural level. When we think of Uruguay as a country, we are reminded of the libertarian spirit of the national hero José Artigas, the patriotism of the great statesman Jose Batle y Ordoñez, the presence of the young master Jose Enrique Rodo, and the universal validity of this great writer Mario Benedetti The man to whom this afternoon the city of Guayaquil honors was born seventy-six years ago in a suburb of Montevideo. When he was eight years old he lost his father and a courageous woman of great fortitude and a strong fighting spirit, Doña Lucia Cordano took care of him. In a farm or ranch Dona Lucia and Jose faced poverty with dignity. They cultivated land, raised poultry and a few cattle. White cartridge or creeks on the farm crops were sold by Jose in Montevideo flower shops for flower arrangements. Unlike the traditional Latin American politicians, Jose Mujica did not reach the level of a college education. From early youth he learned the development meetings with members of union workers in the meat area. With them he learned the value of class solidarity. When Uruguay suffered the weight of a large foreign debt, the continuing devaluation and the pernicious effect of persistent inflation, teenager Jose Mujica made contact with other young people who sensed the strong presence of social defeat and the imminence of a putsch that would defeat the country's institutions. It is at this time of social turbulence that Jose Mujica joins the Tupamaro insurgency movement, aiming to reach their struggle to achieve equality between men. The rebel movement initially was not offensive; it was rather a group with a defensive attitude that sought what Jose Mujica had always claimed: the need to create, not a new man, but at least a better man. Jose Mujica, the rebel freedom fighter, was arrested for thirteen years and suffered the harshness of prison, knew the effects of isolation and the burden of loneliness. He was psychological beaten and tried to overcome through reading books on biology, farming, literature and history. On regaining his freedom Jose Mujica said:


"The differences are good, they help to choose paths. Passion does not justify the misery of the soul. We were born to fight for equality and for the dream of a man, if not a new one, but indeed for something better". “I do not go through the path of hatred not even toward those who had meanness against us; hate does not build”, he added. Mujica expressed little enthusiasm for the many people’s claim to do justice against those accused of state terrorism exercised during the dictatorship, and said: “Justice has a stench of revenge of the mother that bore”. Therefore, according to Jose Mujica, it is necessary “to have an open, not sectarian, non-dogmatic attitude, a learning attitude, a way of being with all those who think fairly similar. We must enlarge more the people’s ranks, we must fight hard for enlarging those rows, and one must have the wisdom not asking people what people cannot give ". Jose Mujica said: "Our two old traditional parties are not even remotely anything to deserve contempt, because if we do, we are unaware of the country’s essence; And it's good that men from the left start setting foot on earth, to rethink the nation's history and then re-make our own schemes”. “Revolution is democracy and science”. “Revolution is primarily work and more work”. "I first call the inmates to responsibility. Then I stress, not to hate". When the people of Uruguay in national plebiscite decided to declare the expiration of criminal prosecutions against the military that in the exercise of power had committed irregularities, Jose Mujica had the spiritual greatness and fortitude to proclaim publicly that, after long years of painful captivity he wasn’t seeking for revenge, or wanted to guide his actions under the rule of hatred. “Hatred builds nothing” he added. JM In his public life was called “El Pepe” by his countrymen managing to win democratically at the ballot box, the Deputy parliamentary representation. He later was appointed as Senator of the Republic. In both cases, the Frente Amplio was composed of thirty-four political movements of various ideologies. However, with deep analysis of the situation in Uruguay, he did recognize that the Uruguayan people politically speaking are center, neither left nor right. Therefore, sustained Mujica, it was necessary for the Frente Amplio to get closer to the center without denying his left position. With great pragmatism he argued that if the majority of the people of Uruguay belong to the center, it would be foolish to try to impose an exclusive left politic outside of what the vast majority of people wanted. A year ago, exactly in November 2009, in free elections Jose Mujca was appointed President of República Oriental del Uruguay. Months before this folksy, spontaneous and full of candor man, said publicly to the media that he was a simple farmer, an old man and a citizen without university preparation that could not reach that high dignity. It was his open and direct language that allowed him to communicating with people and be worthy of trust and credibility. This Uruguayan citizen, nature lover, that dresses and fits like a peasant, a land farmer, who doesn’t use jacket or tie (today is an exception) says what he means and means what he says, is the one shown in his time as Minister of Livestock, Agriculture and Fisheries at the Government of


President Tabaré Vasquez, as a man respectful of economic laws, not imposing administrative or political price for staple food products, and agrees with the various corporate beef producers bodies, with friendly prices in defense of the popular economy and, likewise, have had the integrity to convincing consumers of the weakest sectors in the need to raising prices of daily consumption agricultural products such as vegetables, against the increase of worker’s wages whose labor is intensively used in the process of producing them. In his country, “el Pepe”, “el Labrador”, “el Viejo”, is respected by all social sectors. His attachment to wisdom and commitment to a philosophy of life makes him proclaim the contempt and rejection to waste and consumerism. He wishes a society in which men are considered equal, but different in preparation and effort. A society to achieve progress must have a different culture, in which the implementation of true values is privileged, in which the solidarity, equality and love prevails.. Guayaquil´s Mayor, Jaime Nebot, had the opportunity to share conversation with you, Mr. President, in the city of Buenos Aires, due to the re opening of the Colon Theater. The mayor agrees with your economic and social way of thinking because through that thought it’s possible to solve with pragmatism, effectiveness and justice issues in all sectors, especially the poorest. While presenting this award in which Guayaquil declares you Illustrious Guest and presents the key to the city, let us, Mr. President, invoking the wise words of Don Jose Enrique Rodo, Uruguayan great man, who taught that human beings have to have a dream in life, understanding that an ideal is elusive, but with tenacity, persistence, enthusiasm and optimism, it can be achieved. The greatest ideal that a person can hope is to reach to be effective in serving others. In your case, Mr. President, and in the case of Ecuadorians we are challenged to accomplish the task that the master Rodó told us, that is, to put our visionary prow to a limitless horizon reaching the highest ideal of a public service wishing more work, more services, more welfare, prosperous countries and a world in which peace and mutual understanding between men prevails.


BICENTENNIAL GENERATION AND RESPONSIBLE GOVERNMENT Dr. Mauricio Rodas General Director Fundacion Ethos

Under the Biarritz Forum, held the first days of November in France which brought together several former presidents and current ministers, legislators, mayors and other political leaders of Latin America and Europe, inaugural event was held on "Generation Bicentennial�. This group, which I preside being the founder and General Coordinator, is formed by young Latin-American politicians, businessmen and civil society actors, with a plurality of ideological currents. Despite the differences in thinking that we maintain on certain issues -we consider them healthy for the democratic debateagree on the need to transcend the divisions of left and right and take the criteria for Responsible Government Model that Ethos Foundation has been promoting, as a set of basic guidelines for consensus to detonate the development of the region. For us, the responsibility is the antithesis of the great enemies of Latin America: populism and authoritarianism, regardless of whether they are right or left. Therefore, we believe that the important thing is not that public policy comes from any of these flows, but it has to be responsible, which forces to developing parameters for determining and that is precisely what is intended by the criteria of the Model Responsible Government. These criteria were the result of an analysis of major agreements in the academic and intellectual international level (on issues such as democracy, sustainable development, gender equity, among others) as well as observation of best practices and success stories in public management in various countries around the world. The need to looking beyond traditional concepts, such as left or right, arose over two hundred years ago under completely different realities to present, not only due to their inability to adapting to changing times, but also the evidence on the performance of their application. Development models have been applied in Latin America for decades, tinted by the dispute between left and right and under regimes of either orientation, have failed. Proof of this is that the region has 190 million poor people, huge gaps in health and education and alarmingly institutional fragility. While most of our countries have been trapped in inflamed unresolved ideological discussions, others such as Chile, Costa Rica, Uruguay and more recently Brazil, have managed to transcend the left-right tension, privileging the effectiveness and accountability for progress. Clearly we need a paradigm shift; a different vision for addressing the political process. Our generation is characterized by the pursuit of innovative concepts, and in that construction we have no problem blending ideas from different trends, trying new combinations and questioning ideological immobility. For a generation like ours, who saw in their teens the fall of the Berlin Wall, which has grown along with a rapid technological development and today is connected with the world without limits and real-time, the persistence of ideological labels that act as barriers of thought and action is unexplainable. Nor do we understand why, while evolution should be the rule, some governments in the region have authoritarian practices, based on populist economic recipes defeated by history. This is the context in which Bicentennial Generation arises. So far, Bicentennial Generation is represented by nine Latin American countries, and includes figures such as Marco Enriquez - Ominami, who comes from a modern socialism as Chile and highlighted as a candidate for the presidency of that country last year; Maria Machado, the most voted deputy of the opposition in recent elections in Venezuela; David Luna, current candidate for Mayor of Bogota; Nicolas Ducote, founder of the largest Think Tank in Argentina, among others.


The group has two clear objectives. First, a number of things into question the "status quo" policy, including why the passionate and sometimes ideological blind defense of flags that has hampered most of our countries to generating basic agreements to move forward and why our region continues being the most unequal in the world despite economic growth or why the violation of rights and freedoms is still present in several Latin American nations. Second, to contribute from a fresh and innovative vision, solutions to old problems and new challenges, promoting the application of the criteria of Responsible Governance Model in our countries, convinced that priority should be to defeat poverty, and that this it´s necessary to overcome the dogma of economic growth or government handouts alone are enough to be achieved. To meet these goals, Bicentennial Generation established several lines of action for its members in each country, such as evaluation of public policies together with the formulation of reform proposals if they differ from parameters of responsibilities, the establishment of training schemes for young leaders on these issues, and the dissemination of statements in the media. Openness to critical comments and suggestions from the public to enrich the vision that inspired the group is a fundamental part of the strategy, for which they have been enabled tools such as Facebook and Twitter. In several Latin American countries, it is clear the depletion of traditional political positions whose antagonism has not been possible to overcome in disadvantage of their respective societies. Faced to this, and under the slogan "freedom in evolution", a new generation like ours, Bicentennial Generation no longer seeks to free itself from the chains that our forefathers fought two centuries ago, but the rigid ideological positions that are hindering progress, contributing ideas to generating a consensus that will give us prosperity and construct a responsible government.


BUSINESSWOMEN Mrs. Haydee Miranda de Garcia Vice-president SUMESA S.A.

Throughout history in times of crisis, wars, expansions or declines, women have had some role in the world of work. After World War II, women are gaining wider spaces and consciously demanding equal status with men at the political, legal, labor and cultural level. The introduction of women into the labor market is not recent. Most of the time women are expected to be employed in administrative positions while senior managers were held by men, because the paradigm that women do not have the same capacity than men still remains, fortunately in small scale. About this topic, women have a much sharper intuition and sensitiveness as a general rule, than men can develop; women are creative, meticulous, perfectionists and very good leading working groups, able to manage from a family budget to an enterprise budget. We are persistent, we must work hard to achieve success, if results are not seen at first we use up all possibilities; we give credibility with respect to oneself and to others. According to data collected by the Global Entrepreneurship Research Association (GERA), directed by Babson College and London Business School who studies the role assumed by women in business activity, it’s estimated that more than a third of people who are involved in a business activity are women. Those who launch a business project not only do it to "improve" labor, but to promote their personal life, often discovering a natural talent for growing certain business, demonstrating greater skills when it comes to coping with the ups and downs and optimize available resources, managing the situation effectively. Being businesswoman in any part of the world requires an entrepreneurial spirit, dynamism, value and integrity, qualities for managing and pursuing opportunities in the profitable market. It’s clear that currently, women, because of their academic, personal and entrepreneurial development, deal important spaces in the business field and in recent decades it has been remarkable the increase of entrepreneurial women that in spite of being mothers or taking care of the family and home, in many cases working from home, have combined their activities without having any disadvantage compared to their peers in terms of creating a business and their role as wives and mothers. In our country we have many examples of entrepreneur women who have led or are leading businesses, contributing to the development of the country. Among them I can highlight my dear mother, Mrs. María Freire de Miranda (+), worthy example of tenacity and optimism, Mrs. Olga de


El Juri (+), Mrs. Clara Bruno de Piana, Ing. Joyce Higgins de Ginatta, first businesswoman in the field of hardware, former President of CAPIG, former President of International Women Forum Ecuador (WIF), President of Mipymes, Mrs. Isabel Noboa Pontón, a very successful businesswoman, President of Consorcio NOBIS, Mrs. Gabriela Sommerfeld, President Aerogal, Ing. Maria Gloria Alarcón, former President of Guayaquil Chamber of Commerce, Mrs. Gladys El Juri de Alvarez, Mrs. Olga de Doumet, President Akrem, Mrs. Lucía Fernandez de De Genna, Dra. Rosalía Arteaga Serrano, former Vice-president of Ecuador, Mrs. Gabriela García de Aguirre, Public Manager, Mrs. Rebeca El Juri de Kronfle, President ETV Telerama, among other outstanding entrepreneurs worthy to be emulated. Outside the country, the following must be mentioned: Mrs. Esteé Lauder, Queens – N.Y. businesswoman, known as the grand dame of the cosmetics, started in 1920 with a craft factory to turn it into an emporium of beauty products; left office in 1994, and was the only woman on Time magazine's list of the 20 most influential business geniuses of the twentieth century. In explaining her success, the cosmetics queen once said: <<I've never spent a day without selling.” If I believe in something, I sell and do so aggressively”. Mrs. Lucy Harris, who at her 92 years, is very lucid is president of Jarris Production in New York and a member of International Women´s Forum. In France we can highlight Mrs. Liliane Bettencourt, of the L’Oreal firm, which at her 75 years continues exerting business; her father prepared her to take over L'Oreal, not only on the facts as she says, but putting her life into it. In life you learn to have <<feelings>>, then intuition, one learns to trust them. Her father had made her practice a lot at the factory. Both spoke the same language and he taught her to be brave. As a moral legacy he transmitted he the taste for beauty and the sense for dignity. One of the most significant examples for a businesswoman in Spain, is Amparo Moraleda, CEO of IBM Spain, who at 41 has managed to be a clear example that it can be possible to achieve balance between family and professional life. Another example of entrepreneur women in Spain is Rosalia Mera, co-founder of Inditex Empire. She has remained anonymous since the Zara phenomenon appeared and few people know her name associated with this high fashion empire that has given so much to talk; married and divorced, mother of two children (one disabled) and President of the Paidela Foundation for the employment for disabled people. Zara would not be Zara without a woman as Rosalia Mera, with ability to carry forward the project, sharing failures, financial problems and marathon work days. In an interview she claimed, that it would be desirable having women in business administration, as the data analysis and interpretation of reality from the female perspective that can enrich, diversify and pluralize the institutions. During the last decades there has been a remarkable increase in entrepreneur women. The need, freedom, economic independence and personal satisfaction are the predominant reasons why many women choose to direct their career towards these paths. Although It’s surprising that few women are in senior management positions and although we conquered vast areas and large vindications, the journey has not been easy and there is still much to be done; professional achievements are the product of many years of struggle in the labor sphere, by tradition, predominantly male, which in most cases we have been relegated to a second place. However, the dynamic pace a modern woman manages in the process of integration into the world of business and its projection, not only in this field but also in other areas, such as scientific, political


and social, is allowing us to develop a greater role within the corporate panorama, at local, continental and global level.

THERE IS NO PARADISE WITHOUT PRODUCTIVITY Sr. Ferley Henao 1

The Berlin Wall’s fall in 1989 drew a line between efficiency and inefficiency that are associated with wealth and poverty. The day the wall fell, the reporters consulted the opinions of world leaders on the meaning and implications of this crucial moment. Francois Mitterrand, at that time President of France, was asked if he considered that the Berlin Wall`s fall was the collapse of socialism and thus the triumph of capitalism, to which he replied: "No. It is neither one nor the other. The victory of a new global power, called Productivity, has taken place ". How right was Mitterrand and how deaf we have been? Finally now, twenty years later, Latin America is beginning to promote the idea that we are in "the era of productivity" and proclaims that only productivity can be achieved with changes in these nations to turn into dynamic and robust economies, able to reduce poverty, unemployment and inflation. During this time, back to productivity, the dream paradise of development has become an illusion. Celebrating its third year in office, Ecuador’s President said: "We must turn our eyes to productivity to have a more efficient country”, and a publisher of El Universo newspaper that refers to this point, says “Very low performances are indeed, our main problem. We do not produce enough in terms of effort and invested resources and the most surprising thing is often the carelessness with which this issue is dealt". There must be clear the difference between production and productivity: According to Larousse, production it’s the "action to producing" / "sum of the products of the soil or industry". Instead, productivity is the "simultaneous increase in production and performance due to the modernization of the equipment and improving working methods”. This difference which seemed small is big, huge, and decisive. Larousse makes clear that productivity is not a consequence of luck, but the result of upgrading the materials used in production, technological upgrading and training that result in improvements in working methods. But, is Latin America in the rural sector at the XXI century? In terms of knowledge and thus technology for productivity, competitiveness and profitability, the rural sector in most countries of this region is closer to the nineteenth century than to century XXI. Impact of this technological backwardness are very serious and are expressed in indicators such as unemployment, migration, trade deficit, low standard of living, food security problems, poor credit and investment for the sector, inflation and environmental degradation.


Globalization and technological advances, which accelerated in the second half of the twentieth century, including all the sciences related to the rural world, makes it imperative to put the agricultural sector in line with the global reality in terms of competitiveness. Based on the foregoing considerations, it’s essential to encourage agricultural productivity through knowledge transfer programs to achieve effective and sustainable development because, in addition to the increase in direct and indirect jobs, positive effects occur such as dynamic economy and effective contribution to food security. From the environmental point of view, with higher performances in the crop area is reduced favoring the ecosystem. Example: to produce 100 tons of corn Ecuador requires 45 acres while Chile harvests on 10 acres. ""Progress and development are impossible if you keep doing things as they always have been done,” says Wayne W. Dyer. According to the latest FAO data, published on September 2nd for the period 2009, Ecuador Corn yields are 2.2 tons / ha, Chile 10.5, U.S. 10.3 tons / ha. Consider the following graphic which illustrates the evolution of productivity in Ecuador, Chile and the United States. As an example we can see the corn’s case because this behavior is a constant in most agricultural products, and keep in mind that with best performances lower costs per unit of production (tons, kilos, etc.) and increased competitiveness. Chile in 1980 produced 3.5 ton / ha and Ecuador 1.1. Twenty years later, Chile has increased the yield by 300% and 100% Ecuador. Ecuadorian tomato productivity was 20.6 ton / ha. 223.1 Germany: USA 80.6, Chile 71.1, Canada 70.8, Uruguay 64.5. Ecuadorian bean occurred at an average return of 0.2 ton / ha, Egypt 2.9, Canada 2.0, USA 1.9, Chile 1.7, Colombia 1.2. The potatoes return in Ecuador was 5.9 ton / ha; USA 46.3, Canada 31.3, Argentina 28.7, Mexico 27.7. Ecuador produced rice at a rate of 4.0 ton / ha, Egypt 10; Uruguay 7.6, USA 7.9, Peru 7.4, El Salvador 6.9. Cassava crops in Ecuador gave 3.1 ton / ha, India 34.4, 19.4 Panama, Costa Rica 15.0; Paraguay 14. These are just a few examples that indicate agricultural, agribusiness and agro-export weakness. That's the definition. But let us not forget that taking advantage in a proper way of strategic planning options, Colombia turned their main weaknesses in a great opportunity and is making enough profit from it: "Colombia, the risk is that you are willing to stay.”


Agricultural weakness can also be turned into a great opportunity. Of course it is essential to return to agriculture, but no to agriculture losses as it has been practiced today in most of our Latin-American fields. Agriculture need to be undertaken with knowledge, based on a responsible, serious and profound technological upgrading. The task is for everyone, not just for the public sector. The private sector, both agricultural and agro-business (preferably associated) can implement programs that have an impact on new opportunities to generate wealth and export to all five continents products obtained efficiently in Colombian agriculture and transformed with skilled labor in agro-industrial plants in this country. Economic and social development depends, in large extent, opting for an efficient, profitable and competitive agriculture. The perception that agriculture produces only loss is a false paradigm derived from the idea that agriculture is still practiced without knowledge, obsolete and inefficient techniques, habits that have become widespread. In "The Change of Power", Alvin Toffler, referring to agriculture, anticipates that: "It will be taken a complete new perspective on the role of agriculture, which doesn’t need to be considered as a retrograde sector, but a sector that, potentially, with the help of computers, genetic engineering, satellites and other new technologies may someday become more advanced and more progressive than all chimneys, mills and mines in the world. The knowledge-based agriculture may be tomorrow’s spearhead of the economic progress. Furthermore, agriculture will not be limited to cultivate edible - but will increasingly cultivate more energy crops and supplies for new materials”. When should this change start? Now that it is urgent to gain competitiveness. At this very moment, we just need to establish a commitment and conviction of businessmen, agencies and public and private institutions. We must act quickly to obtain new strategic positions. 1Agricultural and agribusiness Consultor. Co author of the following books: “Desarrollo Econòmico Local, El Rol del Municipio” published by the Banco Interamericano de Desarrollo BID and “Agricultura Limpia, Eficiente y Rentable para el Desarrollo”, published by T.P. AGRO: Director of Technological Innovation.


Conflict and Schools Mediation Ab. Gabriela Moreira Aguirre 1 Face difficulty when it is still easy; perform the great task by a series of small events (LAO-TZU) Life of human beings is marked by conflict. Conflict is an inherent and obvious part of human life and as such its presence is unavoidable in any situation: labor, social, family, school, etc. Every human being has his own way of dealing with conflict situations that arise in his life and with relationships that establishes with others, these forms will be largely driven by perceptions, which means that each human being has a special way of perceiving situations, is this difference of perception that leads to confrontations that we know as "conflicts". However, it is obvious that seen conflict as negative in human beings lives has occurred that they do not have effective tools for conflict management. Avoiding them is not a solution because only leads to stagnation and limits development of potential as human beings capable of handling the conflict's own existence, additionally, it is a tool for improvement and personal growth. A properly managed conflict helps people grow as such and to develop their skills. In the education system proper management of conflicts is a matter of vital importance, learning to live together and interact is an inseparable part of the learning process, being an important tool in the development of all members of the school community. Teach to live together is one of the essential purposes of school education. In order to learn to live together you need to know to deal with conflicts, how to deal with them is, in itself, a lesson and learning. Therefore learning to live together in a democratic society requires the assumption of strategies based on prevention and intervention in the conflict in a peaceful manner, mainly through "dialogueâ&#x20AC;?. On the other hand education is a valuable and important tool in the conception of values, violence and peace. Education is a tool that can transform the world from violence to peace, that is why UNESCO has recognized the importance of education as a means of transforming the world focusing its


contribution as a means of securing rights of children and youth, while teaching them how to live in democracy. Currently there are numerous strategies and different models of conflict management within educational frameworks. From institutions where they have an established model to institutions where mixed a number of methodologies to act in difficult situations. From institutions where they have an established model institutions where mixed a number of methodologies to act in difficult situations. In this respect mediation in schools has aroused great interest among teachers and especially in parents, since they demand new tools to manage conflicts they face in their daily work. School use of mediation in this context is the integrated or integration model, which, according to the author integrates values of healthy and participatory democratic discipline. It is based on the acceptance of the duties and rights of each person and the implementation of the culture of conflict management with an emphasis on school mediation. This model integrates regulatory and related models, clearly indicating that there must be rules (model punitive-sanctioning) to regulate the interaction within education institutions; at the same time have to take into account the need to foster the creation of a climate and culture of dialogue (relational model) through a series of conflict management techniques that allow Parties, boys and girls, to be protagonists in the development and elaboration of school rules. In this way the authority can be exercised, and there are schools with authority, but not authoritarian; also schools are capable to gain authority focused on the possibility of creating participatory spaces with students, parents and teachers to discuss the rules and resolve conflicts peacefully. School mediation seeks to create learning processes in educational institutions for students to expand their way to cope and handle difficulties between the various bodies. Students acquire and train skills and techniques to help their peers resolve conflicts cooperatively, thereby promoting values such as respect, responsibility, peaceful coexistence and the protagonism of children in decision-making. It is gaining much more presence in educational institutions that are becoming aware of the incorporation of these programs within educational frameworks and mechanisms to build a coexistence much more participative and democratic. Mediation is a tool in the process of conflict resolution and for cases in which the parties have exhausted the possibilities to solve them by themselves or in which the situation of violence or no communication prevents them from doing so. School mediation is an institutional tool that can address the conflict and violence in educational communities as a mechanism for conflict prevention and treatment as actions that promote learning develop social skills that allows to build a true life. In those cases may request the intervention of a third person or persons to help construct a fair process, restoring communication and creating suitable climate space to enable them to confront and resolve conflicts. This person we call mediator. Final decision will always be of the parties not from the mediator.


Contracts Renegotiation: evidence lack of oil policy Ec. Enrique Rosales Ortega Oil Analyst / Columnist for El Universo newspaper In the oil industry, the relationship between the Ecuadorian Estate and the private foreign companies runs through contracts containing especial clauses, because each oil field is different from the other and therefore the agreement is different. This topic has become controversial since the beginning of the relation that goes back since 1982 until today, generating an inexistent oil policy on long term, and has caused an irreparable damage to national interests. It has been managed in an irresponsible way by the oil authorities in turn. In every government, the ignorance or naivety has prevailed sometimes, and in others, the knavery. I deeply believe in private sector. I think its presence is vital for a country’s development. But the way they have operated in what has to do with the income distribution, is something reprehensible. Ecuador is the owner of the natural resource (oil), therefore it has the right to earn more. The cause of this distortion is the way these contracts were signed. Certain Ministers of Petroleum and Petroecuador Presidents are allegedly responsible for this situation. Since 1982 two types of contracts have been defined for exploration and exploitation of large oil fields setting down the year life, as guaranteed in Article 16 of the Hydrocarbon Law. The first one is: The Provision of Services which is that private contractors were obliged with the state CEPE (today Petroecuador) that from the gross income, their investments, costs and expenses were repaid, plus the payment for services. The major drawback of this model is evident when international crude oil prices fell and the State didn’t receive enough money. They were signed during Hurtado’s and Febres Cordero’s presidencies. And the second model is Involvement, in which the contractor obtains a percentage in crude production. The calculation is done on a fixed reference price applicable to the contract for signature (for example USD 15). When an increase of price in the international market occurred, the Estate didn’t obtain the expected benefits which went in detriment of them, because private oil companies kept the difference. These agreements were signed during the governments of Durán-Ballén, Bucaram and Mahuad. We must highlight that the marginal fields (which reached 1% of the whole national production), were executed by the current Minister of Petroleum, Wilson Pástor, as he was an officer of President Durán-Ballén.


With this background, on February 2006, Dr. Alfredo Palacios’s regime, made a proposition that both parts –private and Estate share 50%-50% that surplus. This is, if crude price in the market reached USD 50, that difference (USD 35) should be divided equally. It was called. “Reassessment of Surplus Value” Former Minister of Economy, Diego Borja’s idea, was to calculate it since 2000 (beginning of dollarization), to obtaining additional USD 400 million for the Treasury and should be executed through a reform project of the Hydrocarbon Law. At that date (February 6) the national crude oil price was average USD 40, with a clear upward trend. Some oil analysts calculated the harm to the Estate around US$ 4.500 million (from2001-2005) having in mind that in 2002 the conflict in the Middle East started and the prices soared, consequently, the profits of private oil. nd

On March 2 , 2006, the Legislative received the mentioned project from the Executive, with the character of urgent. In the core, indicating that the oil companies that have existing contracts shall be required to implementing favorable situations for the State, therefore, “Contract amendments should be signed, if there were any, within a term not exceeding 30 days from the day of the notification by the competent authority; this doesn’t imply a new process of negotiation”. This is applicable only to foreign companies that because of international prices, the economic balance was lost, i.e., which tends favoring one: in this case, the private. These reforms, in case of being approved by the Congress –will only are applicable for future contracts between the State and the oil companies, meaning that it’s applicable from the date of its publication in the Register. This money, according to Borja, would go to the special account (CEREPS, oil fund) for investment, infrastructure, productive reactivation, social, investigation and environmental cleanup. In late March, after a long debate, the House approved the reform of the Hydrocarbons Law. With the exception that 60% was allocated for the Estate and 40% for the private oil companies. The Executive had 10 days by law, to approving or veto it, but insisted in the original proposal: 50%-50%. In front of this situation the private oil companies, threatened to suspending their investments or present claims in local or foreign courts whether the law went into effect, and therefore oil authorities warned them to withdraw their concessions. In the time stipulated by the law, April 6, 2006, the executive gave a partial veto: Reaffirmed its original order: that the distribution of surplus should be 50% for the State and 50% for the private. The decision was adopted even though companies tried convincing President Palacio to fully veto th this legal order. The Congress had 30 days to reject or accept. On April 19 , 2006, the Congress accepted the executive’s veto about the Hydrocarbon Law. It was established that the oil companies should pay 50% of the extraordinary income of crude oil sale, from the rule of law until the establishment of a final rule. There were claims by the representatives of the private to the th Constitutional Court. That petition was denied by that organism. On April 25 , 2006, the Official Register published the reform and therefore automatically it became law. It was known as “Law # 42”. At the end of June 2006, Dr. Fernando Santos, defender of private oil companies, indicated that “before issuing the Regulation, the Government should await the opinion of the CT and acquiesce to the demand and initiate a renegotiation process to get better participation for the State, with the contractors consent. The new tax policy is confiscatory because it uses the oil profits. The country is going through wrong paths”, Santos affirmed. Until that date, it wasn’t talked about renegotiation of contracts, but the application of the percentage for the price surplus of the crude oil barrel, because they were two different topics. The epilogue of Law 042 was the conflict between Borja and Official of Palacio’s regime. The application of a rule was the motive for Borja’s way out, who confirms that the State will take part at least with 50% of the extraordinary income, and clarifies the wording of the formula that allows this calculation. The income will be monthly paid, and revenues are settled within the first 15 days of the next month. Petroecuador will be in charge of doing this. For sure the amount of the benefits brought by law 42 for the State coffers was never known. In the non-payment and late payment of certain private oil companies, in October 2007 and 15 months of effectiveness of Law 42 the


country had gained US $ 751 million of which US $ 494 million had been received and US $ 257 million were unpaid. Correa declared that if the oil companies disagreed, and “started making trouble, he would only give them 1% of profitability and the rest (99%) would be taken by the Estate, because that is a concession given by us. th

The threat became true through executive decree on October 4 , 2007, and changed Law 42. President Correa justified the new distribution in base that the valid constitution (1998) indicates that the Estate is the owner of natural resources. This measure was struck by the extent and because it was so “radical” the change of distribution. However, it was expected to occur. The results weren’t good because some private went before the CIADI to claim their rights. The new Constituent reformed the Tax Equity Act, created a tax for extraordinary income coming from oil exploitation. There was a change in the distribution from 99%-1% to 70%-30%. It was the beginning of the conflicts between the Estate and the private oil companies. The oil authorities (including naval dome) weren’t capable of renegotiate the contracts. th

On July 26 , 2010 the Assembly approved the new Hydrocarbon Law which gave a term of 120 days, to migrate the existing contracts of Participation and Provision of Services to private oil companies had with the Estate and due in coming years and then the government formed a committee of oil experts. Had held since the start of its management (January 2007) to solve this problem but wasn’t able doing it. The presidential order was: “Or renegotiate their contracts or leave the country” Once installed in the negotiation process, one of the clauses was discussed between the parties’ payment for crude oil exploitation. It was established that the Estate will reserve 25% of the income as a “sovereign margin” In relation to the price, it consists in three items: spending allocated field operation, the amortization of future investments and payment for the service. That amount isn’t linked to the crude oil price per barrel, but has a lot to do to checking if the business was a good one for the Estate. For example, if the private oil company exploits 20.000 bpd and the reference price is around US$ 75, US$ 1.500.000 will be generated. Of that amount the Estate will keep the 25% of the marginal sovereignty (US$ 375.000) and the balance US$ 1.125.000 provides a basis for paying the fees. If the above is fixed in US$ 40, the private will get US$ 800.000 (53, 3%) and the balance (US$ 325.000) also stays and the Estate would be receiving US$ 700.000 (46, 7%) Being the crude oil price untimely volatile (goes up and down), what will happen if the barrel’s price locates itself to US$40? If we take the previous example: 20.000 bpd by US$ 40 equals 800.000 how will the Estate assign 25% of the sovereign margin once concluded the renegotiation according to the final figures? Andes Petroleum fixed a price of US$ 35 until 2025; Petro Oriental US$ 41 until 2018; Repsol, US$ 35, 95 until 2018; Enap US$ 16 until 2025, etc. Why are there so many differences in prices? Because Enap from Chile has an eight year oil camp production; Petro Oriental and Andes have oil fields with 35 years of existence. When camps are new, much crude and little water is taken out, the opposite of old camps and therefore the extraction is more expensive. Economist Jorge Pareja, President of the Ecuadorian Forum, also questions. What will happen if the crude price drops in the foreign markets? He said it was a doubled-edged sword. Its positive when the price stands high, but who can guarantee that it will stay at those levels? The question is: What is the benefit in this negotiation? Why was defined a relatively high rate? If the exploitation cost per barrel of crude oil of the Estate EP Petroecuador or Petroamazonas reaches US$ 10 average, somebody should answer. Another topic discussed and approved by the private, was the waiver of arbitration and international demands in the CIADI, as soon as the Sate decides to terminate a contract by expiration. Once the matter is concluded, some private oil companies didn’t come to an agreement; among them are: Canada Grande, Ecuador TLC Petrobras, EDC and CNPC which altogether represent 14% of the crude production. Some camps will be assumed by EP Petroecuador. The remaining private agreed investing a total of UD$ 1.205 million during the next four years. If during 2011 a company doesn’t exploit five planned wells, the agreed annual fee will be deducted of the unrealized investment. At


the end, EP Petroecuador will operate to an extension of 1, 9 million hectares, Petroamazonas with a million, and the private with 1, 4 million hectares. The small private oil company’s renegotiations that manage the marginal camps have still to be done, because their deadline period will be rd January 23 , 2011 to migrate the model contracts. This process lasted four years and was defined in four months. It was a clear demonstration of the State’s lack of oil policy. For the time and money lost (caused by low oil production and lack of private investments) somebody should respond. If we would have a real statesman in the presidential head office, another would have been the national scene with so much poverty and misery. Only time will tell if this entire bustle had reason to be or if it was another show of demagoguery and immaturity, typical of a Civic Revolution that not even the fans understand.

HIGH PUBLIC EXPENSE, WRONG MODEL

Ec. Jaime Carrera Director of the Observatory of Fiscal Police

Budgetary spending in 2011 will be at the highest level of a cycle of expansion over a decade at the pace of the oil boom exacerbated in the last four years. Compelling evidence of reduced survival space in that dimension and the slow depletion of a state model that induces the country to live beyond their means, with the social perception of an apparently good standing of fiction sustained in oil and aggressive borrowing. Expenditure growth, genesis of an unviable model In 2011 will continue the expansion of public spending, essence of a static - populist – authoritarian model. Total public sector spending will be six times more than that in 2000 and budget spending will grow at a similar magnitude (Table 1) while the country's production in current values will be multiplied by three. Public expenditure will be 172% more than the amount spent in 2006, meanwhile, if you meet the forecast GDP growth of 5%, the country's production will be 48% higher. The public wage bill presents a more quick evolution, in 2011 and will multiply by ten the value of 2000, without considering that this item is underestimated by increases to teachers and other obligations. In 2011 salaries will almost triple the 2006 value; in terms of GDP it will increase 6% to 11% (Table 2). Public spending increases since 2007 well above the evolution of the economy and inflation, is the axis of economic and social activity, constituting nearly 50% of the country's output if it includes spending subsidies not recorded in public accounts. In previous years it remained at about 25% of GDP. The weight of public expenditure is inconsistent with national economic capacity, high price that a poor society cannot afford which is expanding at the rate of oil revenues. Price per barrel of


oil, annual average in 1994 was $ 13.7, in 2001 sold at $ 19.2; in 2008 reached $ 82.9 and for 2011 itâ&#x20AC;&#x2122;s estimated being at $ 73.3, Despite the oil boom, back into red numbers From 2000-2007, the public accounts reflected overall fiscal surpluses and light budget deficits. Since 2008, at the peak of the oil boom, the whole public sector deficits begins another story, more pronounced in the General State Budget, which in 2011 estimates a red balance of 6% of GDP (Table 3). The country is engaged in another spiral of debt, reediting bad practices associated with oil boom of the 70s. From 2009 to 2011 the public debt would be increased by 8 points to 28% of GDP, regardless of other contingent liabilities and the issuance of CETES. Chile, with a higher level of development, has a debt / GDP ratio of around 10%. Peru, a country heading to progress, is determined to reduce that relationship in around 23% of GDP. These countries submitted the 2011 budget with deficits about 1% of GDP. High funding requirements In 2011, $ 5,369 million or 8.7% of GDP raises total funding requirements to finance the deficit of $ 3,735 million and the amortization of past debts. There are no specified compelling ways to finance such need for resources. In 2010 sources of public deficit financing was limited and the few existing had high costs due to high country risk -1000 points, similar to Ireland-, medium-term fiscal vulnerability and mistrust in the country. In a similar scenario to 2010, more oil revenue prices and less investment for lack of liquidity could reduce the deficit, but increased spending on salaries for more than $ 600 million by increases to teachers and others, will weaken the fiscal situation. The funding opportunities are limited to whatever can be gotten from China, Korea, multilateral agencies and the IESSâ&#x20AC;&#x2122;s loans. The achievement of credits determines the implementation of 50% of the investment and current considered expenditure. Fiscal liquidity in trouble, CETES arise In 2010, Treasury bills were submitted to permanent liquidity episodes overcoming with high costs. As shown in Graphic 4, in March $ 250 million provided by the AFP came in and were consumed almost immediately. In May, they sold to the IESS $ 500 million which were spent in two months. In August they were placed in the IESS $ 492 million more in bonds, value reached to save public housing until September, month in which $ 800 million from another credit from China entered. Funds ran out again until November when again $ 170 million bonds were sold to the IESS. By December 3, balance of fiscal fund was reduced to $ 520 million and at certain time remained in red. All this value is not available to State Treasury. After describing this story, in December $ 554 million were delivered in Treasury Certificates (CETES) with terms of up to one year to alleviate the lack of liquidity mechanism. This emission involves severe risks to its stability because of the persistent lack of liquidity, its payment and / or renewal, will constantly put pressure on the Fiscal Fund with permanent imbalances of public accounts and accumulation of new non transparent debt and not recorded as such. Liquidity episodes in greatest dimension will be repeated in 2011. CETES issuing justification to stimulate the market and make good use of liquidity has no greater support. Stock market can only become dynamic with long-term confidence and incentives to private enterprise, since neither the vast resources of IESS have done so. Regarding the management of liquidity of the economy this is the function of Central Bank. If there is excessive liquidity Central Bank could issue papers to collect or arrange assemblage. However, liquidity of economy, that feeds intake and imports, is mainly given by expansion of public expenditure which should drastically be restricted. Paradoxically CETES will contribute to high cost and Central Bank is committed to the use of reserves in their care. CUADRO 1


GASTO DEL SPNF Y GOBIERNO CENTRAL. $Millones SPNF*

G. Central**

Sueldos GB.

24200,0 22000,0 20430,0 22094,0 18215,0 14413,0 14217,0 15611,0

3889,0 3230,0 706 2000

9927,012554,0 7011,0 8627,0 2581,0 2913,0 2006

2007

3928,0 4707,0

2008

2009

6800,0 6300,0

2010

2011

Fuente: Banco Central. OPF. * 2010 y 2011 estimado ** 2010 y 2011 incluye entidades autónomas y descentralizadas

CUADRO 2

GASTO DEL SPNF Y GOBIERNO CENTRAL. Porcentaje del PIB G. Central

SPNF

G. Central

24,400 23,700 27,700 40,400 39,900 38,60039,00 07 27,700 04 16,800 20,200 11 09 27,300 06 18,800 06 26,300 11 29,300 2000

2006

2007

2008

2009

2010

2011

Fuente: Banco Central. OPF. * 2010 y 2011 estimado

CUADRO 3

DÉFICIT/SUPERÁVIT SPNF Y GOBIERNO CENTRAL. % PIB SPNF

Gob. Central

3,3 2,1 1,5 0,0 0,8 1,6 2,1 0,7 00 00 -0,9 00 -01 -01 -01 -01 -01 -01 -3,9 -03-2,5 -03 -06 -05 Fuente: Banco Central. Ministerio de Finanzas. OPF * Estimación OPF


CUADRO 4

Depósitos del Tesoro Nacional. 2010… 1662,0 963,0 706,0 613,0 1161,0 789,0 520,0 601,0

Fuente: Banco Central * Incluye $550 millones bonos IESS ** Incluye $492 millones bonos IESS *** Incluye $800 millones préstamo China **** Se vendió $50 millones más $120 millones en bonos al IESS

Who leads your professional career?

Mrs. Pino Bethencourt Gallagher Advisor to top leadership, Bethencourt Strategic Development

Someone important once said that "those who haven’t got a career plan end up working for those that do have”. There are many people in senior management positions who never stopped thinking what they have wanted to be in life and made a career plan. Americans are used to implement and realize their "American dream” very quickly. The plan must be clear as soon as possible, since for selecting a college, requires constructing a worthily resume to be admitted by such institution and generation of consistent contacts network takes years. The American obsession to build their own career goes to extremes in which some New Yorker parents sacrifice a great part of their income on behalf of getting for their children the best and most expensive kindergarten in the city. Trading slobbered toys with the Gates’, Hilton’s or Trump’s kids could be the beginning of a glossy, profitable future. While in Europe we inherit our parents' mortgages and also debts of our governments, in USA parents already pre-plan the income curve of their children. Everything of the above is very funny don´t you think? Well, not quite. There are a number of American university students completely frustrated because they cannot clearly acknowledge what they want to be in life and others who directly have alienated from the invention, becoming gothic or grunge or anti-system. In Europe sovereign debts are each day more and less important. The big question is which of your professional success have you originated and which not. Because if you are not the one drawing up the plan and making it happen, then who is? When the economy was great and we were all rich and successful we thought we deserved professional success without a special reason. It is true that we worked hard, studied plenty and were leaving our souls inside and outside the office. But now we're still the same intelligent


hard workers and success is fading away by the blow of layoffs, workforce reduction and sales collapse. What we do not like to admit when we are doing well, (but then wield it as unfair attack when things go wrong) is that there are many more variables beyond our control than elements under our control. There are many people who are successful even unpreventable and many fail even though they strictly apply all what books and experts recommend. Some speak about fate, luck or other divine interventions. Agnostics blame politicians. Each one can blame anyone. There is much, much that doesn’t directly depend on us. But even admitting that the raging seas of life can do whatever they want with our little boat, we also know that studying the plans, look at the stars and chart the way gives us a better chance of reaching port than sailing to drift. The map does not guarantee that we reach our destination, but if the storm draws us to the end of the world, at least we’ll know where we are when we recover from the shock. Surprisingly, very few managers stand to plan their professional map. When was the last time you took a couple of hours to write and study what you want to be? Many say that they do think about this while going in taxis, waiting in line at the airports, or while discussing with their wife’s or husbands. As if it was a shopping list or administrative management reminder for the next day. Each one who spends appropriate amount of time and level of attention to the importance given to this matter, shouldn`t later complain if they have no job or enterprise because of the politicians. If a person wants to succeed in life he should begin thinking strategically about its own professional path. Need to spend attentive and unique hours analyzing the reasons of failures, as well as the reasons of their own and other triumphs. Drawing navigation map includes analysis of strengths and weaknesses in the field of technical knowledge of course. Don’t forget, that intangible skills are more important and more crucial for results as more you rise in business hierarchy. Find mentors with experience, prioritize networking in the agenda, seek specialist advice and make specific seminars for working with key skill, are the stops to any career path. Everything begins and ends with your choice to this question: will you be the master of your destiny or slave of the unpredictable? nd

Published in www.cotizalia.com on October 22 , 2010.



Revista Mipymes 48 INGLES Nov Dic 2010