Ecuador Launches a Charm Offensive to Woo Global Investors
To sustain government spending, Ecuador is turning to the international capital markets. But the country must placate global investors, who got burned five years ago when it defaulted on two bond issues.
By Aaron Timms
Ecuador, it seems, is fast becoming the favored haven of the world's most notorious intelligence leakers. Will global investors find the route to Quito as attractive as Julian Assange and Edward Snowden apparently do?
Five years after he called international debt holders "true monsters" and the nation defaulted on two bonds issued by previous administrations, Ecuadorian President Rafael Correa is preparing for the country to return to the international capital markets this year or early in 2014. Correa, who in February secured a third term with a crushing congressional majority, has financed the social programs and public investment that underpin his popularity through oil windfalls and bilateral funding arrangements, most notably with the Chinese. Ecuador is home to South America's third-largest crude reserves, but a drop in oil prices and a slowdown in China have Correa hunting for alternatives to sustain government spending, which amounts to almost 45 percent of gross domestic product. ....