Indebtedness in developing countries presents a specific feature which has to be set at
the heart of public debate: it results from an ongoing policy of deprivation and subordination
of these countries by more industrialised countries, transnational corporations (TNCs) and
international financial institutions, with the elites of the South aiding and abetting.
Like other indebted countries in the third world, Ecuador is the victim of criminal
over-indebtedness: while it is one of the countries in Latin America with the most natural
wealth, its resources, mainly oil and bananas, have been systematically plundered by TNCs,
creditors and landowners. A massive and criminal indebtedness has worked as the main
mechanism through which resources are stolen.
As a consequence, Ecuador is the Latin American country devoting the highest part
of its budget to paying back its debt, which has an impact on public expenditure, notably
health and education. In 1980, 40% of the budget went to health and education expenses and
15% to servicing the debt. In 2005 the situation was reversed: the government spent 40% of
the budget on servicing the debt while health and education expenses amounted to no more
than 15%! 1 These figures clearly indicate the priorities of successive former governments
when they distributed resources: those who had to be satisfied first were the creditors, no
matter if it was detrimental to the most fundamental needs of the people. In the face of such
an outrageous situation it is essential to take action.
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