Cablegate: Global Economy; Ecuador

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ZNR UUUUU ZZH
O 011100Z OCT 08
FM AMCONSUL SAO PAULO
TO RUEHC/SECSTATE WASHDC IMMEDIATE 8561
INFO RHEHNSC/NATIONAL SECURITY COUNCIL WASHDC IMMEDIATE
RUEHBR/AMEMBASSY BRASILIA PRIORITY 9693
RUEHRI/AMCONSUL RIO DE JANEIRO PRIORITY 8873
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SIPDIS

STATE INR/R/MR; IIP/R/MR; WHA/PD

DEPT PASS USTR

USDOC 4322/MAC/OLAC/JAFEE
E.O. 12958: N/A
TAGS: KMDR OPRC OIIP ETRD XM XR BR
SUBJECT: GLOBAL ECONOMY; ECUADOR

Taking the crisis seriously

Lead editorial in center-right O Estado de S. Paulo (10/01) says:
"While President George Bush negotiates a new bailout package for
the financial sector with the [U.S.] Congress, the Brazilian
government should take two attitudes: first, root for success of
these negotiations, since without a planned official intervention,
the crisis will last longer, bailout operations will be less
efficient and the correction will be more painful not only for the
U.S., but worldwide, including Brazil; second, leave out the oratory
and study, with realism, a way to face the challenges without
disturbing the national economy. At this moment, it is more prudent
to forget the optimism... The challenge now is not to make Brazil an
island of prosperity, but to facilitate the accommodation of the
economy."

More power for Correa

Editorial in liberal Folha de S. Paulo (10/01) comments: "President
Rafael Correa received last Sunday, with a large majority, the
approval of the new Ecuadorian Constitution.... The issue now is to
know if in practice the Constitution will be a dictatorial tool in
the hands of Correa.... It is highly risky to politicize the
institutions and guardianship of the executive over other powers, as
is occurring in Venezuela and threatens to happen in Bolivia under
Morales. In the area of economics, nothing guarantees that
contracts will be respected. An untimely action of Correa against
the Brazilian contractor Odebrecht is a good example. ... For now,
Correa's nationalist platform is benefitting from high oil
valuations, which provides social programs and accelerates public
expenditures. However, it is not known yet how the new
South-American populism would face a hypothetical situation, more
and more feasible, of lower of fossil fuel prices."
White

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