Ecuador Bows to Brazilian Pressure and Pays Debt to Brazil

Odebrecht in Ecuador The Brazilian Foreign Affairs ministry revealed that Ecuador has quietly made overdue payments to Brazil on a loan for the construction of a controversial hydroelectric project, helping to end a months-long diplomatic dispute.

Overdue payments on a US$ 246.9 million loan were made on Thursday, January 8, added the statement, so "the Brazilian ambassador will be returning to Quito next week." According to Ecuadorian sources the dispute was over an "estimated US$ 80 million."

However the carefully worded statement also warned that Brazil "will continue to closely monitor the evolution of its economic and financial relations with Ecuador."

Ambassador Antonino Marques Porto was called to Brasí­lia in late November after Ecuadorean President Rafael Correa said his country would not pay the loan to Brazil's National Development Bank because of allegations of poor quality work in the controversial hydroelectric project.

But Ecuador last month also expelled executives of Rio de Janeiro-based construction company Norberto Odebrecht SA because of allegedly faulty work on the San Francisco hydroelectric plant, considered key for Ecuador's future energy needs.

The dispute prompted heated exchanges between the two nations, and Brazilian Foreign Minister Celso Amorim angered Ecuador when he said last month that the nation had "shot itself in the foot."

In testimony before Congress in December, Amorim said Ecuador could suffer severe consequences for suspending loan payments, stating that Brazil is among the few sources of loans left for Ecuador because of the global credit crunch.

Ecuador is projecting a US$ 1.5 billion deficit in 2009 because of low oil prices and has defaulted recently on some of its general foreign debt.

Officials have suggested that the dispute could put other joint projects at risk, including a land-and-river trade route that Correa wants to establish to link Brazil's Amazon rain forest to Ecuador's Pacific coast.

Such infrastructure projects integrating Brazil with neighboring nations usually receive heavy funding from Brazil, Latin America's largest economy with much deeper state financing resources than most of the continent's other nations.

Mercopress

Tags:

Ads

You May Also Like

Police car from Rio, Brazil

3 French NGO Workers Knifed to Death in Brazil with Refinements of Cruelty

The Brazilian policemen who first arrived to the crime scene were shocked at all ...

Cashew Hamburger, a Brazilian Invention to Compete with Soy Hamburger

The main raw material for the product is cashew bagasse, discarded by juice and ...

Is Brazil’s Green Revolution Killing the Green?

Despite the multitude of approaches that have been suggested to deal with the developing ...

Brazil Gets Its Own Digital Atlas

The Brazilian Institute of Geography and Statistics (IBGE) launched the National Digital Atlas of ...

China Becomes Brazil’s Third Biggest Trade Partner Behind US and Argentina

The executive secretary at Brazil’s Ministry of Development, Ivan Ramalho, declared that total bilateral ...

Bad News on Industry Output Sends Brazil Downhill

Brazilian and Latin American stocks slumped, as investors took some profits following strong gains ...

Putin in Brazil for Russia’s WTO Ambitions

Although a number of memorandums will be signed in various areas, the main objective ...

Mercosur-Gulf Treaty Should Draw Investment and Tourists to Brazil

The free trade agreement that the Mercosur is negotiating with the countries of the ...

Digital and Free Internet Coming Soon to Brazilian TV

High definition image, digital sound, stable signal, interactivity, multiple channels, and the possibility of ...

Study Offers Suggestions on How to Increase Population of Brazil’s Jaguars

For people living on the Brazilian plains jaguars versus cattle is an age-old conflict. ...