ASSESSMENTS

Ecuador: Moving Toward Economic Crisis

Dec 29, 2008 | 21:14 GMT

MAURICIO LIMA/AFP/Getty Images

Summary

In the wake of a default on international debt, Ecuador is already borrowing from its own Social Security Institute. At the same time, the country is imposing all oil production cuts related to its membership in the Organization of the Petroleum Exporting Countries on foreign investors — a decision that will alienate foreign direct investment. The two moves together bring Ecuador closer to economic crisis.

Ecuador's decision to borrow from its own Social Security Institute and impose oil production cuts on foreign firms will help precipitate an economic crisis....

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