317. Airgram 187 From the Embassy in Ecuador to the Department of State, October 13, 1972.1 2

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FROM: Amembassy QUITO
DATE: October 13, 1972
SUBJECT: Ecuador’s Military Regime: An Appraisal of Eight Months in Office

1. SUMMARY: After eight months in office, the military regime has accomplished little (with the exception of correcting the fiscal problems left by the Velasco government). Its social and economic policies are not markedly different from Velasco’s, it has aroused little if any popular support, and has shown itself to be rather inept administratively. It is faced with some opposition from the Guayaquil business community, students, and labor, but with minimal skill it ought to be able to manage these problems. In short, at this time, the future here looks as if it would resemble the recent past. END SUMMARY

2. The military regime headed by Army Brigadier General Guillermo Rodriguez Lara as President took power in Ecuador in February 1972 on grounds that the politicians were ruining the country and that only the military could put Ecuador on the path to economic and social development.

3. After eight months in office, it cannot be said the Rodriguez Lara regime has accomplished much more than the Velasco Ibarra regime might have done.

4. The Rodriguez Lara government is essentially middle class, nationalistic, and middle of the road. The few radical elements included in high positions in the government when it was formed have been eliminated. The social and economic policies pursued by the Rodriguez Lara regime bear no marked departure from that of the predecessor regime.

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5. If the regime has a model, it would be Brazil, not Peru. The regime feels closest to Brazil, and the Brazilian Embassy in Quito does all it can to foster that closeness.

6. The Rodriguez Lara government has not been repressive. There is no press censorship, and there are no political prisoners as such. Several prominent figures of the Velasco Ibarra regime are in jail on charges of corruption. In one case a former Velasquista minister has been cleared of charges by the competent court, but still he remains jailed because the Navy bears him a personal grudge.

7. Compared to the Velasco Ibarra regime, the new government has shown itself to be more personally honest and less corrupt, though it is susceptible to the lure of perquisites: promotion of nine Army colonels to general officer rank is under active consideration--an astounding number for Ecuador.

8. Though the Rodriguez Lara regime is scarcely more efficient, and in some cases even less efficient, than the Velasco Ibarra regime, it has instituted a program of orthodox financial policies to counter the fiscal chaos which it inherited from Velasco Ibarra. These policies have been a significant stabilizing factor which should not be underestimated, particularly in a society such as Ecuador’s where the private sector is the predominant feature of the economy.

9. The Ecuadorean military fancied themselves, upon taking office, to be skilled administrators. That they are not. Not only were they woefully ill-informed on the complexities and technicalities of government, economics, petroleum, or what have you--and after eight months they still have many basics to learn--but they lacked any real feel for politics. The cautiousness of the regime has prevented it from taking too many new initiatives, but, when it has, it has done so without prior consultation with those concerned. Clamor and objections are inevitable, but the deed is done, prestige committed, and the government finds it difficult to accommodate valid complaint.

10. The projected decree affecting property rights of foreigners in border areas has Colombia hopping mad because it affects thousands of Colombians and was to be issued without any consultations whatsoever with Colombia. (The Ecuadorean Foreign Office was not consulted, either.)

11. A classic example of lack of prior consultation with those affected was the petroleum legislation of June 6, 1972. U.S. petroleum concessionaires (except Texaco-Gulf, who are already in production) are informing the GOE that unless there can be some modification in the current petroleum decree, many U.S. firms doubt they would wish to continue operations; the risks have become unacceptably high, particularly in the face of evidence there is not as much petroleum in Ecuador as was originally thought. Thus far the GOE has not budged in its terms. For one thing, the present Minister [Page 3] of Natural Resources, Navy Captain Gustavo JARRIN Ampudia, was responsible for the petroleum decree, and has his prestige committed to it. For another, the GOE either does not believe, or thus far refuses to recognize, that Ecuador is less well endowed with petroleum than original estimates indicated.

12. President Rodriguez Lara has appointed a reasonable and intelligent Army officer, Col. Jaime Duenas, to head the state petroleum monopoly CEPE. Duenas has overlapping petroleum jurisdiction with Jarrin, so that eventually one of the other will probably have to go. If Jarrin goes, Duenas may become petroleum czar and then perhaps the present deadlock between the GOE and the U.S. companies can be resolved.

13. Insofar as another major U.S. interest in Ecuador is concerned--fishing and the two hundred mile limit--this government is every bit as difficult for us to deal with as was the Velasco Ibarra regime. The Foreign Office, which tends to be slightly more flexible in this matter than other elements of the GOE, is currently at a nadir in power and influence in the GOE, perhaps because it is the only ministry in the GOE staffed entirely by civilians.

14. What do the next eight months hold for Ecuador? Most probably more of the same.

15. The Rodriguez Lara regime does not arouse any visible enthusiasm among Ecuadoreans. It is neither admired nor hated. It is considered thus far to be fairly inept, but then all Ecuadorean regimes are inept to one agree or another and the Ecuadorean people are quite accustomed to, and tolerant of, ineptness in government.

16. There is a fair amount of in-fighting within the government. The Navy is more inclined to nationalistic radicalism than any other element, and the President and the Army do not trust the Navy. It is conceivable the Navy would like to get rid of President Rodriguez Lara, but the Navy could not accomplish this by itself. The Army is far larger and more powerful than either of the other branches of the armed services, and Rodriguez Lara could only be dislodged if at least part of the Army decided to join the conspiracy. There are a limited number of radically inclined younger army officers, but there is no evidence they are ready to turn against their superior, Brigadier General and President Rodriguez Lara.

17. The Rodriguez Lara government is actively negotiating to acquire military equipment to modernize the three armed services, and in Ecuador this has always served as a palliative against discontent among the officer corps.

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18. The Government faces potential trouble on three civilian fronts: the Guayaquil business community, the students, and the labor unions. These have been reported on separately. With even moderate adeptness, the GOE should be able to cope with the minimum demands of these groups and muddle through.
BURNS [initialed]

  1. Source: National Archives, RG 59, Central Files 1970–73, POL ECUADOR. Confidential. It was drafted on October 11 by Burns and Mason; cleared by the DCM, POL/H, ECON, and DATT in draft form. Stamped notations on the Airgram indicates that it was received at the Department of State on October 20 at 3:35 pm, 1972 and at the Bureau of Inter-American Affairs on October 25, 1972.
  2. Aside from correcting the fiscal problems by the Velasco Government, the Embassy concluded that the military regime had accomplished little in its first eight months. Petroleum legislation had made it more difficult for international companies to operate in the country.