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News Link • Economy - International

The market isn’t free if the elites hijack it

•, By Farah Stockman
 When Ecuador struck oil in the 1970s, the tiny group of wealthy families who ran the place bought themselves mansions and private jets. They threw a few bones to the poor: subsidies for gas and food. But then the price of oil plummeted. Suddenly, they were broke.
So they borrowed more money from the United States and the International Monetary Fund. Once again, they stuffed their own pockets with cash. But this time, they gave almost nothing to the poor. The United States and the IMF wouldn’t let them. The loans were conditioned on free-market reforms: reducing subsidies, selling off state-owned enterprises, and letting foreign oil companies have their way.

Understand that history, and you will understand why the poor people rose up and toppled three presidents in Ecuador. You will also understand the meteoric rise of Rafael Correa, who has built a career on criticizing the IMF and the United States.

“Correa comes from that virulent reaction of people not just sensing that they were getting screwed over, but seeing it,” said J. D. Bowen, an assistant professor of political science at Saint Louis University.

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