Peer Reviewer 1:
Ecuador's banking crisis, its aftermath, and recent events are correctly described in this notebook.
With respect to names and correct translations, please note that: (a) AGD, Agencia de Garantia de Depositos, should be translated as Deposits' Guarantee Agency. (b) Junta Bancaria should be translated as Banking Board. (c) Superintendencia de Bancos should be translated as Superintendence of Banks. (d) Creditos vinculados in this particular case should be translated as Filanbancos's bank loans involving bankrupt or near bankrupt Isaias brothers' holdings.
In general, this article presents all sides of the story, except the following: (a) An estimate of the amount that government officials received as bribes to bail out Filanbanco. President Jamil Mahuad has already been indicted on corruption charges in this respect. However, he teaches at Harvard. (b) An estimate of the true cost of these dealings, as this type of corruption far exceeded the value of assets stolen by bankers in cahoots with government officials at the time. (This information is of course based on the media coverage of these events.) This would include the degradation of public institutions -- especially those involved in public financial management and the financial sector governance (mainly the AGD, Superintendence of Banks, Ministry of Finance, Central Bank and Controller's Office) --, the destruction of the private investment climate and of the social service delivery mechanisms for basic health and education programs. This particularly impacted the poor, due to a lack of resources to invest in these areas in the aftermath of the crisis, and due to a foregone economic growth. (c) An estimate of the value of the companies seized by the Correa Government in retribution for the Isaias brothers' corruption and squandering of funds in the case of Filanbanco. (d) The Correa Government's strategy (and timetable) to eventually sell these companies: individually, a holding, or through the Stock Exchange.
The article examines a crucial aspect of corruption in Ecuador, mainly the channeling (for a fee) and the squandering (also for a fee) of scarce public funds that could instead be invested in the social sectors. It is not to say, however, that this type of government assistance in times of crisis (as for example now) might not be necessary. The point, however, is that oversight institutions are often shadowed and their credibility destroyed by the frequent bribes accepted here in order for public funds to be wrongly accessed and mismanaged. The profits of stolen financial assets (bank government bailout funds invested in old or new companies that belong to Isaias brothers) were hidden in financial centers of developed countries. The asset recovery effort by the Correa Government should be accompanied by an institutional reform and better governance. In this case the theft of public assets was facilitated by a lack of transparency and public accountability. Ecuador needs to strengthen its legal, financial, and public financial management systems.
Peer Reviewer 2:
I feel that although it presents a passionate and accurate theme, the Reporters Notebook does not involve the whole national reality, by dwelling instead on one single important event. In doing so, it doesn't quite reflect the impact of corruption on the Ecuadorian society.
Comments The governments measures to recuperate the outstanding national debts seemed futile, essentially because they were the result of illegal acts, committed by the untouchables of society, the historical and traditional elite of money-makers and job-givers. The official retrieval responded more to a campaign offer than to a political vendetta, becoming a vindication of public moral and justice.
By the end the 1990s, Ecuador had to overcome a banking tsunami that devastated everything, making the country suffer the almost irreparable breaking of the financial system, and, even more so, the breaking of thousands of families, due to the impudicity of corrupted bankers and control authorities. The audits quantified the great damage and at the same qualified the affair as the most shameless assault in Ecuadorian economic history, which resulted in the pain and sorrow of so many people lost in the sea of disappointments and poverty.
But the bitterness that surrounded the nation soon turned into rage, and the people demanded, uselessly at first, firm and transparent justice without hypocrisy. Years passed before changes became visible. Justice, with fair and reliable agents, emerged from the center of the tsunami as a buoy of hope for a country sick of corruption and bad news, willing to get rid of the dark historical ropes of ignominy and to leave behind the racial and social prejudice that enslaved it to political frauds.
In good part, the great achievements are the work of the actual government, which, instead of giving back the metallic change to the corrupted bankers that cynically reclaimed it, gave back trust to the nation. This government has indeed demonstrated that the answer to the globalization of corruption and impunity is the true rule of law.
Global Integrity uses a