Wealthy Corporations Use Investment Agreements To Extract Millions From Developing Countries
When Rafael Correa entered Ecuador’s presidency in 2007, the nation faced an opportunity and a challenge. Ecuador’s economy depended on oil, and global crude prices were near a record high. Much of the oil was extracted by foreign companies, however, so as prices surged more wealth began flowing overseas.
More than a third of Ecuadorians were living in poverty, and Correa had come to power as a leftist promising “radical, profound and quick changes to the current model of so much exploitation, of so much injustice.”
Soon after taking office, Correa increased a recently enacted windfall tax on oil companies. The idea was to use the tax as leverage to extract better terms from the companies, and this fight against foreign firms quickly became a high-profile pillar of Correa’s broader campaign to assert the nation’s sovereignty.