Riyadh.- The President of the Republic of Ecuador, Rafael Correa, stated he fully agreed with the proposal of strengthening OPEC’s geopolitical role. This proposal was put forward by the Venezuelan President Hugo Chavez during the opening session of the 3rd OPEC Summit of Sovereigns and Heads of State. Ecuador recently became an OPEC member once again.

“This cannot surprise us, there is no other way we can do it. Is oil not an essential strategic resource? Is oil not the cause of current invasions and wars? Is OPEC not seeking to establish collective policies, public policies based on our peoples? Consequently, we should not be afraid of OPEC having a geopolitical vision. On the contrary, attempting to deny that vision is like trying to deny reality. We need a geopolitical vision to implement appropriate public policies, to implement appropriate collective actions, to appropriately handle a strategic resource such as oil”, asserted the Ecuadorian President during a press conference.

When asked about his position regarding the proposal of reviewing the currency used by the Organization to carry out oil transactions, the Ecuadorian President affirmed that this discussion has a political nature, and asserted that Ecuador fully agrees with OPEC trading oil using a hard currency.

“If we continue trading with a weak currency such as the dollar, which has substantially weakened in recent times, we would be transferring our resources to countries that have more stable currencies”, he stated.

“Let’s remember that oil is not manufactured, oil has already been created and is extracted. This means we are transferring resources to first world nations, and that in order to buy goods from those countries using a hard currency, for example the Euro, we will have to give them more oil for the same amount of goods. That is not good for us”.

Fair prices and appropriate compensation

President Correa considers that the “fair price” topic is an economics “debate that has lasted centuries”. Yet, President Correa affirms that producing countries should receive appropriate compensation, even more when rich nations are the largest consumers. “We should seek a compensation for poor oil importing nations that does not exacerbate their poverty”.

In this sense, President Correa stated that Ecuador agrees with the creation of the Bank of OPEC. This Bank will provide funding to these poor nations at preferential interest rates.

When asked about current oil prices, President Correa sustained that in real terms current oil prices are lower than in the 80s.

At the forefront of environmental protection

The Ecuadorian President pointed out that OPEC should be at the forefront of environmental protection, and emphasized that there is no contradiction between worrying about the environment and OPEC’s role. On the contrary, they are complimentary. 

In this sense, President Correa insisted that OPEC could become the great coordinator in the fight against global warming and CO2 emissions, “even more with the failure of the Kyoto treaty”.

President Correa mentioned that Ecuador will take the opportunity during the presidential meeting to present its proposal to create a special tax for consuming countries. This special tax should be used to study the effect of oil on the environment and global warming. The tax should also be used to compensate the poorest countries so that they can begin the struggle against this phenomenon, of which they are the main victims. Finally, this tax should be used to search for alternative forms of energy”.

A new economic logic

Also within the environmental framework, President Correa indicated that Ecuador is bringing up for discussion the “rupture initiatives” with an energy and environmental policy approach, and even incorporating economic logic.

“Ecuador’s largest proven reserves are in the ITT field, located in the Yasuni National Park. They have a $20-billion value, and they would give Ecuador a $700-million net flux per year. We have told the world that we will leave this oil in the ground, we will not touch it, but that we want to be compensate for at least half of what we would gain, in other words, at least $350 million”, he explained.

According to President Correa, this is a new initiative and if it works it would entail a new alignment of energy policies, and even the beginning of a new economic logic that could change world relations.

 “If you want to buy a tractor from Europe you have to pay for that tractor. If Europe wants to breathe the pure air from the Amazon Jungle they don’t have to pay anything to the countries with Amazonian territory. That has a mercantile reason, but it’s not logical. If we follow a just logic we will have to compensate not only the production of merchandise but also the production of other values, such as the environment. This way, poor countries would be less poor. The problem is that the rich countries would be a bit less rich”.