Ecuadorian politician
Ricardo Armando Patiño Aroca (born 16 May 1954) is an Ecuadorian politician who has served as Minister of Foreign Affairs of Ecuador from 2010 until 2016, under the government of President Rafael Correa. Previously he was Minister of Finance and Minister of the Coast. He is one of the ideologists of The Citizens' Revolution who with Correa wanted to gradually introduce a democratic socialist government in Ecuador. On 4 March 2016, he was named as Defense Minister by President Correa.
Academic career.
Born in Guayaquil, Patiño studied economics at the Metropolitan Autonomous University (UAM) in Iztapalapa, Mexico. He earned the diploma to "Best Economics Student from Autonomous Metropolitan University", and he graduated as top student, due to his high grade point average (1979). He then received a Master in Economic Development at the International University of Andalusia, Spain (2001).
He has published the following books: "Desempleo y Subempleo en Guayaquil en la Década de los 90: Teoría, Conceptos, Indicadores y Tendencia" (Unemployment and Underemployment in Guayaquil during the 90s: Theory, Concepts, Indicators, and Trends) and "Jubileo 2000", "La vida antes que la Deuda" (Jubilee 2000: Life before debt). He is co-author of the book: "Empleo y economía del Trabajo en el Ecuador"(Employment and Labor Economics in Ecuador), published by Abya-yala (2001). Additionally, he wrote the introduction for the book: "Deuda Externa y Bonos Brady" (External Debt and Brady Bonds).
Besides, he collaborated as Technical Editor for the collection of books that make up the "Plan Nacional de Empleo del Ecuador" (National Plan of Employment) that addresses topics such as: "Plan Nacional de Empleo y Desarrollo Local" (National Plan of Employment and Local Development), "Las Microfinanzas en el Ecuador"(Microfinance in Ecuador), "Inversión Pública y Uso Intensivo de Mano de Obra- Políticas y Metodología de Medición"(Public Investment and Intensive Labor Use – Policies, Methods of Measurement), "Empleo y Género" (Employment and Gender), "Jornadas de Intercambio de Experiencias de Proyectos de Empleo y Desarrollo Local" (Experience Sharing Conference Project on Employment and Local Development), "Censo Nacional de Cooperativas de Ahorro y Crédito controladas por la Dirección Nacional de Cooperativas"(National Census of Saving and Credit Unions controlled by the National Directorate of Cooperatives).
After writing his master's thesis related to the world of labor, Patiño was External Consultant of the ILO (September 2000 – February 2001) and General Coordinator of the Research Team "Estrategias para una política de empleo para el Ecuador con énfasis en la pequeña empresa y micro empresa" (Strategies for an employment policy for Ecuador with emphasis on micro and small enterprise) ILDIS (February – September 2000). From March 2001 to December 2002, he was Coordinator of the Technical Advisory Committee of the Inter-Ministerial Committee on Employment of Ecuador.
Throughout his career he has held the positions such as : Economic Consultant of the Ecuadorian Central Class Organizations (1982–1991), Parliamentary Counselor (1990–1992), Founding Member of the Board of Directors of the Association of Users and Consumers of Guayas (1992 – 1997), Founder of the Group of Social Studies (March 1999 – 2000), General Coordinator of the Research Team "Strategies for an employment policy for Ecuador with emphasis on micro and small enterprise" ILDIS (February – September 2000), Founding Member and Coordinator of the Jubilee 2000 movement-Red Guayaquil Driving Group member (May 1999 to present), Member of the Driving Group (May 1999 – to present), Coordinator of the Technical Advisory Committee of the Inter-Ministerial Employment Commission of Ecuador (March 2001 – December 2002), Founding Member and Manager of the Savings and Credit Cooperative "De todas" (February 2003 – May 2005), Coordinator of the Professional Team appointed by Jubilee 2000 – Red Guayaquil, for developing the National Strategy for Debt Relief (August to December 2003), Advisor to the Minister of Economy and Finance of the Republic of Ecuador (June to July 2005), General Undersecretary of Economics at the Ministry of Economy and Finance of the Republic of Ecuador (July–August 2005), Minister of Economy and Finance (January–July 2007), President of the Comprehensive Auditing Commission of Ecuador's Public Credit (2007–2008), Minister of the Coast (July–December 2007), Politics' Minister Coordinator (2008 – 2010), and Minister of Foreign Affairs, Trade, and Integration (2010 to present).
Political career.
After graduation from UAM, Patiño went to Nicaragua where he took part in the Sandinista Revolution, which overthrew the Somoza family dictatorship. This socialist revolution was influenced by liberation theology. He was then appointed Head of the Department of Economic Planning, National Institute of Agrarian Reform, Southern Region, Nicaragua (1980–1981), where he worked on land redistribution which was a major priority of the Nicaraguan government.
Patiño then returned to Guayaquil to work as an activist with trade unions and workers in the country. He was Economic Adviser for the Ecuadorian Central Class Organizations (1982–1991) and Founding Member of the Board of the Association of Users and Consumers of Guayas (1992 – 1997). He was also an advisor at the National Parliament (1990–1992).
In 1999 Patiño was a founding member, along with Alberto Acosta, Patricia Davila and Yvonne Benitez and others, of Jubilee 2000 – Guayaquil Network, an organization that investigated, criticised, and sought to resolve issues concerning Ecuador's foreign debt. Patiño was the Coordinator of this movement for two years, and remains a member of the promoter group.
In 2002, influenced by reading "Creating a world without poverty" by Professor Muhammad Yunus, Patiño gathered together a group of professionals and leaders of social organizations providing financial support and training for women with very low income without access to credit in the financial system (especially from the Guasmo of Guayaquil). This organization, which works with the Grameen Methodology, still works today and has expanded considerably.
Performance in the public service in Ecuador.
Patiño was part of the team that accompanied Correa since the beginning of his political career. He participated in two of his political campaigns: in 2006, (when he first won the Presidency of the Republic for the first time), and in 2009 (when he was elected for his second term of office within the framework of the general elections contemplated under the transition regime introduced with the endorsement of the Magna Carta). The leftist leader led the Ministries of Economy and Finance (nowadays Ministry of Finance), Coast, Coordinator of Politics and Autonomous Governments. He currently is the Minister of Foreign Affairs, Trade and Integration.
Minister of Economy and Finance.
While he was Minister of Economy, Patiño created the Under-Secretariat of Social Economy, and raised the need of carrying out a Comprehensive Auditing to the Ecuadorian public debt. This initiative materialized in 2008. Besides, he increased the budget for health and education, created policies for granting credits to rural areas, and gave priority to investment in social and strategic sectors.
Additionally, the first actions done to design and construct a New International Financial Architecture, fundamental importance issue to the Government of Ecuador that led to the creation of a specialized Presidential Technical Commission for the design of new regional financial institutions, with special emphasis in the design and creation of the "Banco del Sur" (South Bank) as the regional development banks to support new type called the food sovereignty, health, natural resources and knowledge. Also the implementation of a system of payments in local currencies to stimulate and deepen regional trade subsequently managed to make in the Regional Clearance Unitary System (SUCRE).
His initial actions for the creation of the "Banco del Sur" were included in the Declaration of Quito from 3 May 2007 and in the Declaration of Asuncion, 22 May 2007. These efforts converged on the signing of the Founding Act of "Banco del Sur" by the Presidents of Argentina, Bolivia, Brazil, Ecuador, Paraguay, Uruguay and Venezuela, on 9 December 2007.
Relations with IMF and World Bank.
Before the government took office, Ricardo Patiño, as designated Minister of Economy, stated to the International Monetary Fund (IMF) that the country would not sign Letters of Intent with the IMF ever again. (By signing these kinds of documents, Ecuador assumed commitments on economic policies in return for continuing to receive IMF loans). He also announced that the country would pay in advance the total of its debt with the Fund, which added up to $33 million. In that way it would end its credit relations with that organization.
Four months after Correa's government took office, Ecuador settled its debt with IMF and declared Eduardo Somensatto, the representative of the World Bank (WB) in the country as "persona non grata", as a refusal towards the Bank's decision of not signing the second part of the credit for competitive adjustment and consolidated tax, for an amount of one hundred million dollars, because of an alleged unfulfilment of the conditions concerning public debt, established under the conditions matrix.
The World Bank decided not to sign such loan, at the time in which President Rafael Correa was Minister of Economy and Finance, despite the fact that, previously, the Loans Committee had issued a favorable report where it is stated that all the established conditions at the policies matrix and the Board of Directors, were met.
Renegotiation of external debt.
Voicing a speech, that included constant references such as the need of "putting humans before capital at all times", from the Ministry of Economy and Finance (now Ministry of Finance), Patiño drove, since January 2007, the creation of a commission that would audit the total public debt of the country, including the contracting, negotiation, restructuration, and usage of the different types of credits in order to determine their legitimacy, transparence, quality, efficiency, and effectiveness.
The main objective was achieved on 9 July 2007, by means of the issuing of the decree 427 on the part of President Correa. The document, that gave way to an unprecedented process of public debt auditing on behalf of State organisms, stipulated the creation of the Comprehensive Auditing Commission of Ecuador's Public Credit (officially known as CAIC, which is its acronym in Spanish). This Commission audited the "covenants, contracts, and other forms of modalities used in credit acquisition by Ecuador's' public sector that came from governments, institutions of the multilateral financing system or the bank and the private sector, whether national or foreign, from 1976 to 2006".
Patiño, President of the CAIC, structured work that comprehended the technical, financial, social viability that served as a basis for justifying each credit. It also considered the conditions under which they were granted, the conditioning set by the creditor, the destination of the resources, the general impact of the project, among other issues.
The final report of the CIAC was presented in November 2008; among its arguments were the declaration of "illegitimacy" to the commercial tranches and the need of recognizing the joint responsibly comprehended in managing the debt, the annulment of illegitimate obligations and the compensation for the damages caused. President, Rafael Correa, declared on 12 December the moratorium of the external debt, on the tranche of Global bonds 2012 and 2030. Global bonds 2010 represented a capital of 510 million dollars. In February 2009, he likewise declared the moratorium on Global bonds 2030; they added up to a capital of 2,700 million dollars. With this declaration, Correa undertook the definition of a proposal directed to creditors, despite the warnings from the market analysts that the country would suffer the terrible consequences of having refused to pay the debt when it had all the necessary resources in order to do so. The market speculated on the scope of Ecuador's plan. Options revolved around the renegotiation, restructuration, repurchase, exchange of documents, among others. The official proposal was presented on 20 April 2009; it consisted on repurchasing the bonds in circulation for up to 35 cents of their nominal values (price ceiling), appealing to an inverse reverse auction mechanism, by which the owed amount reduced just as the due date for closing the operation got closer. Ecuador finally announced, on June of the same year, that through the operation it had repurchased the bonds with a discount of up to 70 per cent. According to reports from the Minister of Finance of that time, Elsa Viteri, the net savings that came from this operation were 2,000 million dollars. However, when adding the savings concerning the service of the bonds, if their original settlement due date had arrived, the country saved 7,500 million dollars, according to Viteri. Ecuador, buy means of the repurchase and other actions concerning the management of its public debt, succeeded in lowering the service of its external obligations from almost the 40% to the