7,648 cracks in Ecuador's socialist delusion

The New York Times published an interesting story on Christmas Eve about continuing fallout from the economic decisions made by former Ecuadorian President Rafael Correa. Correa is a socialist who served two terms between 2007 and 2017. His time in office was highlighted by a rejection of  Ecuador’s debt (he defaulted) and American influence in the country. Instead, he invited China to come into the country and accepted $19 billion in loans for infrastructure projects in exchange for 90% of Ecuador’s oil production until the cost of the projects was paid off. The largest of the projects was the Coca Codo Sinclair dam. The dam was supposed to generate enough electricity to power a third or more of the country’s needs. But the reality has been something quite different.


When it finally opened in late 2016, China’s president, Xi Jinping, flew to Ecuador to celebrate.

Yet only two days before the visit, the dam was in chaos.

Engineers had tried to generate the project’s full 1500 megawatts, but neither the facility nor Ecuador’s electrical grid could handle it. The equipment shuddered dangerously, and blackouts spread across the country, officials said.

Ecuadoreans were never told about the failure, and a full power test has not been attempted since.

Today, the dam typically runs at half capacity. Experts say that given its design — and the cycle of wet and dry seasons in Ecuador — it would be able to generate the full amount of electricity for only a few hours a day, six months out of the year.

And that’s really the best case scenario. There’s a much worse case in which the entire dam could fall apart as a result of shoddy Chinese workmanship:

As early as 2014, technicians noticed cracks in the Chinese-made stainless steel equipment. That December, 13 workers were killed when a tunnel flooded and collapsed.

A senior engineer sent records to Mr. Correa, the president, asking to brief him on the problems, according to documents viewed by The Times. The engineer was fired days later, according to former officials…

Now, 7,648 cracks have developed in the dam’s machinery, according to the government, because of substandard steel and inadequate welding by Sinohydro. Sand and silt are also big concerns because they can damage vital equipment.

The reason a dam had not been built here wasn’t simply the scale of the project it was also the dam’s proximity to an active volcano:


When Fernando Santos, an energy minister in the 1980s, found out that the Coca Codo Sinclair dam was actually being built, he could hardly believe it.

During his time in government, officials had rejected a much smaller version of the project. The whole idea was doomed, he said, because of the volcano nearby. A major earthquake had decimated oil infrastructure in the area in 1987.

“The volcano has been erupting since the time the Spanish came to Ecuador in the 16th century,” Mr. Santos said, adding that investing so much money “in such a risky location was nonsense.”

One reason authorities may have been so willing to take a risk on the project is that they were receiving bribes. The anti-corruption official who was in charge of the project was caught on tape discussing the existence of bribes from China. Multiple officials involved are currently in prison for taking bribes from a rival engineering company.

Correa’s time in office also included other highlights including his promotion of the Chevron shakedown lawsuit. Correa created a PR campaign which brought sympathetic Hollywood leftists like Mia Farrow to visit Ecuador to bring favorable publicity to that case. Like fellow socialist Hugo Chavez, Correa was also known for cracking down on press freedom. He sued El Universo newspaper over an opinion piece and won:

A judge in Ecuador ruled Wednesday that the directors and former opinion editor of El Universo newspaper must each serve three years in prison for an opinion article about President Rafael Correa, state media reported.

The judge also ruled that the accused must pay $30 million, and the newspaper must pay $10 million, to Correa, the state-run El Ciudadano government information website reported.

The case drew international attention from press-freedom advocates, who say Correa aims to crack down on critics by restricting the media.


After his second term in office ended, Correa left for Belgium where his wife is a citizen. The belief at the time was that his chosen successor would take his place for a few years and then Correa would make a triumphant return in time for the next election. Instead, Correa’s successor turned on him and helped support an initiative which created a 2-term limit for presidents. He also began prosecuting government officials involved in bribery.

This summer Raphael Correa requested asylum in Belgium to avoid facing charges of kidnapping back home. Just last month, Ecuador’s top court ordered Correa to stand trial in that case:

Correa was charged in September by prosecutors of orchestrating Fernando Balda’s kidnapping in Bogota after he fled to Colombia’s capital to escape what he considered persecution by Correa.

A supreme court justice decided that the accusations against Correa, his top intelligence chief and two others merited a trial. Judge Daniel Camacho also formally declared Correa a “fugitive” after he flouted for months an order to appear before the court every 15 days as part of the ongoing probe. For his defiance, Ecuadorean authorities had previously requested Correa’s arrest and extradition from Belgium, where he has been living since leaving office last year…

Balda was abducted but quickly escaped harm after nearby taxi drivers alerted police, who stopped the vehicle in which he was being taken away. Colombian authorities later determined that three intelligence agents with Ecuador’s police had contracted the kidnappers to abduct Balda.


Correa faces up to 12 years in prison if convicted, but that’s not likely to happen as he can only be convicted if he returns to his home country.

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Jazz Shaw 8:01 PM on November 29, 2023