White-Bellied Spider Monkey Losing to $18 Billion of Oil

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http://www.bloomberg.com/news/2013-09-09/white-bellied-spider-monkey-losing-to-18-billion-of-oil.html


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Ecuador’s white-bellied spider monkey may become victim to President Rafael Correa’s struggle to find more cash to finance public spending four years after a $3.2 billion default locked the nation out of global credit markets.

Not even the endangered white-bellied spider monkey can escape the lingering consequences of Ecuador President Rafael Correa’s decision to default on $3.2 billion of debt four years ago.

Correa, who hasn’t borrowed from the bond market since calling Ecuador’s creditors “true monsters” in 2008 and faces a record $3.68 billion budget deficit this year, said last month the nation needs to start oil drilling in Yasuni National Park to help finance public spending. The park, one of the world’s most-biologically diverse and home to Ecuador’s biggest population of the spider monkeys, also sits on 920 million barrels of oil worth an estimated $18 billion.

Ecuador, which tripled government spending since Correa took office in 2007, has financed itself by borrowing from China, multilateral lenders and pensioners since its default. While dropping a plan to refrain from oil exploration in Yasuni has incited protests from groups trying to protect the Amazonian forest, Correa can avoid paying the average 9.8 percent in annual interest bond buyers demand to hold 10-year debt of countries that share Ecuador’s B credit rating.

“The government has financing problems,” Roberto Villacreses, an analyst at the Ecuadorean Institute of Political Economy, said by telephone from Guayaquil, Ecuador. “Without the default at the beginning of Correa’s administration, we would have other credit sources now.”