October 5, 2007 (LPAC)--Ecuador's President Rafael Correa yesterday asserted his government's sovereign power to defend the General Welfare, and issued a decree eliminating the windfall profits currently being pocketed by foreign oil companies.

The companies had been operating under contracts signed when the average benchmark price of oil was $23 a barrel. Since then, the international price of oil has nearly quadrupled, and the oil multi's had been merrily making off with 50% of that price difference. No longer.

Ecuador produces around 530,000 barrels of crude a day, but two-thirds of that is currently in foreign hands, despite Article 247 of the Constitution, which declares the nation's subsoil resources to be "the inalienable property" of the State, and therefore to be exploited in furtherance of "national interests." Citing Article 247, and Article 3 which asserts the government's obligation to defend the country's natural resources and secure economic development for the "collective benefit" of all, Correa decreed that 99% of windfall oil profits must now go the State, and the remaining 1% to the companies.

The government expects to receive some $830 million in increased revenues from the decree, according to Oil Minister Galo Chiriboga, an amount which can build a lot of hospitals, schools, and railway tracks in that needy country.

The decree is the first major measure taken by the government since President Correa won an impressive mandate in the Sept. 30 Constituent Assembly elections for his project to rebuild the country by dumping free trade economics. Look next for measures to eliminate central bank "autonomy" (i.e. ownership by private financier interests), which Correa said on Oct. 1 will be one of his top priorities after the election.