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What would Philip Agee’s 1961 CIA budget in Ecuador get by 2002?


The late Philip Agee, a former CIA officer who blew the whistle on its dirty dealings, was the Edward Snowden of his time.

A 1961 diary entry of Agee’s said regarding a CIA program in Ecuador that “It costs about 50,000 dollars a year and in a place like Quito a thousand dollars a week buys a lot. The feelings I have is that we aren’t running the country but we are certainly helping to shape events in the direction and form we want.”

The program funded right wing politicians and journalists in Ecuador. That wasn’t the full cost of the CIA’s operations in Ecuador but it gives a rough estimate of how much it took – in US dollars – to make a significant political impact in Ecuador at that time.

What would give the equivalent purchasing power $50,000 USD in 2002, the year Chevron succeed in getting a pollution lawsuit that was filed in New York in 1993 moved back to Ecuador?

I did the calculation by converting $50,000 USD to Sucres (which was Ecuador’s currency until it adopted the US dollar in January of 2000) using the 1961 exchange rate. That worked out to 825,000 Sucres. I then applied Ecuador’s annual inflation rate (found here) to this figure for each year until 1999. I determined that, by 1999, it took 1,568,742,349 Sucres to purchase the same quantity of goods and services in Ecuador as 825,000 Sucres did in 1961. Using the 1999 exchange rate I converted back to US dollars. That yielded $133,093 USD.

Ecuador’s switch to the dollar was provoked by very high inflation which went hand in hand with deep devaluation of the Sucre. It was an inflation-devaluation spiral that began in the 1980s and accelerated in the 1990s. You can see this in the data for the exchange rate and inflation I show below. In the years 2000, 2001, and 2002 the annual inflation rate was 96%, 37%, and 12% respectively.

Applying these inflation rates to the 1999 value of $133,093 USD yields $404,180 USD – the amount that would be equivalent to Agee’s $50,000 USD in 1961.

If Ecuador had undergone significant political reforms that combatted corruption and extreme inequality (which can be thought of as legalized corruption) then the cost of buying political influence would have gone up much higher than what this calculation shows. Unfortunately, until the elections of Rafael Correa in 2006, that didn’t happen.

Penn World Tables 6.1                                                  

COL0  – YEAR                      

COL1  – Ecuador/EXCHANGE RATE (unit US=1)                    

COL0                      COL1                    

1961             16.5000000000                           

1962             18.0000000000                           

1963             18.0000000000                           

1964             18.0000000000                           

1965             18.0000000000                           

1966             18.0000000000                           

1967             18.0000000000                           

1968             18.0000000000                           

1969             18.0000000000                           

1970             20.9166698500                           

1971             25.0000000000                           

1972             25.0001392400                           

1973             25.0000400500                           

1974             24.9999809300                           

1975             25.0000000000                           

1976             25.0000000000                           

1977             25.0000000000                           

1978             25.0000000000                           

1979             25.0000000000                           

1980             25.0000000000                           

1981             25.0000000000                           

1982             30.0258293200                           

1983             44.1150093100                           

1984             62.5359001200                           

1985             69.5562515300                           

1986            122.7791977000                          

1987            170.4617004000                          

1988            301.6108093000                          

1989            526.3483276000                          

1990            767.7507935000                          

1991           1046.2490230000                         

1992           1533.9620360000                         

1993           1919.1049800000                         

1994           2196.7280270000                         

1995           2564.4938960000                         

1996           3189.4741210000                         

1997           3998.2670900000                         

1998           5446.5732420000                         

1999          11786.7998000000       

 

FPCPITOTLZGECU            Inflation, consumer prices for Ecuador, Percent, Annual, Not Seasonally Adjusted

Frequency: Annual

1960-01-01          1.68

1961-01-01          3.99

1962-01-01          2.87

1963-01-01          5.94

1964-01-01          4.03

1965-01-01          3.07

1966-01-01          5.45

1967-01-01          3.82

1968-01-01          4.32

1969-01-01          6.33

1970-01-01          5.13

1971-01-01          8.38

1972-01-01          7.88

1973-01-01          13.01

1974-01-01          23.32

1975-01-01          15.36

1976-01-01          10.67

1977-01-01          13.01

1978-01-01          11.65

1979-01-01          10.27

1980-01-01          13.05

1981-01-01          16.39

1982-01-01          16.26

1983-01-01          48.43

1984-01-01          31.23

1985-01-01          27.98

1986-01-01          23.03

1987-01-01          29.50

1988-01-01          58.22

1989-01-01          75.65

1990-01-01          48.52

1991-01-01          48.80

1992-01-01          54.34

1993-01-01          45.00

1994-01-01          27.44

1995-01-01          22.89

1996-01-01          24.37

1997-01-01          30.64

1998-01-01          36.10

1999-01-01          52.24

2000-01-01          96.09

2001-01-01          37.68

2002-01-01          12.48    

 

 

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