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.
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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