I think Correa has shown by this oil windfall tax that he is perhaps not as smart as we had hoped.

I can't see any foreign oil company wanting to set up shop now in Ecuador. Why would any foreign oil company come in and spend millions if not billions of dollars only to turn over all the profits to the Ecuadorean government?

Oil production in Ecuador is now going to drop significantly. Oil tax revenues will drop for the state.

He talks about justice but it's the Ecuador government that has re-negged on these oil contracts. I don't want to sound negative here, but Correa is showing the world that perhaps he cannot be trusted. If it's perceived that Ecuador will break deals on a whim, why would anyone want to open up shop in that country? What they are doing is economic suicide.

As far as the mining industry goes, if some outrageous windfall tax is imposed on producers, you can kiss goodbye to any mining industry whatsoever. You would think that a man with a master's degree in economics would understand such a simple economic truth.

Having said all that, I think Correa cannot be too heavy-handed with foreign mining companies, since it's an industry that is much harder to run.

This is one of the things that is keeping me in this stock: the belief that Correa cannot possibly be soooo stupid as to impose unreasonable taxes on mining producers.