Dream's End?

The rumor was that "Shell's pulling out." It hit Ecuador last week with all the panicky force of a colliery's closing on a Pennsylvania hard-coal town. It remained rumor while officials of .the Shell Co. of Ecuador, Ltd. talked about reorganization rather than withdrawal. But in Quito Shell's lawyer, Henry Farquharson, after insisting that plans called for firing of less than 20% of 4,500 employees, added ominously: "You can't go on indefinitely." What he meant was that Shell could not go on pouring money into a plan which has not yet produced a single drop of oil in ten years' exploration.

To the oil worker in the steaming jungles of eastern Ecuador, Shell's withdrawal would mean the end of jobs well-paid by Ecuadorian standards. Roughly $1,500,000 in salaries have gone to native employees annually; the national budget amounts to only $20,000,000 a year. To the importer in Ecuador it would mean the loss of at least 10% of the country's already scarce dollar exchange. To Ecuador as a whole it would mean the end of a cherished dream.

Slippery Ladder. Ecuador has long been envious of the wealth that oil has brought to other Latin American countries and it has hoped to reach prosperity itself on the slippery ladder of petroleum. Little (pop. 3,000,000) Ecuador is industrially undeveloped, politically backward (3% vote) and poor (per capita imports amounted to $4.33 in 1938, compared with oil-rich Venezuela's $30.63). It was glad to get Shell's $30,000 yearly for exploration rights in one-third of the nation's territory--in El Oriente jungle, on the eastern slopes of the Andes, a region once claimed by neighboring Peru. Ten years ago, Shell tackled the job by airplane and muleback, spent an amount unofficially estimated at $100,000,000, blueprinted a $35,000,000 pipeline, built highways and a village (Shell Mera).

At week's end, cheerful Ecuadorians were saying, with the Shell workers' union's General Secretary Guillermo Alarcon: "We must be optimistic that future drillings will produce exploitable oil and the company will be able to maintain at least the present number of workers."* Still more cheerful were those who said: "Shell has been withdrawing from Ecuador since it came here ten years ago."

*If all were fired, Ecuador's social laws would force Shell to pay out more than 1,000,000 sucres ($78,750) in severance pay.

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