Ecuadorean President Alfredo Palacio reshuffled his Cabinet on Friday and replaced Economy Minister Diego Borja, who angered the United States with his staunch support for a windfall tax on oil companies.
Palacio appointed presidential aide Armando Rodas, a lawyer and former deputy economy minister, to the post after he accepted Borja's resignation. Rodas said on Friday he would keep a tight spending policy but set the government priority to develop social projects.
Borja has been under fire from local business groups for his staunch refusal to dilute a new law to boost taxes on foreign oil companies in Ecuador. The law, passed by Congress in April, is widely blamed for stalling free trade talks with the United States.
Borja, who has been on the post only six months, has had bitter disagreements with some of Palacio's close aides over possible changes to the language of the oil reform law.
The law compels foreign oil companies to share with the state at least 50 percent of extra revenues above a set benchmark price agreed on their original contracts. Palacio is considering further Cabinet changes, said a government spokesman. "The cabinet crisis is not over yet," Enrique Proano told reporters.
Palacio had asked his ministers for their resignation letters, a government source said. Rodas is a close aide of the government's administration secretary Jose Modesto Apolo, who is considered the president's right hand man. Rodas was the deputy economy minister until the end of last year and holds a master's degree in economics from the University of Illinois at Urbana-Champaign.
Rodas will become Palacio's fourth economy minister since he came to power last year after his predecessor was toppled by popular and congressional turmoil.
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