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Council On Hemispheric Affairs
MONITORING POLITICAL, ECONOMIC AND DIPLOMATIC
ISSUES AFFECTING THE WESTERN HEMISPHERE
Friday, October 13th, 2006
Press Releases, Ecuador

Ecuador’s Elections: Correa’s Ascension Gives Boost to an Otherwise Flagging Pink Tide

“Calling Bush the devil is offending the devil… The devil is evil, but intelligent.” (Rafael Correa)
• Ecuador’s Chávez smells victory
• With a little bit of luck and a continuous spike in the polls, Correa could win the presidency in the first round
• His economic policy may be more bark than bite, thus allaying Washington’s fears over oil

By supporting Venezuelan President Hugo Chávez’s explosive speech at the UN General Assembly, left-leaning candidate Rafael Correa has become the center of attention in Ecuador’s October 15 election. With his bold anti-U.S. rhetoric, Correa has stirred mounting interest in the country’s normally lackluster electoral season, being repeatedly identified as Chávez’s next ally in the Andean region. Correa’s unprecedented rise in the polls stems from a well-crafted campaign that skilfully focuses on both a pledge to make a clean sweep of the traditionally corrupt government and a brazen reluctance to follow Washington’s guidance. In a country and region where sentiment against market-driven reforms prevails, Correa has empowered himself through his proactive agenda as leader of change, with a good chance of winning the presidency in the first round.

A Promising Candidate

Since September 13, leftist-candidate Rafael Correa and his party Alianza País have taken the lead of the presidential race with 37 percent of the vote, leaving León Roldós, the moderate candidate heading the Red Etica y Democrácia (RED-ID), in second place with 21 percent. He, in turn, is closely followed by banana magnate Alvaro Noboa, with 19 percent. With relatively limited political experience, front-runner Correa has adroitly positioned himself as an “outsider,” a staunch advocate of poverty reduction and a vigorous defender of Ecuadorian sovereignty. Although he was forced into an early resignation for speaking out in favor of a revision to the unpopular bilateral free trade treaty with the U.S. under the current Palacio administration, his explosive exit from the Finance Department only served to buttress his popular support. His outspokenness and ensuing public acceptance has left his opponents no choice but to shift to the left.

In light of recent events - such as Peruvian leftist candidate Ollanta Humula’s loss to centrist Alan García, or a disgruntled López Obrador’s eventual concession in the Mexican presidential race to Felipe Calderón - many commentators have claimed that the Pink Tide was waning. However, Rafael Correa’s upsurge has greatly contributed to a revival of the regime’s Chávez-led ideological momentum. Indeed, Correa repeatedly has spelled out his respect and admiration for his Venezuelan role model. However, this relationship has now become subject to intense scrutiny by Correa’s competing candidate. Several of them have launched a dirty tirade campaign against him, aimed at tarnishing his image. Roldós energetically raised the Chavez specter by accusing Chávez of meddling in Ecuador’s election, a plot that was successfully used by the García campaign in Peru and in the Calderón campaign in Mexico. Cynthia Viteri, a conservative candidate who stands fourth place in the polls, has accused Correa of closely engaging with Abdalá Bucaram, former corrupt Ecuadorian president, now in exile in Panama. These last-ditch tactics seemed to have failed in slowing down Correa’s momentum at the polls, as testified by the precipitous drop of undecided voters from 49 to 18 percent, as well as the growth in positive support he has enjoyed over the past two weeks.
Another valuable asset Correa possesses is that he stands a good chance of inheriting the indigenous vote that has proved significant in recent years. Although he comes from a middle class background, he is fluent in Quechua, one of the main native American dialects spoken by some ten million people throughout South America. He also has been involved in educational programs in poor Amerindian areas. This represents a clear advantage in a country where 45 percent of the population can claim indigenous heritage.

A Dysfunctional and Unstable Institutional System

According to Transparency International, a non-partisan organization monitoring government venality, Ecuador is the second most corrupt nation in Latin America. Ecuadorians, who are regularly exposed to endless cabinet reshuffles and fraudulent practices at the highest levels, are experiencing mounting frustration and instinctive mistrust toward the country’s elites. “Popular coups” are commonplace in a country whose political system is known for being one of the most unstable in the region, with no elected president having been able to complete his term in almost ten years. Indeed, over the last 15 months, five ministers of economy and four ministers of foreign trade have come and gone after pressures resulting from street strikes. This tense situation reached its climax in April 2005, when Lucio Gutiérrez became the latest in a long line of Ecuadorian presidents to be ousted from office by extra-constitutional means.
Among political institutions, the Congress possibly represents the country’s most distrusted branch of government, with 95 percent of the population disapproving of its conduct. It consists of a 100-seat unicameral House that is comprised of well over a dozen parties, not one of which occupies more than 25 seats. Despite its fragmented nature, it has managed to cobble together the two-thirds majority necessary to impeach the president twice in the last ten years.

In accordance with his outspoken rejection of the political establishment, Correa made clear his refusal to submit a slate of Congressional candidates. While running as an independent candidate, Alianza País, Correa’s party, will not benefit from any formal representation in the unique powerful Parliament. This strategy could turn extremely perilous if Correa is elected president since he would lack control over a political bloc in the next legislature. As a result, he has vowed to convene a constituent assembly with absolute powers to draft a new constitution. This plan is reminiscent of Chávez’s use of a plebiscite to rewrite the Venezuelan constitution and needs to be carried out cautiously in order to find a harmonious balance between the executive and legislative branches. Comparable attempts in the past to revamp the Constitution have led, on a number of occasions, to a spike in presidential prerogatives.

Whipping Ecuador: “Dale Correa” (give them the belt)

Institutional instability combined with a long-lasting economic crisis have plunged Ecuador into an ongoing plight. If Correa’s call for future economic autonomy has received enthusiastic popular support, it is precisely because the citizenry has grown aware of the painful contradiction of possessing a valuable resource base, but not experiencing the kind of economic growth that will raise living standards. Indeed, oil-exporter Ecuador continues to import about $1.5 billion a year in finished petroleum products because it lacks the refining capacity to meet domestic needs.

Following Quito’s bold May announcement to expel U.S. oil-giant Occidental Petroleum (which ultimately led to the rupture of its FTA talks), President Alfredo Palacio signed a series of energy cooperation agreements with Venezuela that will enable state-owned Petroecuador to develop fields capable of generating well over $1 billion in oil production. This measure marked the beginning of a closer commercial relationship between the two countries and is consistent with Correa’s firm commitment to reassert Ecuador independence over its natural resources. While he does not favor a full nationalization of the oil industry, Correa is determined to depoliticize Petroecuador and reshape it according to a more business-oriented model. At the same time, he also has underlined the need to channel oil revenues towards social programs through the renegotiation of contracts with foreign investors in the oil industry, such as Spain’s Repsol and Brazil’s Petrobras.

Correa’s aggressive platform, in conjunction with a vow to limit debt payment, clearly challenges IMF rules and the FTA model imposed by Washington, and seeks to reassert the country’s independence over its natural resources. Considering the alarming level of external debt that presently consumes a large part of Ecuador’s meager financial resources, a rapprochement with oil-rich Venezuela could represent a viable opportunity to break the web of financial dependency in which Quito has been entangled since the 1970s. The idea of an independent and strong Ecuador is also visible in Correa’s declaration to reinstall the Sucre as Ecuador’s national currency, putting an end to the dollarization of the economy.

What Changes Will Ecuador See in The Wake of a Correa Victory?

For the first time, the change in leadership presents Ecuador with an opportunity to define a clear political-economic path for the future. The country’s vulnerable position obliges it to build solid trade alliances in order to achieve its goal of a sustainable and equitable growth agenda. It also requires a broad national consensus regarding the institutional financial configuration that will be the basis for Ecuador’s future growth model.

However, a closer look at Correa’s background forces many to ponder the depth of his current loyalty to the Chávez-Morales-Castro anti-imperialist group. He is neither a military nor a peasant, but rather a white-collar descendant from Guayaquil, Ecuador’s most wealthy city. Correa has a master’s degree from the Catholic University of Leuven and a doctorate from the University of Illinois. Despite his strong commitment to act with a “whip hand,” some political observers would argue that his sympathies toward Chávez are merely a ruse to secure the poverty vote and that he will pursue a more centrist path once in office, which could prove dangerous for him, given the high turnover of recent Ecuadorian presidents who recanted their commitment to the marginalized classes once in office. If Correa is elected, we will soon know if he will put into practice his ideal of economic self-sufficiency or concede to a more pragmatic management style.

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This analysis was prepared by COHA Research Associate Magali Devic
October 13th, 2006
Word Count: 1600

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