Are Ecuador-United States Relations Looking Brighter?

Q: Ecuador’s President, Rafael Correa, on Oct. 21 requested resignations from his entire cabinet, a not unusual move but one that suggests changes at the top levels of government will occur by the end of the year. In a separate announcement, Ecuador said that Production Minister Nathalie Cely will step down in December to become the South American nation’s ambassador in Washington, starting in January, more than six months after the two countries expelled each other’s envoys over a Wikileaks dispute. What is driving the latest shakeup in Correa’s cabinet, and in which posts do you expect to see the most significant changes made? Where do relations stand between Ecuador and the United States today, and how might Cely’s arrival in Washington affect ties between the two countries?

A: Efrain Baus, charge d’ affairs at the Embassy of Ecuador in the United States: “The cabinet changes announced by the President are part of a common process in Ecuador that typically occurs at the end of the year and is designed to improve the performance of the different executive ministries. The President announced the cabinet shake-up after a national holiday celebrated on the 2nd and 3rd of November. Some ministers leaving their old positions will be reappointed to perform different tasks under the new government structure. President Correa’s appointment of the current Minister of Production, Natalie Cely, as the new ambassador to the United States reflects his approval of her management of the ministry and confidence that her academic background (Harvard’s JFK School) and professionalism will contribute to the success of her work abroad. Restoring diplomatic ties with the United States is one of President Correa’s top foreign policy priorities. By designating Ms. Cely, an economist and a leading member of his cabinet, President Correa expects to rebuild a relationship that is mutually respectful and constructive for both countries. With the appointment of new ambassadors, the bilateral relationship between Ecuador and the United States is stabilizing. The nomination of Adam Namm as the new U.S. ambassador to Ecuador and the approval of Nathalie Cely as the new Ecuadorian ambassador in Washington are important steps in restoring healthy partnerships. Ambassador Cely will promote a dynamic relationship with both the U.S. Congress and the Obama administration. She will also pay close attention to the linkages Ecuador has developed with the states, assist Ecuadorian immigrants living in the U.S., and look to develop relationships with civil society groups and academics.”

A: Ramiro Crespo, the president of Analytica Securities in Quito: “One of many political traditions that President Rafael Correa has maintained is the annual, year-end mass resignation of the cabinet. This silly custom has been one more reason that one of Latin America’s least stable states has suffered from policy instability, under Correa as much as under any of his predecessors. This year, however, the move will provide an opportunity to send the right signals to investors. There are a few reasons for careful optimism. The two changes in the cabinet include the resignation of Economy Minister Katiuska King, who made up for her limited competence with particular intransigence. Production Minister Nathalie Cely, the business sector’s favorite, will also depart. Pending the approval of the exchange of ambassadors, she will head to Washington. The plan signals the importance Correa sees in making amends with the United States after expelling ambassador Heather Hodges in April, as well as his sacrifice of an important member of his cabinet to win back foreign investors. To make up for the abysmal level of FDI seen under Correa, he will need to flank the nomination with other credible measures to shore up confidence. The exemption of dividend payments for foreign shareholders amid a plan to more than double the currency export tax is such a step, although we question the wisdom of this tax altogether. It would also be positive were some of the more radical members of his cabinet to leave, although it is doubtful that Foreign Minister Ricardo Patiño and Planning Secretary René Ramírez will exit.”

A: César Montúfar, a representative of the Pichincha province in the National Assembly and professor at Simon Bolivar Andean University: “Rafael Correa aims to win his third election in January of 2013. As a result, the government will dedicate the last quarter of 2012 to being ready for the campaign, with five strategies to achieve that goal. 1) Consolidation of media hegemony, for which the government has accelerated the judgments pending against the media and journalists, as well as final approval of the Media Law. 2) Approval of a tax reform that will ensure sufficient resources in the treasury to maintain the high levels of spending on public works and subsidies, which constitute the base of support for the government. 3) Consolidate executive control of the restructuring of the judicial system that would allow the government to appoint activist judges. 4) Promote Correa’s international leadership, highlighting him as a radical representative of 21st century socialism. 5) Rearranging the cabinet to ensure greater presidential control over the administration’s decisions in all areas. The Correa administration’s strategy is to turn 2012 into favorable terrain for the re-election battle. While the ‘permanent campaign’ has been one of hallmarks of Rafael Correa’s government, this will intensify when the electoral campaign official starts in the middle of next year.”

A: Walter Spurrier, president of Grupo Spurrier and director of Weekly Analysis in Guayaquil, Ecuador: “A year-end cabinet shakeup is customary in Ecuador, although it makes little sense under a presidential system. On this occasion, it is of particular importance, as 2012 is an electoral year. The conformation of the new cabinet will give a hint of whether the president’s electoral strategy is to move to the center or further left. Two key ministers to leave the cabinet are Nathalie Cely and Katiuska King, both coordinators of the ministries having to do with economics (micro and macro economics, respectively), and who often feuded in Cabinet meetings. Cely has already introduced Santiago León, customs head, as her successor. León is no leftist ideologue, but he is a technocrat with no relevant business experience. Her departure is no demotion, as she is to work for better trade relations with the United States. Katiuska King expressed some bitterness in her resignation, as if she had been overruled in some key issues. This is surprising, as King had previously been at Senplades, and in recent months this planning body seemed to have moved to center stage in policy-making. The draft of the anti-trust law the president passed though the Assembly was elaborated by Senplades; a previous draft prepared by the Ministry of Industries was shelved. Who replaces King is key: whether a more pro-business figure, or someone else from Senplades. A third group within the administration is that of Foreign Affairs Minister Patiño, essentially anti-American and aligned with Chávez. Will Patiño be moved to a lower profile role?”


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