Latin America Advisor

A Daily Publication of The Dialogue

What Will Correa’s “Steamroller” Bring Ecuador?

Presidency of Ecuador / CC BY-NC-SA 2.0

Q: After trouncing his opponents to win re-election as Ecuador’s president earlier this month, Rafael Correa vowed that his government would be a “legislative steamroller” that would make his administration’s socialist reforms permanent. What are the most significant reforms that will come out of Correa’s new term? Will Correa respect the rights of the opposition as he has promised? How will Correa’s presidency affect Ecuador in the long term?

A: Nathalie Cely, Ecuador’s ambassador to the United States: “In his new term, President Correa will continue to place the economic and social well-being of Ecuadoreans as his top priority. During his first term in office, the president invested heavily in overhauling the country’s infrastructure, education, health care and legal frameworks with the goal of ensuring a strong foundation for long-term stability and growth. These policies have already reduced poverty from 37.6 percent in 2006 to 27.3 percent in 2012, and contributed to Ecuador becoming the third fastest-growing Latin American economy. The next challenge is to build on these accomplishments and ensure that the positive trends continue. Continuing to strengthen the business and investment climate will be one of the top goals of the president’s second term. New reforms will be studied and put forward to help to diversify the economy away from its dependence on oil. We will seek to strengthen our domestic legal framework to further address the needs of investors while protecting the rights of our citizens and environment. And we will continue to invest in the human talent of our people, such as through programs for early childhood education and improving the quality of public services, with an emphasis on social programs. Through these efforts we can continue to build a strong and vibrant economy that creates opportunities for all in Ecuador.”

A: Osvaldo Hurtado, emeritus member of the Inter-American Dialogue and former president of Ecuador: “The ruling party’s election to two-thirds of the seats in the National Assembly culminates the process of concentration that has allowed President Correa to put all the functions and organs of the state, including the judiciary, under his control. The exercise of absolute powers by the president, in violation of articles 3, 4, 5, 6 and 7 of the Inter-American Democratic Charter, cannot be justified with the argument that such an arbitrary process has been ‘legitimized’ through popular vote. President Correa has announced that he will radicalize the revolution that he has carried out since he took office six years ago. The ample majority of seats that Correa’s party won in the National Assembly will allow the ruling party to impede any auditing of their actions and will allow it to obtain legal and constitutional reforms to suit their own interests. In order to increase his control of citizens and society, Correa has sought lawmakers’ approval of a communications law and penal code which would limit rights and freedoms, mainly free expression. With regard to the economy, we should expect the growth of the public sector, increased restrictions on businesses and a lack of interest in foreign investment. In international affairs, Ecuador’s nationalistic, third-world and anti-imperialist policies will continue.”

A: Ramiro Crespo, president of Analytica Securities in Quito: “With unprecedented political and economic power, Rafael Correa now has the chance to prove whether he’s a new Nelson Mandela or a junior Hugo Chávez. Unfortunately, he’s already started off in the wake of the latter, decreeing price controls on several dozen basic foods. This bodes badly for the coming four years, particularly if the upcoming land reform law also undercuts agricultural production. Media and police reforms risk more repression. Correa has won sympathies overseas for having brought political stability to turmoil-prone Ecuador, and because of his obvious great popularity. But neither does stability prove him a statesman, nor popularity that he is a democrat. Given his gargantuan resources, results so far have been disappointing. Per capita, Ecuadoreans are now further away from Latin America’s average GDP than in 2006. For all his soothing latest words, the real Correa is not the one who applauded a coherent, democratic and conservative opposition; he is the one who risked financial stability by imposing punitive taxes on banking when that same rival outdid him with a campaign pledge in December. Unencumbered by checks and balances, Correa could now create the much-needed legal stability that foreign investors need. This would help attract serious oil and mining companies to Ecuador, as well as investors who have avoided this country as if it had a dangerous tropical disease. But to achieve this, Correa would have to retrace many of his own steps, including haphazard tax changes and repression, that have alienated both supporters and opponents of oil and mining simultaneously. Real sovereignty could be achieved by loosening China’s hold on financing and promoting the stability of the use of the dollar.”

A: Marc Becker, professor of history at Truman State University: “Correa appears positioned to accelerate policies to develop Ecuador’s extractivist economy during his new term. These promises worry Ecuador’s social movements, particularly those associated with rural and Indigenous communities that will be most negatively affected by these policies. Undoubtedly, these goals of development at all costs will continue to result in unprecedented economic growth rates that have lowered poverty and shrunk inequality. Environmentalists, however, are concerned with the potential long-term consequences of these policies, and whether they will contribute to a sustainable society. Those to Correa’s left complain that the policies are more capitalist than socialist in their orientation. Unfortunately, when Correa talks about respecting the rights of the opposition he is referring primarily to those associated with Guillermo Lasso, rather than those who challenge him on economic development issues from the left. These leftist dissidents face charges of terrorism and sabotage, and will probably continue to do so during his new term. The only thing that conservatives have to fear from a Correa presidential administration is that he has been more effective than they have been in implementing extractivist economic development policies. Correa is a very effective politician, and has beaten other power brokers at their own game of following populist and clientelistic policies. The result is that these conservatives have been relegated to a political irrelevancy.”