Latin America Advisor

A Daily Publication of The Dialogue

What Will Result From Ecuador’s Political Turmoil?

Photo of Lasso Ecuadorean President Guillermo Lasso dissolved the National Assembly in a move allowed by the constitution that also will end his term and require new presidential and legislative elections. // Photo: Ecuadorean Government.

Ecuadorean President Guillermo Lasso on Wednesday triggered a constitutional measure to dissolve the National Assembly and rule by decree until new presidential and legislative elections are held. Lasso invoked the measure as lawmakers were preparing to vote on whether to remove him from office over embezzlement accusations, which he denies. The move marked a moment of heightened political turbulence in a country that has experienced rising violence and skyrocketing homicide rates amid increasingly powerful narco-trafficking groups fighting for territory. What are the implications of the development for the president, and for the country? What types of decrees is Lasso likely to issue? When can elections be expected, and what will come out of them? How will the political instability affect Ecuador’s economy and investment in the country?

Eileen Gavin, principal analyst for global markets and the Americas at Verisk Maplecroft: “Facing likely impeachment at the hands of the radical left-wing opposition allied to former president Rafael Correa (2007-2017), conservative President Guillermo Lasso reached for the ‘nuclear option’ of dissolving the National Assembly, thereby triggering a snap general election within six months to select a new government and legislature to complete the current term to May 2025. In the run-up, Lasso is authorized to rule using limited decree powers, and in theory he (along with the current crop of assembly deputies) can seek re-election. Following a strong performance for the left-wing Citizen Revolution (RC) party in local elections in February, our base case is that Correísmo is now set to return to power, barely two years after it was roundly rejected in 2021. There is no great yearning for the return of disgraced former President Rafael Correa (who is currently self-exiled in Belgium to avoid a corruption sentence). His proxy candidate in 2021, economist Andrés Arauz, runner-up to Lasso, is again the most likely presidential nominee. Local business groups suggest that Arauz is more of a moderate, consensual figure than the highly polarizing Correa–and less likely to adopt Correa’s interventionist and dogmatically anti-private sector stance. Nevertheless, the prospect of a new leftist government will set off alarm bells, not only on the part of domestic and foreign companies with assets and investments on the ground, but also external bondholders concerned about the sovereign’s still-weak debt position after the last big ($17.4 billion) restructuring of August 2020.”

Marc Becker, professor of Latin American history at Truman State University: “The intent behind the innovative ‘muerte cruzada’ provision of the 2008 constitution was to resolve problems with legislative deadlock, not to bail out the political fortunes of a deeply unpopular president. After almost two years in power, Lasso has very little to show for his time in office. Theoretically, ruling by decree during the next six months would allow Lasso to force through the right-wing agenda that failed to get him elected in his previous bids for top office, and that he was unable to implement through the legislative process. Doing so would most likely also result in failure and probably lead to him being removed from office through extraconstitutional means before new elections could be convoked. There is little chance that Lasso can be re-elected. The best outcome now would be that he simply serves in a caretaker role and calls for new elections as soon as possible to usher in a new government that is more attuned to the needs of society at large and more willing to rule on its behalf. Lasso’s previous track record casts doubt on his willingness to do so, and that outcome could have more easily been achieved by allowing the impeachment process to run its course. Before yesterday’s actions, Lasso was likely to go down in Ecuador’s history as one of the country’s worst presidents, which is remarkable for a country that has had so many bad ones. Now he is only assuring his position at the bottom of that list.”

Diego Andrés Almeida, managing partner at Almeida Guzmán Asociados: “It is too early to know what the outcome of the constitutional measure known as ‘muerte cruzada’ will be. It remains to be seen whether this strategy will be effective, considering there is no precedent for its use in the history of Ecuador. Even without the National Assembly, the president will have a difficult—if not impossible—task of governing in the next six months. Until the new officials take office, the president can issue laws considered to be of economic urgency without the prior approval of the constitutional court. The president’s low popularity is also a cause for concern, considering that regardless of the issuance of this constitutional measure, he may still be illegally overthrown. The president is obliged to notify the National Electoral Council so it can call for elections within seven days. The elections will take place in the next six months. At the time of writing, no candidates have expressed their will to participate in the elections. However, there is a high possibility that candidates associated with Rafael Correa’s movement will have a good chance of winning the elections, despite Otto Sonnenholzner’s strong chances if he chooses to run. The current political instability is a cause of concern for investors, who will likely choose to withhold investment until the new elections are held.” 

Alberto Acosta Burneo, editor of the Weekly Analysis in Guayaquil: “President Guillermo Lasso on Wednesday decreed the ‘cross-death’ to save himself from an impeachment trial in the National Assembly. Within a seven-day period, early presidential and assembly elections must be called, and within a maximum of six months, the new authorities must assume their functions for the remaining time of the current term (until May 2025). The big question is: who benefits from this decision? Only time will tell, but it is possible to predict that Lasso’s low popularity will make it difficult for him to be re-elected. However, some parties and movements will lose the representation they currently have in the National Assembly because of internal problems, division and the lack of ability to rebuild their forces in such a short time. The cross-death allows the president to legislate by decree. However, these decrees require prior approval from the constitutional court and, when the new assembly takes office, they can be annulled. The risk is that a future assembly dearth of a ruling party majority may eliminate a large part of what was approved by decree. The most optimistic scenario is that Lasso, without opposition from the assembly, will be able to carry out profound reforms. However, it is unrealistic to think that in six months Lasso can accomplish what he could not in two years. During this ‘special period,’ the president will govern without the National Assembly. This does not mean a free pass on any kind of reform. Rather, the filter has now shifted from the assembly to public opinion. The proposed reforms will be discussed and modified in the streets. The risk is that this may even involve the use of violence. Uncertainty is the new norm.” 

Grace M. Jaramillo, adjunct professor in the School of Public Policy and Global Affairs at The University of British Columbia: “The movement to remove President Lasso from office has moved fast in the last two weeks. Until recently, the opposition has been purposefully clumsy filling out the formalities of the impeachment effort, even to the point of misspelling President Lasso's full name. The strategy had the objective to win over time and conclude new political appointments in the judiciary, the Council of Political Participation and Social Control, key provinces and municipalities and, finally to elect a president and vice-presidents of the National Assembly that could seal President Lasso's fate. Against the real possibility of a yes vote to remove him from office on Saturday, President Lasso saw no other choice that calling to the ‘cross-death scenario,’ a recourse in the Ecuadorean constitution allowing the executive and the legislature to foreclose both branches of government and call anticipated elections. The implications for Ecuador's political stability are profound. With general elections within 90-days’ time, the political pressure to mobilize the maximum number of votes to elect not only a new president but a clear majority at the National Assembly, the government has limited time to make and imprint that change the course of support. His approval ratings run as low as 15 percent. Governance during the transition would be permanently contested with an increasing possibility of political violence from the different factions. Correismo, the political movement, stands to win the most in this situation since they control local governments of the two largest provinces plus a wide net of grassroots organizations. Ecuador is definitely entering the most difficult two years of its contemporary political history.” 


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