Elections in Ecuador could mean progress for the people

• 14 Feb 2017
• Alex Anfruns

At the beginning of this year, two events of importance coincided in Ecuador: the presidential campaign official kick-off and the 10th anniversary of the Citizens’ Revolution. The country has experienced many great changes over the last decade at the hands of Rafael Correa, who has since gained international repute. After three terms, the former professor of economics is resuming his post as a university lecturer. On 19 February, the Ecuadorian people will be going to the polls to renew their trust in his project by casting their vote in favour of Lenin Moreno. Does his key opponent Guillermo Lasso stand any chances, and is his candidacy a threat to social advancements?

 

A decade of progress

 

Ecuador is a small country with 15.7 million inhabitants. Its recent history has been marked by an excessively export-oriented economy based on raw materials such as cocoa, bananas and oil. Under the Citizens’ Revolution government, education was promoted as a means to an alternative economic model. Transforming a system based on production into the Buen Vivir – Living well – model has meant investing in public infrastructure, such as roads, hospitals, and what are known as Millennium schools.

President Rafael Correa upheld education as the driving force of a new development model: “Ecuador has decided to base its development on the only source of inexhaustible wealth, human talent and know-how, in order to achieve a development that is both sustainable and sovereign”.

However, this development pattern, conceived as a long-term process, remains at the heart of political debates, and at times causes tensions. Can a country of the South, notably rich in raw materials, draw its people out of poverty without using its wealth to develop the public sector?

In truth, the Buen Vivir model deeply questions the dominant mindset behind development, according to which economic growth automatically generates improved living standards. So far this system has failed to solve the issue of social inequalities in Latin America. Other indicators provide a more accurate and figure-based view. Ecuador, which ranks high in the HDI – the Human Development Index – has achieved most of the Millennium Development Goals and is committed to making progress in the UN Post-2015 Agenda and the 17 Sustainable Development objectives.

The Government of Ecuador has enabled 1.3 million people to overcome poverty and successfully launched a major programme to modernise infrastructure and give new impetus to the economy. Eight hydroelectric power stations provide sufficient energy for the whole country and for the first time allow it to export excess production to neighbouring Colombia and Peru.

In trying to fight inequalities, the government tried to go to the source of the problem by dint of two initiatives: a wealth tax affecting 2% of the population, who inherit over $ 35,000; and the fight against tax evasion on an international scale. Unfortunately, the government had to withdraw the bill due to opposition from the conservatives, who contested the redistribution of wealth on grounds of principle.

In the wake of the Panama Papers revelations and his Report to the Nation in May 2016, Correa launched the Ethical Pact initiative to prevent candidates with money placed in tax havens to take part in politics. Unsurprisingly, the rightist CREO party refused the pact, as their leader Guillermo Lasso confessed to having investments in Panama “due to the barriers to free investment” in his country because of correismo, i.e. the Correa style economy. He nonetheless acknowledged paying more taxes in Panama than in Ecuador.

The stakes in this presidential race are so high for the future of the country and the region, that it is essential not to forget its recent past: between 1996 and 2006, Ecuador experienced an institutional crisis, with seven presidents taking office in the space of ten years.

Who bears the responsibility for dismantling the Ecuadorian state until the arrival of the Citizens’ Revolution? Let’s take a closer look at Guillermo Lasso, the chief opposition candidate. A short flashback will help understand the radical violence of neoliberalism.

 

Guillermo Lasso, the banker candidate

 

Guillermo Lasso is no newcomer to the country’s politics. Linked to the business community in Guayaquil, a region historically controlled by local oligarchies who became rich by exporting raw materials, Lasso has already held governmental positions. He played a significant role in the 1999 financial crisis popularly known as el feriado bancario – the biggest theft in the history of Ecuador. Its legacy is worth looking at.

On 8 March 1999, the government took a radical step by imposing a one-year freeze on the bank accounts of Ecuadorians with savings of more than $ 500. The most pernicious consequence of this measure was that over one million Ecuadorians were forced to migrate in search of work, especially toward the United States, Italy and Spain. This figure is equivalent to 7% of the population and 14% of the economically active population.

The huge wave of migration was accompanied by an upsurge in poverty, business closures, bank failures, unemployment and suicides. Meanwhile, the state was taking over private banks’ debts. Then President Jamil Mahuad, whose campaign was first funded by bankers, subsequently appealed to the banks to form his own government. The circle was closed. A wealthy government for the wealthy. Mahuad created a post tailored to Lasso: a Chief-Minister in charge of both Ministries of Economy and Energy.

Why did Lasso resign his post as Chief-Minister after only a month? Although almost unbelievable, it is because he disagreed with President Mahuad’s defense of a moratorium on payments to alleviate international debt. Torn between the interests of the Guayaquil Bank – which held debt bonds – and Lasso, the executive president and the government sought to temper the situation and weaken the blow on the population. Lasso made a timely move and disappeared from the political scene for three years. While he was tending to his own affairs, the Ecuadorians were seeking employment across the world, while at home continuing to stage demonstrations against successive governments and their vain promises.

 

In 2003, Lasso finally accepted a position as roving ambassador offered him by the Lucio Gutiérrez’s government, which served to strengthen ties with the United States under the George Bush administration. At the beginning of 2005, in the face of provocations and authoritarian drifts by Gutierrez, the popular revolt of the forajidos broke out. Gutierrez sent armed forces to suppress the upsurge, but years of frustration pushed demonstrators to carry on fighting for their rights, and on 20 April 2015 Gutierrez was forced to flee by helicopter. Congress announced his dismissal for “abandonment of post”.

In the October 2006 presidential elections, the forajidos movement massively supported Rafael Correa, a young economist who gained renown for his principles and insubordination to the IMF. After winning the elections with 56.67% of the vote, he proceeded to launch a participatory process, which lead to the establishment of a Constituent Assembly. Reinstating the people’s sovereignty was key to the success of the Citizens’ Revolution, as it finally enabled Ecuadorians to participate in rebuilding their country. After 10 years in power, Rafael Correa has not forgotten those who preceded him: “Although he undoubtedly pretends to cover the sun with his finger, Mr Guillermo Lasso is politically responsible for the feriado bancario” .

Today, staring unflinchingly into the cameras, Lasso pledges on the one hand to lower taxes, which would undoubtedly decrease the number of civil servants, and on the other hand to create a million jobs in the four years mandate, were he elected President. However, experts are sceptical about these measures, particularly as figures show a staggeringly low 410,000 unemployed people, a little over 5% of the economically active population. Despite the strong impact of the international economic crisis and the dizzying fall in oil prices from 2014 onwards, Ecuador’s unemployment rate remains slightly below the regional average of 8%. A quick look is enough to draw a parallel with other countries, as this chart from the ILO (International Labor Organization) shows:

 

Above all, the government denounces the opposition for doctoring unemployment figures and mixing up various categories of the economically active population in a region of the world where informal economy is rife. In Ecuador, this sector accounts for up to 43% of employees. The National Institute of Statistics also makes a distinction for precarious workers, whereas the opposition puts the unemployed and the underemployed in the same basket, distorting reality and manipulating figures.

Misleading information run by the opposition and private media against President Correa, while sugar-coating Lenín Moreno’s proposals, could end up contributing to a public amnesia over Lasso’s recent wrongdoings. But will Ecuadorians really forget the country’s economic disaster, which forced one million of their fellow-nationals to leave the country in the early 2000s? Bloggers have criticised Lasso’s proposal to create a million jobs for Ecuadorians, suggesting that he would send them to look for a million jobs abroad.

Correa’s re-election in 2013 by an overwhelming majority of 56.93% in the first round was evidence that the people support his long-term project. According to the latest polls, Lenín Moreno is in the lead in the first round with 34.3% of the vote against Guillermo Lasso with 22.9%.

 

Lenín Moreno, a candidate with a mission

 

As Vice-President of Ecuador from 2007 to 2013, Lenín Moreno succeeded in spreading awareness about and integrating the differently-abled to an unprecedented scale, having himself been the victim of an aggression which made him a wheelchair user since 1998. Moreno’s participation in recent governments make him the natural candidate to continue the popular project started by Correa. This is what emerges from his 88-page government plan.

The social aspect is central to Moreno’s manifesto, as he plans to strengthen public services and create the Plan terrnura – the Care project, a public service to care for pregnant women and infants. Redistributing wealth more efficiently is another challenge that Moreno wishes to address in order to further combat inequalities. Through a “human development voucher” he envisages to increase the monthly income granted to the most needy from $ 50 to $ 150.

Faced with one of the most serious scourges in Latin American countries arising from a patriarchal culture, Moreno promises to quash the staggering numbers of crimes against women by creating a national network against violence.

Lenín Moreno is putting forward a plan for 2025, with the aim of creating 250,000 jobs and increasing GDP by 10 percentile points. The emphasis will be put on the mining industry and reviving major projects in the south of the country in particular, which according to Moreno will generate 8,000 additional jobs and nearly 4 billion dollars in profit by 2025. Preferential loans for entrepreneurs, as well as simplified bureaucratic approaches in the key sectors of the economy are also part of the measures put forward by Moreno.

Re-stoking foreign trade is another crucial point in the future of the country. Moreno proposes to create a public bank of foreign trade in order to secure, finance and revive Ecuadorian exports. We must not forget that oil revenues are the mainstay of the Ecuadorian economy. The fall in oil prices by about 50% since 2013 plunged the country into recession in 2016, and the forecasts for 2017 are just as grim. It follows that Moreno, of the Allianza País party, aims to continue the overhaul of the country’s infrastructure started by the outgoing president, while increasing the quantity of refined oil, an industry he aims to boost.

But the Citizens’ Revolution is still alive and kicking. It had the merit of transforming the face of the country, while cultivating hope for the future. On the other side, with a difficult legacy and without a real social project to hand, the opposition is at a dead end. As election day approaches, the opposition could resort to vile tactics to promote personal interests. It would be a sad day if individual agendas nullified the hard-earned collective progress.

 

Source: Journal of Our America 22, Investig’Action

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