On April 22, 2007 Ecuador’s president, Rafael Correa, secured an overwhelming electoral victory, with 81.7 percent of Ecuadorians supporting his push for a special assembly to rewrite the constitution. Correa’s victory will bolster his overall political mandate, allowing Correa to pursue more radical economic and political reforms. Correa is seeking to reduce the power of Ecuador’s unicameral National Assembly and traditional political parties that control Ecuador’s judiciary and regulatory agencies.
Ecuador’s Supreme Electoral Tribunal will now set a date to elect 130 assembly members, who will meet for 180 days to draw up a new constitutional charter. The assembly will also be empowered to dismiss or change the three branches of government. The vote initially appeared to end the month-long political turmoil that had embroiled Ecuador, following the removal of 57 Ecuadorian legislators-more than half the total of 100-who were hindering Correa’s formation of a special assembly (Previous Report).
However, the following day, April 23, Ecuador’s Constitutional Court granted the ousted lawmakers request to block the Electoral Tribunal’s removal of opposition members. The court’s decision will provoke additional pro-Correa political protests. The magnitude and duration of any near-term political protests will be largely dependent on the Supreme Electoral Tribunal’s ability to elect 130 assembly members to rewrite the constitution. Should fired lawmakers successfully block this process, we anticipate violent protests to occur.
Correa’s government has threatened to arrest any lawmaker that attempts to reenter Congress unlawfully and has committed his government to changing the constitution through the special assembly.
Near-Term Threats to Ecuadorian Stability
We remain concerned that Correa’s electoral victories may produce dramatic and possibly harmful leftist economic and political initiatives that will damage Ecuador’s long-term economic and political growth. Correa’s desire to spend vast amounts of his country’s oil wealth on social programs, similar to Venezuela’s president, Hugo Chavez, will limit reinvestment and oil exploration, reducing long-term fiscal stability and economic growth.
Moreover, continued popular support for Correa’s political and constitution changes may encourage Correa to seek bolder political changes, also similar to Chavez. A political power grab however, will produce popular unrest in Ecuador, a state that has removed three elected presidents in the last decade.
In either scenario key political and economic indicators will foreshadow instability in these sectors: continued lack of oil infrastructure investment combined with increasing monetary contributions to populist social programs; and continued marginalization of the Ecuadorian legislature combined with increasing presidential powers.
We do not anticipate large-scale opposition protests to occur following Correa’s electoral victory. The overwhelming support given to Correa’s national assembly vote limits the near-term threat of social unrest via opposition parties.
Despite ongoing political disturbances, we do not see signs of broad or highly violent unrest directed against foreigners.
Challenges Persist Despite Electoral Victory
Despite Correa’s apparent electoral victory, his government still faces several challenges.
• Correa’s political party, Alianza Pais, has no representation in the National Assembly and is forced to rely on a collection of informal alliances. Moreover the reformed National Assembly is fragmented and combative, increasing near-term risk of political gridlock.
• The constituent assembly will likely consist of delegates from traditional parties that will seek to retain their current powers, limiting Correa’s ability to pursue political reforms.
• Continued social instability could provoke near-term unrest. Ecuador’s populace remains highly mobilized seeking political and social reforms that are slow in coming. Should traditional political parties fail to reach a consensus on needed reforms to Ecuador’s constitution, we anticipate social unrest to occur, followed by possible political destabilization.
• Civil society interest in government decisions and affairs was underscored following the removal of the 57 National Assembly legislators. Large demonstrations occurred in Quito in support of Correa’s government. Additionally, large demonstrations have followed Correa’s special assembly victory on Sunday, April 22.
Correa’s Government Receives Large Political Mandate
However, despite these concerns, Correa’s electoral victory will embolden his administration. Correa has identified several social and economic reforms his government will pursue in the near to mid-term.
• Correa will seek to increase state control over Ecuador’s natural resources. The Ecuadorian government is currently in the process of renegotiating its contracts with private oil and gas firms to give majority stake to the Ecuadorian government.
• Correa is unlikely to renew the lease on the US’s base in Manta, which is a forward operating location for drug surveillance flights. Correa considers US presence as an affront to Ecuador’s sovereignty
Correa will likely push reforms to the Central Bank of Ecuador and sever ties with the International Monetary Fund (IMF), which he has long criticized for its conditionality statements attached to loans.
