Highlights:
– Constituent assembly approves new constitution proposal from President Correa
– Draft increases presidential powers over term lengths, Congress and Central Bank
– National referendum scheduled for September 2008
On July 24, 2008, a constituent assembly approved President Rafael Correa’s constitutional draft, which includes provisions to adjust term lengths and increase presidential powers over the Congress and the Central Bank. President Correa, an economist by trade since coming to power in January 2007, insists the reforms are necessary to regain power from the country’s traditional, and notoriously defunct, political elite, as well as gain greater control over monetary and credit policy to battle unemployment and inflation. Correa’s previous high-employment rate has suffered in recent months due to ongoing public frustrations over unemployment, and his decision in early July 2008 to seize multiple companies that he claims were linked to past bank failures (Previous Report).
The new draft will be put up for a vote in a national referendum in September 2008, following the style of other leftist Latin American leaders, Venezuelan President Hugo Chavez and Bolivia’s President Evo Morales. While opposition leaders fear the constitution concentrates power too tightly in the hands of Correa, his high approval ratings and less radical brand of socialism may lead him to more success than his fellow leaders (Previous Report, Previous Report).
Up For Vote
The 444-article proposal plans to increase presidential powers, by adjusting term lengths to allow Correa to run for two new, consecutive four-year terms, theoretically allowing him to remain in office until 2017. The president would also be allowed to dissolve Congress within the first three years of a new term, however general elections must be re-held for the presidential seat as well. Congress is also granted this power, allowing the body to call for new presidential elections but must hold elections for its own seats at the same time. While these new powers appear to be a check-and-balance over two branches of Ecuadorian government, the “dissolving powers” will likely only lead to increased political instability in the long-term; Congress and the president would likely utilize this threat as a leveraging tool to pass their own polices.
New powers over the Central Bank have also gained attention, as the president will be granted powers of issuing financial data and controlling how many US dollars, the base of Ecuador’s economy, are to be issued into the market. Critics fear Correa will politicize this institution, as he has already pressured the Bank to hold back reports for 2007 figures, likely in fear of releasing lackluster figures representing the nation’s small economic growth.
Assembly Approval and Dissenting Critics
The draft won approval on July 24, in a 94 to 32 vote by the constituent assembly convened to write it. Correa’s Alianza Pais party currently is in control of more than 60 percent of the 130-member assembly, so the proposal’s passing was not a surprise.
However, critics, including Ecuador’s top Catholic official, have voiced concern over a few of the draft’s provisions. Monsignor Antonio Arregui, the president of the Ecuadorian Episcopal Conference, stated that the constitution is “incompatible” with the Roman Catholic faith due to its surprisingly liberal stances on abortion and same-sex unions. However, he announced on July 28, 2008 that the Church does not plan to actively campaign against votes for the draft, a small success for Correa. Over 90 percent of Ecuador’s nearly 14 million people are Catholic, and a denouncing message from the Church would have impacted Correa’s plans.
Former President Lucio Gutierrez, stated that the nation “want[s] a president of a democratic republic, not a monarch in power. A former vice president, Leon Roldos, resigned in protest from the opposition party involved in the assembly before the vote, stating, “I will not be part of this… clear slants of absolutism and totalitarianism.”
Future Outlook
The vote must now pass a national referendum on September 28, 2008. If the constitution passes, new presidential elections, which Correa would likely win, would take place in 2009 instead of 2010 as currently scheduled.
The draft’s successful passage remains uncertain at this time. Despite ongoing economic struggles, Correa does maintain a strong enough approval rating, 53 percent in May 2008 polls, to secure a victory if based solely on opinion numbers. However, President Chavez’s attempts in December 2006 and ongoing difficulties over President Morales’ upcoming August 2008 vote respectively indicate that Latin American voters may not be as willing to vote in favor of a strengthened central government as once believed.
Additionally, outside investors are spooked by recent government actions, including the nationalization of several businesses in July 2008 and the 2007 decision to increase government control of windfall oil profits from 50 percent to 99 percent. As such, the new control over the Central Bank will likely generate caution from foreign investors in the near-term, unintentionally complicating Ecuador’s already sagging economic situation.
If the draft is approved in the national referendum, it will be the 20th constitution for Ecuador since 1830, reinforcing the pattern of politically instability that will likely plague Ecuador in the mid to long-term.
