By Catherine Conaghan*
What seemed like a certainty less than a year ago – Ecuadorian President Rafael Correa as a shoo-in for reelection in 2017 – now has given way to competing scenarios as the country’s economic crisis deepens. The game-changer has been the collapse in revenues from Ecuador’s principal export: petroleum. With prices for Ecuadorian crude hovering 50 percent below their 2014 average, Correa has had little choice but to slash the abundant government spending that has been the hallmark of his presidency. Ecuador’s use of the U.S. dollar greatly handicaps its capacity to adjust. Further aggravating the recession is the economic downturn of Ecuador’s principal external lender, China. Over $2 billion have been cut from the 2015 budget, and plans to shrink the size of the public bureaucracy are now under way. His decision in April to suspend the central government’s obligatory payments to the national social security system stoked anxiety about the fund’s future, and an announcement in June of plans to hike taxes on inheritance and real estate transactions sparked street demonstrations around the country. Indigenous and labor organizations mobilized in mid-August to protest these and other aspects of Correa’s style of governing. An estimated crowd of 100,000 people marched in Quito. Scores of protestors were detained and face charges related to the August mobilizations.
The months ahead will not be easy for a president accustomed to buoyant budgets and strong polls. As one of Latin America’s left-turn leaders, he pushed a state-centric economic model under which poverty declined and the middle class grew. His approval ratings since he took office in 2007 consistently scored among the highest of any Latin American president. (They dipped below 50 percent – as low as 42 percent – for the first time in 2015.) While Correa waxes and wanes on whether he really will pursue reelection, his party is pushing to amend the Constitution through legislation – without a referendum supported by over 80 percent of the public – to allow him a third term. The opposition strenuously opposes the move. The National Assembly appears headed toward a final vote on the matter in December.
From now until December, the reelection maneuvering and two possible outcomes will dominate conversations. Under one scenario, Correa and Alianza País will push ahead with the amendment, ignoring negative public reaction and repressing protests if necessary, and Correa will decide on his candidacy depending on his view of the economy and the state of the opposition. In a second and perhaps less likely scenario, Correa and his party may just abandon the reelection plan, concluding that the political costs are just too high. This would set off power struggles within Alianza País over who would head the ticket. Among the prospective frontrunners are former Vice President Lenín Moreno, current Vice President Jorge Glas, Production Minister (and former Ambassador to the United States) Nathalie Cely, and former Industry Minister-turned-critic Ramiro González. In the process, Correa will be looking to anoint someone loyal and capable of governing the country until he can return as a candidate in 2021. Under both of these scenarios, Ecuador is bracing for a volatile year ahead. Natural disasters – a possible volcanic eruption of Mount Cotopaxi and El Niño – could also fuel uncertainty, giving Correa a chance to shine and rally, or to fail and deepen doubts about his leadership. After eight years of relative political stability and economic good times, Ecuadorians are pondering whether a post-Correa era could be at hand and what it would mean.
September 8, 2015
* Catherine Conaghan is the Sir Edward Peacock Professor of Latin American Politics at Canada’s Queen’s University and a former CLALS Research Fellow.