Ecuador: Referendum Marks Critical Juncture for Moreno and Correa

By John Polga-Hecimovich*

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Current President of Ecuador Lenín Moreno (left) and ex-President Rafael Correa (right) during the presidential transition last spring. / Micaela Ayala V / ANDES / Flickr / Creative Commons

A national referendum in Ecuador this Sunday appears likely to give a boost to President Lenín Moreno in his political struggle against his predecessor, Rafael Correa (2007-2017).  The central item on the seven-question ballot will be whether or not presidential term limits should be reinstated into the Constitution – an initiative that Correa, who would like to run for a fourth term in 2021, is campaigning against.  The country appears poised to move on from the thrice-elected yet polarizing Correa to the more conciliatory Moreno; at the time of writing, citizens resoundingly endorse all seven referendum questions, with no question polling lower than 66 percent approval.  A “yes” vote on term limits would end Correa’s future presidential aspirations and position Moreno – Correa’s hand-picked successor – as the standard bearer of the political left in Ecuador.

  • The feud between Moreno and Correa – and within their ruling Alianza PAIS (AP) party – has been building for nearly a year and a half. Last November, one of Moreno’s closest advisors, Eduardo Mangas, alleged in a leaked recording that Correa hoped Moreno would lose the election.  Correa purportedly provided no logistical or financial support for his chosen successor while saddling him with the deeply unpopular Jorge Glas as running mate.  According to Mangas, Correa preferred that AP lose the presidential election and instead govern through its control of the vast state bureaucracy and National Assembly – with Correa returning to the presidency in 2021.  Eking out a narrow victory (51.6 percent against Guillermo Lasso’s 48.8 percent), Moreno upended this plan.
  • The morenista and correista factions have divided the AP since Moreno took office in May 2017. Vice President Glas, a Correa ally accused of taking $13.5 million in bribes from the Brazilian construction firm Odebrecht, was sentenced to six years in prison and impeached as part of Moreno’s campaign against corruption.  The AP Secretary, a correista assemblywoman, tried to remove Moreno as party head after he alleged the party put a hidden camera in his office.  Correa and 28 legislative deputies have left the party and formed what they are calling the “Citizen’s Revolution Party.”

Moreno took office facing a polarized political environment and daunting fiscal deficit and weak GDP, but his sound policies and astute political strategy have given him the highest approval ratings in Latin America.  His focus on the popular valence issues of corruption and re-election – about which citizens will usually share a common preference regardless of ideology – has also helped distract voters from the tepid economy.  The referendum is a particularly smart gambit.  It proposes seven different changes that would reverse actions taken during Correa’s rule – and that happen to enjoy broad popular support.  Instead of trying to push them through established institutional channels staffed with correistas, like the National Assembly or the courts, the President is turning directly to the public to give the measures legality.

Absent any bombshell announcements or drastic changes in public opinion, Moreno looks set to coast to victory in the referendum, quite remarkably establishing him as the country’s most powerful politician.  However, he faces a number of challenges to governance over the remainder of his four-year term.  The defection of Correa and his faction from Alianza PAIS left him with only 46 seats in the 137-member National Assembly.  This means Moreno’s bloc will continue to depend on ephemeral voting alliances with the center-right to govern – exactly like much of the 1979-2006 period when no popularly elected president finished his term.  Moreover, after 2.7 percent GDP growth in 2017, the IMF predicts that Ecuador’s economy – vulnerable because of its dependence on oil exports – will grow by only 2.2 percent in 2018 and 1.7 percent in 2019.  Moreno should enjoy his victory on Sunday, but he will soon face challenges greater than Rafael Correa: long-term governance in a country that has long proven averse it.  Whether he is up to the challenge remains to be seen, although he has so far proven resourceful.

February 2, 2018

*John Polga-Hecimovich is an Assistant Professor of Political Science at the US Naval Academy.  The views expressed in this article are solely those of the author and do not represent the views of or endorsement by the Naval Academy, the Department of the Navy, the Department of Defense, or the US government.

Local Ownership in Peacebuilding, Colombian style

By Angelika Rettberg*

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“Colombian peace is our American peace.” / urban_lenny / Flickr / Creative Commons

Amid the increased political juggling in Colombia as the government’s peace deal with the Fuerzas Armadas Revolucionarias de Colombia (FARC) has advanced, one key lesson is that the nature of “local ownership” will have an impact on its success or failure. After the razor-thin victory of the agreement’s opponents in the referendum on October 2 propelled the country into uncertainty, its proponents – buttressed by the informal deadline created by the Nobel Peace Prize being awarded to President Juan Manuel Santos on December 10 – tried a different track. Instead of calling for a new referendum, as many expected, the government appears to have learned its lesson about the perils of direct democracy and sent the new agreement to Congress, where it was approved by an undisputed majority in both houses. A Constitutional Court ruling on December 13 gave Congress fast-track authority to approve required changes in the law, paving the way for implementation. Meanwhile, FARC fighters have begun moving toward the more than 20 camps in which complete disarmament is expected to conclude by June 2017.

The country’s shifting approach to the accord has been caused by uneven local ownership. As scholars and practitioners alike underscore, broad participation in transitional countries must be involved in order to achieve sustainable peace. To avoid difficulties such as those experienced by Guatemala, where many felt the agreement was imposed by international actors, societies need to feel that agreements and the resulting commitments have been developed bottom-up, or at least with domestic actors. The Colombian process was touted as one “by Colombians for Colombians.” International participation was intentionally kept to a low profile and key players in the negotiations were all Colombians. But when the results of the October referendum temporarily pushed the country back to square one – “Nada está acordado” – it became clear that local ownership in this case had a broader meaning: Paradoxically, submitting the agreement to the popular will did not cause collective responsibility behind it to surge but rather gave a boost to people’s sense that they had the democratic right to reject the deal altogether. Similarly, despite the actions of Congress and the Constitutional Court, debate on how the agreement will be translated into action is taking place within and among the domestic institutions, including the Presidency, Congress, the courts, and several control organisms.

Colombia’s peace deal has powerfully posed the question not of whether to include popular opinion in peace deals, but how to do so in the most constructive way. The result will be very much a reflection of the Colombian people’s and their institutions’ capabilities to negotiate and establish priorities and to design policy accordingly. After all, peace is a public policy. The Colombian case thus holds many lessons for peacebuilding in general, and for the potential tensions and dilemmas needed to balance peace, majoritarian democracy, public opinion, and justice. The agreement itself may turn into a moving target as different sectors on all sides of the debate seek to steer implementation toward their interests. Regardless of what happens, the quality of “local ownership” will be central to determining the shapes and contents – and the durability – of Colombian peace.

December 22, 2016

* Angelika Rettberg is a Professor of Political Science at La Universidad de los Andes in Bogotá.

Brexit: Limited Implications for Latin America

By Arturo C. Porzecanski*

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Photo Credit: Elionas2 / Pixabay / Creative Commons

The June 23rd British referendum result – a 52-to-48 percent vote to leave the European Union (EU) – has roiled the world’s leading financial markets, but contrary to many opinions issued in the referendum’s wake, the economic and financial implications of Brexit for Latin America have been either mild or favorable.  Hard line Brexit statements made earlier this month by UK Prime Minister Theresa May, and various rebukes from policymakers on the Continent, have had financial-market repercussions for the pound.  Most notably, sterling has fallen sharply, and it is now down more than 15 percent from its high on the day of the fateful vote, plummeting to three-decade lows against the dollar.

  • The market reaction initially led to a mostly regional (UK and Europe) correction in stock prices. Even this was short-lived: for example, the FTSE 250, an index of domestically focused UK firms, at first dropped by 14 percent but recovered fully by early August – and has since been trading above the pre-referendum level.  Moreover, the UK recession many feared did not materialize, at least not during 3Q16.
  • Financial markets priced in fairly quickly the conclusion that the Brexit shock would lead to greater dovishness among the world’s major central banks. Most relevant to Latin America and the emerging markets (EM) generally, the Brexit helped to persuade the U.S. Federal Reserve to delay its tightening until at least the end of 2016.  While Latin America’s trade and investment ties to Europe are not insignificant, the region’s major economies are far more dependent on the health of the U.S. economy and on the mood in the U.S. financial markets, and secondarily on trends in China.
  • If the UK and the Eurozone had stumbled and were headed for a recession, however, one likely casualty of Brexit would have been a noticeable drop in world commodity prices, with strong implications for the major economies of Latin America. While commodity prices have softened somewhat (non-oil commodities have averaged 2¼ percent lower since the Brexit vote, and oil has traded 7½ percent below), confirmed expectations of loose monetary conditions in the U.S. and Europe during 3Q16 have more than compensated.  This is why most EM stocks, bonds and currencies have rallied, with the parade led by the Brazilian Real (BRL), so far the best-performing of 24 EM currencies tracked by Bloomberg (up about 20 percent year-to-date).

The medium-term implications of Brexit for Latin America will depend on how much “noise” emanates from London, Brussels and other European capitals during the negotiation process (likely, 2Q17-2Q19).  Prime Minister May has now made three statements that define her bargaining position: Article 50 (exit) negotiations will begin by next March; the imposition of migration controls on EU citizens coming to the UK is non-negotiable; and the UK will no longer be under the jurisdiction of the European Court of Justice.  The latter two points mean that Britain cannot remain a member of the single market, and is therefore committed to forging a customized free-trade agreement with the EU, which could sow uncertainty and thus depress economic growth in Europe and beyond.

The most probable scenario – slow and halting Brexit negotiations, with progress hard to achieve until close to the end (in 2019) – will encourage uncertainty and speculation among economic agents and thus will be a drag on economic growth especially in the UK, and much less so in the rest of the EU.  However, it need not generate the kinds of waves that will reach, never mind derail, Latin America’s economic trajectory.  It is much more likely that what does or does not happen in Buenos Aires, Brasilia, Caracas or Mexico City, and above all in Washington, DC – courtesy of the Fed, the White House, and the U.S. Congress, in that order – will overshadow just about any headlines generated by the Brexit negotiations in Europe.  There is room for Latin America to clock higher GDP growth numbers in the years ahead when compared to the disappointing regional averages of 1 percent growth in 2014, zero growth in 2015, and a contraction of about -0.6 percent in the current year (as per IMF estimates).  This assumes that the Fed’s tightening is gradual (namely, no more than 0.25 percent increases in the Fed’s target rate per trimester) and that the UK’s divorce proceedings are not overly hostile.  This scenario foresees that creditworthy governments, banks and corporations in Latin America will retain access to the international capital markets on reasonable terms, despite some initial retraction in investor interest ahead of, and right after, the resumption of the Fed tightening cycle.

 October 17, 2016

*Dr. Porzecanski is Distinguished Economist in Residence at American University and Director of the International Economic Relations Program at its School of International Service.

Colombia: University Professors Appeal for post-Referendum Solution

By Eric Hershberg and Fulton Armstrong

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At a march for peace in Bogotá, Colombia, a woman holds a sign that states, “We are the generation of peace.” / Agencia Prensa Rural / Flickr / Creative Commons

A group of Colombian university professors have organized an appeal to their colleagues in and outside the country to sign a petition “requesting an effective solution without delay” to overcome the impasse created by rejection of the peace accord on October 2.  The text of the petition, which currently has more than 1,700 cosigners, is as follows:

[We] university professors, from different disciplines, universities, and regions, join our voices with those underscoring the urgent need to reach, as soon as possible, a final Accord to end the conflict with the FARC.  Delay poses enormous risks.  It is essential to set, with all urgency, an agenda for talks limited to points requiring discussion, with concrete and viable proposals for modifying the existing text.  Reflecting the extremely close results in the October 2 plebiscite, the agenda should address the concerns of the No voters, who won the vote, while respecting the voice of the equally numerous Yes voters, who supported a text that cannot be wholly reevaluated, as well as those who did not speak at the polls.

The result of the plebiscite on Sunday [2 October] provides the unique opportunity to adjust the existing Accord in a way that draws a majority of society.  Capitalizing on that opportunity is the responsibility of all sides:  the FARC, the representatives of No, and those of Yes.  The plebiscite leaves no doubt – and the mobilizations in the streets and social media confirm – that society demands that all be flexible in their positions.  That’s what the youth demand as they convoke marches and other actions to push a quick Agreement, and which we support without hesitation.

The professors are an important voice of society and, as the statement explicitly states, of young people throughout the country who aspire to have a peaceful future.  The statement dodges specifics on what needs to be changed in the accord, but its assumption that sufficient pressure can be brought on all parties, including those who opposed the accord, to find common ground is credible.  Appeals such as this – unprecedented in the sheer number as well as in the wide range of institutions, disciplines, and regions that are represented – will be a good test of the capacity of Colombian civil society, such as the Academy, to push compromise, and for others, such as the economic elites, to achieve compromise.  Agreement may emerge, for example, to move discussion of certain social issues, such as those that riled some religious groups, into another venue so they aren’t an obstacle to agreement on war-and-peace issues.  The professors have their finger on the pulse of the nation and grasp the underlying political, economic, and social drivers of peace – and their optimism that neither side will come to a new negotiating table with dealbreakers is probably more warranted than anyone else’s.

Click here to see the original Spanish version of the petition.

October 14, 2016

Bolivia’s Constitutional Referendum Marks New Political Era

By Miguel Centellas*

Referendo Morales

Photo Credit: Organo Electoral Plurinacional de Bolivia and Alain Bachellier, respectively / Wikimedia and Flickr / Creative Commons

Bolivian voters’ rejection last week of a constitutional amendment to allow an incumbent president to run for a third consecutive term is a setback for President Evo Morales but a step forward for the country.  Both the government and opposition understood the national referendum as a plebiscite on Morales, who is now the longest serving head of state in Bolivian history.  Had the referendum passed, Morales would have been able to run for a fourth five-year term in 2019.  (Because Morales was first elected in 2005, before the new constitution was approved in 2009, the high court decided that he was eligible to run for reelection in 2014.)  During the months leading up to the referendum vote, polls showed a narrow gap between the votes in favor of the amendment and the No votes, with a large number of undecided.

As the final count began to crystalize (the official count is not yet available), it became clear that No won by a slim margin (51.3% to 48.7%).  At first, Morales and members of his government disputed the results, arguing that late-arriving rural ballots would vindicate him.  Later, they claimed opposition fraud and manipulation, including a “dirty” war waged by the opponents and the media.  Several scandals, however, appear to have been the real cause of Morales’s loss.

  • New developments in lingering accusations of fraud committed at the Fondo Indígena, an organization established to support economic, social, and political development of marginalized peoples. Government auditors last year uncovered more than a hundred incomplete or non-existent projects valued at tens of millions of dollars.  The case involved several ex-ministers in Morales’s government and leaders of his MAS party.
  • New allegations of corruption involving Gabriela Zapata Montaño, a romantic liaison of the President in 2006 who is now an executive for a Chinese-owned company (CAMC) that was awarded a large number of no-bid contracts for government development projects. Some sources claim millions of dollars have been misappropriated.  Zapata was arrested shortly after the vote.
  • Accusations that the MAS (and, implicitly, Morales) instigated angry protesters to attack the municipal building in El Alto, Bolivia’s second largest city, killing seven people and injuring many others. The mayor, Soledad Chapetón, and La Paz provincial governor Felix Patzi, a former education minister under Morales, were the first two opposition candidates to win those positions since MAS came to power.  The government dismissed the allegations and suggested that Chapetón orchestrated the violence to make herself a martyr.

The results of the referendum – and, more importantly, the frenzied reactions from Morales and other high-ranking members of his government – make the immediate future appear uncertain.  Morales accepted the results of the referendum but also ominously pointed out that there are other ways to amend the constitution.  He also dared opponents to initiate a recall referendum to remove him.  Nevertheless, some members of MAS – showing eagerness to carry the party’s wide support among Bolivians into the future – have begun publicly discussing possible successors.  Another positive sign is that Bolivia’s electoral court showed itself to be truly autonomous, bolstering opposition confidence in a key institution.  The question is whether Morales believes his party (and by extension his legacy) is worth preserving, or whether he wants to risk them for another dubious bid for reelection.  Claims that Morales’s setback is part of a “conservative tide” sweeping through Latin America may be premature, but this referendum may have repercussions elsewhere.  Ecuador’s Rafael Correa’s public comments that he would not seek reelection in 2017 may now become firmer.  The day of the three- or four-term president seems over.

March 3, 2016

* Miguel Centellas teaches political sociology at the Croft Institute for International Studies at the University of Mississippi.