As Lasso rises, Ecuador could be next leftist LatAm domino to fall

Former vice president Lenín Moreno hopes to keep the Latin American left’s hopes alive with a victory in Ecuador on Sunday. (Facebook)

No one has more riding on the outcome of the April 2 presidential runoff in Ecuador than Julian Assange. 

The Wikileaks founder has been shacked up in the Ecuadorian embassy in London since 2012. Officially, Assange is evading an extradition to Sweden to stand trial for sexual assault charges. Ecuador’s outgoing president Rafael Correa granted Assange asylum five years ago, a populist move responding to the eccentric Australian native’s fears that he might ultimately be subjected to the grips of US extradition.

If one-time frontrunner Lenín Moreno, Correa’s former vice president, and the heir to Correa’s self-proclaimed ’21st century socialist’ Alianza PAIS movement, wins Sunday’s election, Assange can rest assured that Ecuador’s government will not revisit that arrangement anytime soon.

But if center-right insurgent Guillermo Lasso has his way, he will evict Assange from from Ecuador’s protections within 30 days of taking office.

Though Assange’s fate is drawing global headlines, Ecuador’s election represents a fascinating showdown between two very different policy views for the country’s future outcome — and a referendum on Correa’s decade-long rule. The result will hold deep consequences for the country, its rule of law, its electorate and Latin America generally.  A country of 16 million that, since 2000, has used the US dollar as its currency, Ecuador is today the eighth-largest economy in Latin America.

It’s the latest battleground in a series of contests in the mid-2010s that have generally brought setbacks to the populist left. A Lasso victory on Sunday could add pressure to Venezuela’s increasingly autocratic government, and boost conservative opposition hopes in Chile’s elections later this year and in Bolivia’s in 2019.

Guillermo Lasso narrowly forced his opponent into a runoff in what is now a clear referendum on Rafael Correa’s decade-long presidency. (Facebook)

Former bankers do not typically make great politicians, but Lasso narrowly forced a runoff by holding former vice president Lenín Moreno to just below 40% in first round on February 19.

That gives Lasso a head-on opportunity to face Moreno without dispersing multiple opposition forces within Ecuador. Third-placed candidate Cynthia Viteri, a former legislator and a social conservative, has endorsed Lasso. Fourth-placed Paco Moncayo, a leftist who served as Quito mayor from 2000 to 2009, has refused to endorse either of the two finalists — a snub to Correa and Moreno.

Viteri’s support and Moncayo’s ambivalence have both boosted Lasso’s runoff chances, though it may still not be enough — Lasso finished more than 11% behind Moreno in the first round. Indeed, most polls give Moreno a slight edge over Lasso, a longtime president of the Bank of Guayaquil whose political experience is negligible — he served briefly as ‘superminister for finance’ in 1999 during the scandal-plagued administration of Jamil Mahuad, sentenced to a 12-year prison sentence in 2014 for embezzlement. In 2012, Lasso formed a new opposition party, Creando Oportunidades (CREO, Creating Opportunities) to back his presidential ambitions in 2013. Lasso finished a humiliating second place (with just 22.7% of the vote) to Correa, who won a first-round victory with 57.2% support. But that race put Lasso in position to consolidate support as the chief opposition candidate this year. 

Moreno, a paraplegic, served as vice president from 2007 to 2013, when Correa’s popularity was at its highest, and he served from 2013 to 2016 as a UN special envoy on disability and accessibility issues. Moreno was confined to a wheelchair in 1998, after he was shot and paralyzed during the course of a robbery. If elected, Moreno would instantly become one of the most high-profile advocates worldwide for paraplegic issues.

On policy, however, Moreno would largely continue the leftist approach that Correa has enacted since his landmark 2006 election. Benefitting from a bit of luck and an approach to government that was far more technocratic than his populist rhetoric suggested, Correa has used the power of the state and the country’s oil wealth to develop programs that nearly halved poverty — a legacy that’s now in danger, even if Moreno wins, thanks to the 2014 drop in global oil prices and a resulting shallow recession that’s gradually sapped Correa’s popularity. Corruption allegations, rooted in the state oil company, Petroecuador, have done little for Correa’s long-term legacy.

Lasso promises to cut over a dozen different taxes, including what he calls the tax of the Correa administration’s corruption. Lasso hopes his more market-friendly policies can unleash a wave of investment that can create nearly one million jobs (and, hopefully, diversify the economy away from oil and banana exports). If he wins, Lasso will join several new center-right and market-friendly presidents across the region last year, including Peru’s Pedro Pablo Kuczynski and Argentina’s Mauricio Macri. Even as he rails against Correa, however, Lasso has faced scrutiny about his own financial dealings, including ongoing holdings in the Bank of Guayaquil and potential offshore holdings in Panama and other tax havens. Though Lasso has tried to embrace the always useful mantle of change, Ecuadorians are skeptical of bankers, especially since the country’s 1999 financial crisis.

Whatever happens on Sunday, the next president will face an Asamblea Nacional (National Assembly) still dominated by Correa’s forces — in the February 19 general election, Alianza PAIS still won a majority of the seats, so a Lasso administration will have to find ways to work with its far more left-wing political rivals.

The truth is that Ecuador’s economy could use a dose of both approaches. Like conservatives throughout Latin America, a Lasso presidency would be wise to keep some of the landmark social welfare programs introduced during the Correa years, even if it requires reform to make them more effective and efficient at a time when oil prices remain depressed. (Oil accounts for nearly half of the country’s exports). But it’s also true that pent-up demand for private investment could flourish with a less hostile regulatory environment and fewer taxes, and Moreno will have to adjust fiscal policy in the face of unsustainable spending and dwindling oil revenues.

Of all the countries in Latin America that have turned to the populist left in the last two decades — Brazil, Venezuela, Argentina, Nicaragua, Bolivia — there’s a case that Correa’s schizophrenic approach to government, in parts both radical and conventional, has weathered best over time. Despite talk from Correa’s opponents about corruption and degrading the rule of law, Ecuador’s election (fair and free by all standards) will take place just days after the Venezuelan judiciary essentially invalidated the role of the opposition-dominated Venezuelan legislature. (Indeed, if Lasso manages a victory, he should send a thank-you note to Venezuela, where the ongoing economic and political crisis might easily scare Ecuador’s voters away from the populist left).

While Correa came to power shaking his fist at the country’s international credits, defaulting on $3 billion in debt, he has governed in quite conciliatory ways — a political ally of leftists in Venezuela and Argentina, while retaining millions of dollars in vital loans from China and maintaining trade ties with neighboring Peru and the United States. Those cheap Chinese loans, along with oil wealth and rising taxes, gave Correa the ability to raise the minimum wage and double public spending, most of it devoted to infrastructure, education, health, housing and other social welfare matters. Yet unlike in Venezuela or even Argentina, Correa also managed to keep inflation in check (thanks, in part, to nearly two decades of dollarization), and he never resorted to crude economic controls. While public debt has certainly increased over a decade of correísmo, it’s still a manageable 33% of GDP.

The longest-serving president in Ecuador’s history, Correa brought to end a seemingly endless cycle of revolving-door presidencies that exacerbated the country’s political instability and economic crisis. No one, since the return of democracy to Ecuador in 1979, seemed to find the keys to govern the country with any amount of confidence — until Correa, that is.

Correa’s government wasn’t always angelic when it comes to the rule of law, press freedom or even the indigenous, the miners and other labor movements that it claims to represent. Yet unlike other Latin American populists of the left, Correa backed down after an initial push to allow for reelection (in contrast to Bolivia, where voters punished the other popular incumbent Evo Morales in a referendum on ending term limits), though he might have easily won a third term. Undoubtedly, Correa will command much informal influence in Moreno wins this weekend. Nevertheless, Correa’s legacy will hover for his successors for some time.

2 thoughts on “As Lasso rises, Ecuador could be next leftist LatAm domino to fall”

  1. This is the real orchestration that establishment and world élite media, wants us to believe but is not the things they want, is gonna be like the majority of the population who really wants to continued with the same project from the people’s government to the real people’s rights.

  2. I think, Latinoamerican enough experience just watching Brasil and Argentina raping their rights for believing that the rightist would change for better but it didn’t worked like the expectation they were waiting for. Corporation mentality never gonna change helping the real people. Farmers and real man force of the workers in the world.

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