People's Democracy

Ecuador: Correa Gets Sweeping Mandate

Yohannan Chemarapally

THE people of Ecuador gave President Rafael Correa a sweeping mandate, for the third consecutive term in office, in the general elections held on February 16. President Correa’s party, known as Movimiento Allianza Pais (Country Alliance Movement), also won an overwhelming majority of seats in the country’s parliament. According to projections, the Allianza Pais may end up getting around 70 per cent of the seats in the assembly. The Ecuadorian president has won more than 58 per cent of the votes, thus avoiding a second round runoff. Correa’s nearest opponent in the presidential sweepstakes was the right wing business magnate, Guillermo Lasso. He got around 23 per cent of the votes.

ENDORSEMENT OF

SOCIALIST POLICIES

In all, there were six other candidates vying for the top post. A former president, Lucio Gutierrez, came a dismal third, getting barely six per cent of the votes. Gutierrez, a former army officer, had staged a military coup in 2000, overthrowing a civilian government. He then ran for office on a populist ticket but after being elected, reneged on his promises and implemented neo-liberal policies dictated from Washington. Widespread street protests in 2005 led to the resignation of Gutierrez and eventual rise of Rafael Correa on the Ecuadorian national scene.   

Correa was first elected as president in 2006 and then re-elected in 2009. He has now returned with a stronger mandate to further strengthen the government’s “Citizen’s Revolution” that wants to radically change the course of politics in the country. Speaking after his decisive victory, Correa said that the results were a clear endorsement of the socialist policies the government had implemented. “You’ve given us the ability to change the country once and for all. Nothing and no one can stop this revolution,” Correa told his cheering supporters from the balcony of his presidential residence. He ended his speech with the ringing words: “We are only here to serve you. Nothing for us. Everything for you.”

Before Correa became president, the Ecuadorian political scene was characterised by chronic instability. Elected governments were not allowed to last their terms. Street protests and extra-constitutional activities ensured that governments came and went in quick succession. Before Correa became president, Ecuador had witnessed seven presidents in ten years. The country’s economy too was in a precarious state. An economist by training, the 48 year old Correa won his first election by promising to reverse the neo-liberal reforms that were introduced by his predecessor under pressure from the international financial institutions. He had pledged at the time to wage a war against poverty and has since been true to his words.

Borrowing from the political lexicon of his friend and mentor, Hugo Chavez, Correa said that his goal was to achieve “socialism of the 21st century” in his country. Correa dedicated his latest victory to Chavez, “the great Latin American leader who has transformed Venezuela” and wished his dear friend a “quick recovery” form his cancer surgery. The Venezuelan vice president, Nicolas Maduro, conveyed Chavez’s greeting on the “gigantic victory” which Correa achieved in Ecuador’s presidential and parliamentary elections. An official statement from the Venezuelan government said that the results “were a new lesson for those powers which have failed in their attempt to put obstacles in the path towards the consolidation of independence, sovereignty, and well being of all Ecuadorians.” Cuban president, Raul Castro, said that Correa’s “clear victory” is the “clear expression of irrevocable support for the citizen’s revolution.” Correa told reporters that in the last six years, there was only a “destabilising, conspiratorial, coup pursuing, obstructionist opposition.” The results of the latest election have shown that the voters have rejected the old opposition.

ECONOMY MAKES

POSITIVE TURNAROUND

Along with Chavez and other progressive leaders in the region, Correa too has been on Washington’s “hit list.” There were attempted coups against Chavez and Correa in 2002 and 2010 respectively. The presidents of Honduras and Paraguay, who had wanted to chart alternative courses for their country, were ousted in coups that were supported by Washington.

President Correa said that he would use his new mandate to usher in more reforms, including laws to reform the country’s media. Influential sections of the media are in the hands of a few oligarchs who are still not reconciled to the new realities. In 2011, a journalist and three executives belonging to an opposition paper were found guilty of libelling against the president. Prison sentences and a hefty fine were imposed on them. The president, however, pardoned them saying that his fight was a symbolic one, aimed against “the dictatorship of the media” only.

When Correa assumed office for the first time, the country was under a mountain of debt. The country’s elite which was controlling the government had subscribed to the “Washington consensus” of deregulation and privatisation. Oil prices had plummeted in the middle of the last decade. Ecuador is an OPEC member and oil revenues continue to play a key role in the economy. The global economic recession that started in the last decade did not help matters as it coincided with Correa’s ascent to the presidency. Correa’s deft stewardship, however, ensured that his country did not fall into recession despite the US dollar being Ecuador’s official currency. Ecuador had adopted the dollar as its currency in 2000.

Most of Ecuador’s trade links at the time were with the US. But US investments have by now virtually dried up in the country. Today, China has emerged as the leading investor in Ecuador. In 2011, China signed an agreement to invest two billion dollars in Ecuador. China, in return, will be given “priority oil contracts” worth one billion dollars. The country is already the biggest buyer of Ecuador’s oil and currently holds 3.4 billion dollars of Ecuadorian debt. Correa recently said that the country welcomes foreign investments but “it is better not to have it than to mortgage the country in the name of that pipe dream called foreign investment.”  

In November 2010, Ecuador had revised its agreements with most of the western oil companies. Rental payments were hiked from 18 per cent to 80 per cent. Revenues from the oil sector have helped the government to increase spending in the social sector by 25 per cent. Government revenues went up from 27 per cent of the GDP in 2007 to 40 per cent in 2012. Since 2008, the country has been witnessing tangible changes. The unemployment level, for instance, has been steadily going down. Today it stands at 4.4 per cent, much lower than in many industrialised European countries. It was Correa’s decision to default on a third of the country’s foreign debt worth 3.8 billion dollars that has played a big part in the rebounding of the economy. The government had concluded that this portion of the national debt was illegally contracted. Only one per cent of the country’s GDP is now being spent on servicing the national debt.

NOT AFRAID OF THE WEST

ON QUESTION OF PRINCIPLES

Correa’s progressive policies have produced a high growth in real GDP and drastically reduced poverty. Many economists have credited Correa with carrying out the most comprehensive financial reforms any country has witnessed in the 21st century. Among the steps taken was the government re-establishing full control over the central bank and forcing it to bring back two billion dollars in reserves it had abroad. (This was in contrast to many countries of the world which continue to hold the independence of their central banks as sacred.) The money from the central bank was used to provide loans for public infrastructure, housing and agriculture.

The government used its newly generated revenues to increase loans to “people’s cooperatives” and other groups which would serve the interests of the public.

High oil prices have no doubt helped the Ecuadorian government to fulfil its pledges of reducing poverty, building new centres of higher education and constructing infrastructure projects that are changing the face of the country. Generous subsidies are being provided to various sectors of the population. Cash transfers have increased the income of poor Ecuadorians. About 1.9 million people out of a population of 15 million receive 50 dollars a month as aid from the state. Most of them are single mothers, needy families and the old. According to the World Bank, poverty levels in Ecuador have dropped from 38 per cent in 2006 to 29 per cent this year.

From the very beginning, President Correa has shown that he is not afraid to stand up to the West on the question of principles. Washington was unhappy with him for a variety of reasons. Ecuador’s decision to not renew the lease for the US military base in Manta angered the Bush administration. Correa’s espousal of groupings in the region that excluded the US was another important factor. Ecuador is a founding member of ALBA (the Bolivarian Alternative for Latin America). The other prominent members of the grouping are Venezuela, Cuba and Argentina. Ecuador is also playing a leading role in other regional groupings like the Community of Latin American and Caribbean States (CELAC) and the Union of South American Nations (UNASUR).

Last year, President Correa took the courageous step of giving sanctuary to the Wikileaks founder, Julian Assange, in the Ecuadorian embassy premises in London. The Ecuadorian president has reiterated that there is no question of his government compromising on the question of asylum for Assange. He said that the Wikileaks founder was available for questioning in the premises of the embassy by Swedish prosecutors and that there was no attempt to sidetrack the Swedish justice system. “But there is a lot of arrogance involved here and neo-colonial sentiment too. They even want us to backtrack on our decision, but we will never do so,” Correa told a Russian TV channel. The West and the rest of the world will be hearing and seeing a lot of President Correa as he strides the world stage in the coming years.