presidential candidate Rafael Correa was favored in opinion polls
going into Ecuador's presidential and legislative elections on
October 15. In a surprising result, moderate industrialist Alvaro
Noboa garnered 27 percent of the vote to Correa's 23 percent,
followed by other challengers with counts in the teens and single
digits. Noboa and Correa now head for a November 26 runoff.
The October 15
result does not mean that Ecuador has dodged a bullet. Polls
indicate substantial voter discontent with current levels of
corruption, political factionalism, and lack of social progress.
Correa, an outsider who admires Venezuelan president Hugo
Chávez and Cuba's Fidel Castro, is charismatic and could
still prevail. Noboa is a mildly populist insider who advocates
free trade and bills himself as the "anti-Chávez."
If Correa wins the
November runoff, his actions in office could provoke capital flight
and possibly rebellion. If Noboa wins, Ecuador has a chance at
stability, but only if he embraces electoral reforms, the rule of
law, and a competitive economy.
Ecuador is a tiny
Andean oil exporter whose 13 million people generate $18 billion in
gross domestic product-equivalent to Winston-Salem, North Carolina,
a city of 440,000. Milking oil revenues to sustain heavy social
spending has kept its government in debt since the 1980s. About 45
percent of the population lives in poverty, and only half of its
students get beyond grade school. Although Ecuador turned from
military dictatorship to civilian rule in 1979, politicians have
shunned most reforms that would strengthen democracy and help all
citizens compete against powerful elites in business.
institutions remain tentative. In the last 10 years, Ecuadorans
have dismissed three presidents before their terms ended. In 1996,
Abdalá Bucarám won the presidency by campaigning
against corrupt oligarchs. After only a few months in office,
lawmakers removed him for corruption. In 2000, special interest
groups ousted President Jamil Mahuad for trying to dollarize the
economy, a reform his replacement implemented anyway. In 2005,
congress dismissed President Lucio Gutierrez for illegally firing
members of the supreme court.
Correa is a
university professor who served briefly as Minister of the Economy
and Finances in the current caretaker administration of President
Alfredo Palacio. There, the 43-year-old U.S.-educated economist
tried to raid the government's rainy day oil stabilization fund to
pay for social programs. To evade multilateral lending guidelines,
he promoted the sale of Ecuadoran bonds to the government of
Venezuela. When the World Bank canceled a $100 million loan to
Ecuador, an embarrassed President Palacio asked for his
Alvaro Noboa is a
lawyer, banana magnate, and philanthropist who ran unsuccessfully
for president in 1998 and 2002. During this year's campaign, he
offered to build hospitals while reportedly giving away wheelchairs
and cash. He is a "stay the course" candidate who promises to keep
Ecuador from following the authoritarian models of Venezuela's
Chávez and Cuba's Castro. Noboa welcomes a potential
U.S.-Ecuador free trade agreement, but has not challenged the
monopolistic grip of elites who dominate the economy and political
Correa's plans to
marginalize elites and steer Ecuador away from traditional ties
with industrial democracies could prove divisive. During the
campaign, he said he would do the following:
- Dismiss lawmakers
and name a constituent assembly of "capable citizens" to replace
the congress and courts. This vaguely defined group would write a
new constitution concentrating power in the presidency-similar to
the charter that gave sweeping authority to Chávez in
- Abandon the U.S.
dollar and restore the sucre as the national currency, thus
taking Ecuador back to the days of printing money and high
foreign debts or refuse to pay them, thus cutting ties with
- Pull out of free
trade negotiations with the United States and enter an aid pact
contracts with foreign petroleum companies to give the government a
greater share of oil revenues; and
- Deny the U.S.
permission to use Ecuador's Manta air base for drug interdiction
when its lease runs out in 2009 or sooner.
campaign, Correa also announced the formation of "family
committees" to confront those who oppose his ideas-similar to
Chávez's Bolivarian Circles and Fidel Castro's neighborhood
revolutionary defense committees.
A Way Forward
In preparation for
the runoff, Noboa needs to do more than portray his rival as a
Chávez clone. He must present a detailed plan to counter
Correa's hard socialist agenda. He would do well to emulate
Peruvian President Alan García who shed the populist ideas
of his past but not his concern for the poor. García is now
shrewdly crafting trade and globalization into tools to liberate
the poor from dependency on government largesse and charismatic
saviors. Once unpopular in Peru, free trade is now gaining public
A similar strategy
could work for Noboa, but only if he challenges elites now
comfortable with the status quo to accept the rule of law, ease
burdensome regulations governing small businesses, strengthen
property rights, and permit banking competition to bring affordable
credit to the poor. With more control over their own affairs,
Ecuador's working classes would be less susceptible to "follow me"
messages of strongman pied pipers like Correa.
The Bottom Line
Neither Noboa nor
Correa bring much experience to the presidency. Noboa is heir to a
family fortune and will need expert advisers to help him strengthen
institutions and bridge interests between the rich and poor. Correa
is a resentful academic, behaving as if he alone knows what's best
for his constituents-a recipe for blunders and corruption. Most
Ecuadorans actually want to get away from that. At least with
Noboa, they have a chance.
While the United
States can't influence the electorate's decision, it can
communicate its abiding interest in a bilateral free trade
agreement to lock in opportunities for Ecuador to advance
economically beyond commodity exports. Then in November, it will be
up to Ecuadorans to decide which candidate can take advantage of
that open door.
is Senior Policy Analyst in the Douglas and Sarah Allison Center
for Foreign Policy Studies at The Heritage Foundation.