Continuity or Change? Lenín Moreno Takes Power in Ecuador
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Author: Erika Astudillo
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Equal Times

For the first time in 10 years, a new person took on the presidency of Ecuador on 24 May: Lenín Moreno. He is taking over from the charismatic Rafael Correa, who won three consecutive elections with more than 55 per cent of the vote without having to go to a second round.

Moreno belongs to Alianza PAIS, the same party as the outgoing president, but is taking over the reins in a different socioeconomic context. He won the election in the second round with 51.16 per cent of the vote, against the 48.84 per cent that went to his opponent, Guillermo Lasso (after a recount awash with accusations of fraud from the opposition). In addition, just 74 of 137 National Assembly members are from Alianza PAIS, whereas the previous administration held 100 seats. These results, so bitterly disputed, and the general feeling in the country point to a “divided Ecuador”.

Moreno is not a new figure in the country. He was Correa’s vice president between 2007 and 2013 and left an impression on the population through his advocacy for people with disabilities.

Through the Misión Manuela Espejo programme, people in this vulnerable group are now guaranteed medical and social care. In fact, thanks to his work, almost everyone with a disability received care in Ecuador. In 2013, 367,487 people were registered disabled and the figure rose to 418,001 in February 2017, according to the figures of the National Disability Equality Council (CONADIS). Moreno’s work earned him a nomination for the Nobel Peace Prize in 2012. In 2013, he left the government to go and work as a special envoy of the UN Secretary-General Ban Ki-moon for disability and accessibility.

His main challenge: ensuring sustainable economic growth

President Moreno is now tasked with the challenge of sorting out Ecuador’s economy. In late 2015/early 2016, Ecuador went into a recession, primarily triggered by the fall in oil prices. In addition, on 16 April 2016, the country suffered an earthquake measuring 7.8 points on the Richter scale, in which 671 people were killed and several coastal towns suffered widespread damage and destruction. These external factors were the chief causes of the 1.5 per cent fall in GDP during that year, according to the Central Bank of Ecuador (BCE).

The economy already started to show signs of recovery, however, during the last quarter of 2016. According to official figures, recovery of 1.5 per cent was seen during that period. On presenting the figures, Correa announced: “Technically, the country came out of the recession after four quarters of decline. We are handing over an economy in recovery.” The BCE has forecast growth of 1.42 per cent for this year.

In 2007, Ecuador’s GDP was around US$51 billion (€45.6 billion), whilst the year 2016 closed with a GDP of over $100.5 billion (€90 billion). The economic upturn has not, however, had an impact on employment levels.

When Correa came to power in 2007, the rate of unemployment was 5 per cent, and 10 years later, it was 5.2 per cent, according to the National Statistics and Census Institute (INEC).

Such stability is not necessarily a good thing.

“It is worrying to see that, after a decade during which the government handled a huge amount of resources and set about transforming the production model, the rate of ‘suitable employment’ remains much the same. In other words, the number of people receiving the basic unified minimum wage (US$375, around €335), at least, remains unchanged, and the figure is likely to fall if the new government does not take adequate measures to create quality employment in the private sector,” argued independent economist and consultant Sebastián Lucero, in an interview with Equal Times.

In 2007, the rate of ‘suitable employment’ was 43.2 per cent, and in 2016 it closed at 41.2 per cent.

The level of debt is also high on the list of tasks awaiting Moreno. In 2016, foreign debt reached over US$26.4 billion (around €23.7 billion), almost double the figure for 2007, or 26.3 per cent of GDP, and domestic debt was over $13.9 billion (around €12.5 billion), or 13.9 per cent of GDP. Together, they reach 40 per cent of GDP.

For Lucero, encouraging private investment “will be crucial and represents a major challenge for the new government, as it is not going to be able to rely on anywhere near the same resources as the outgoing government, given the lower oil prices, bonds reaching maturity and a lower financing margin”.

Between continuity and change

Correísmo marked a turning point in the history of Ecuador. Correa launched his administration with measures such as buying back the country’s debt, renegotiating oil contracts (so that the royalties would remain in the country rather than going to multinationals) and better tax collection.

His administration brought stability after almost 10 years of political and economic upheaval. His emblematic works include modern hospitals, high quality roads and hydroelectric plants through which electricity can now be exported.

Another of his legacies is the reduction of poverty. The population living in poverty was reduced from 36.7 per cent in 2007 to 22.9 per cent in 2016. The level of inequality, based on the Gini coefficient (the higher the indicator, which goes from 0 to 1, the greater the inequality), was also brought down to 0.46 in June 2016 from 0.55 in 2007.

Even the recession of 2015 and 2016 was overcome at very little social cost and in record time, according to the authorities and some of the analysts consulted.

The major challenge facing President Moreno will be to revitalise the economy and to promote quality employment in the most productive areas, on a tight budget. This will require agreements with the private sector (something Correa struggled with), meeting the state’s financial obligations without neglecting its social obligations and, above all, creating a climate of confidence through respect for democratic norms.

Coming from an administration that has achieved few agreements with the private sector and has lent more towards public spending, this will be no easy task.

Felipe Burbano de Lara, a sociologist from the Latin American Faculty of Social Sciences (FLACSO), maintains in an opinion piece for El Universo that Moreno’s change of style will be confronted with two opposing forces: those within Alianza País, where he will come under pressure to ensure continuity, and those within society, which will press for more change. He will settle between ideological continuity and an eagerness to deepen the Citizen Revolution and the outstretched hand promised towards society at large.

Last week, the FLACSO organised a forum to analyse the challenges facing the new government in terms of foreign policy, governability and social issues. The public newspaper El Telégrafo reported that Moreno’s openness to dialogue is generating optimism among the country’s various socioeconomic sectors.

The former mayor of Quito and university professor Augusto Barrera, for example, stated that Moreno’s oft-repeated promise of dialogue means that one of the greatest tasks ahead will be the inauguration of a new stage in the process of democratisation, based on a bottom-up management model, rather than just a change of style. He also underlined as positive the government’s plans to set up consultative councils, to act as a link between the state and society.

At the same event, Burbano de Lara described Moreno as a “good” person, who is taking on “weakened power, this being the end of a cycle”, which is complex, but the political cost can be avoided through “dialogue and consensus”.

Moreno has repeatedly pledged, in his speeches, to be a president with an “outstretched hand”, open to dialogue with all segments of society. He has, in fact, honoured his word and has met with indigenous organisations, business leaders and even with the Ecuadorian Association of Private Banks.

During the meeting with the representatives of this association, who had become distanced from Correa’s cabinet, the new head of state reiterated his commitment to maintaining the dollarisation of the monetary and official foreign exchange system and requested their support for economic policies. He also committed to maintaining ongoing contact to examine the changes required to reinforce the solvency of the banking system and to promote a greater contribution to growth.

Another change that will be felt among the public is the end of the well-known Enlaces Ciudadanos (Citizen Links), the radio and TV programmes in which Correa, with his firm and comforting style, would report back to the public, giving details of his daily agenda, refuting private mass media reports and analysing current affairs. Each broadcast would last four hours and he did 523 in total (starting in January 2007). Moreno has said he will not do the Saturday shows, but will implement another type of accountability system.

These initial signals have lightened the atmosphere over recent weeks, following the fierce confrontation seen between rival parties, and are creating a sense of optimism about the new president among the public, which will be keeping watch to make sure he keeps his word.

“I am the president of all Ecuadorians and I will work for each one of you, for those who voted for me and placing great emphasis on those who did not. I will be the president of dialogue, of diversity,” underlined Moreno on receiving his credentials as the new leader of Ecuador.

Erika Astudillo is an Ecuadorian journalist based in Quito.  This article has been translated from Spanish.

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