SANTA MARTA, Colombia — On February 7, 2021, the people of Ecuador turned out to vote for a new president tasked with leading the South American nation out of its current economic and health crises. With no candidates achieving the required percentage of votes, the country will hold a run-off election on April 11 to elect its president. A new president for Ecuador means renewed hope for poverty reduction.
Poverty in Ecuador is soaring. It grew from, “25.7 to 58.2% between December 2019 and June 2020.” The economy has also been recently battered by COVID-19, dropping oil prices that the country largely depends upon.
Ecuador had seen sluggish economic growth since 2017 when the current president, Lenin Moreno, took office. But, Ecuador’s dire situation during the pandemic is an added economic impact on the country. Moreno’s reliance upon foreign investment and the domestically unpopular International Monetary Fund (IMF) has brought his approval rating down to a measly 7.1% in 2020. As such, the world is eager to know who will soon take the reins in an effort to lead Ecuador out of its current economic woes and battle rising unemployment, inflation and debt.
The Leading Candidate
After the February 7 vote, Andrés Arauz will go to the April run-off vote leading with about 32% of the votes. The 36-year old represents the Union for Hope coalition, an alliance of left-leaning parties backed by former president, Rafael Correa. The support of Correa, and subsequently his many followers, cannot be overlooked in Ecuadorian politics. While an undeniably divisive figure today, his leadership still enjoys the support of millions of “Correistas” across the nation.
The Dark Horse Candidate
The second and third-place finishers were separated by less than 1%. Yaku Pérez, of the left-leaning Pachakutik coalition, appeared to narrowly edge out his conservative rival, Guillermo Lasso. Pérez is seen as an outsider candidate, representing the growing power of indigenous communities within Ecuador. He has called for an economic model that centers around sustainable development, protection of the environment and the creation of a universal basic income. Of the three major candidates, he has been the most staunchly opposed to the recent IMF deal. His candidacy has proven popular among Ecuador’s youth and indigenous population.
Third for Now
Before Pérez, experts had looked to Lasso, a 65-year old businessman with previous experience working in the government, to be Arauz’s likely competitor. Lasso is a right-wing globalist with a wealth of support from Ecuador’s capital of Quito. His own plans to turn Ecuador’s economy around likely involve re-opening the country further to foreign investment as well as attempting to negotiate a slightly more favorable deal with the IMF. Lasso has voiced critiques of the deals made by Moreno’s government, but his criticism of the preceding Correa government has been far louder. This highly contested IMF deal will undeniably remain a key factor in the April votes.
The World’s “Financial Crisis Firefighter”
The IMF has been a sore subject in Ecuador’s long struggle to curb poverty within its borders. Ecuador has repeatedly received loans from the institution and its more recent ones continue to produce controversy. These loans come with very strict guidelines for the government to adhere to. The IMF has required a serious tightening of Ecuador’s national budget over the next few years, privatization of public assets and greater autonomy for the central bank, to name a few.
Proponents of these loans point to Ecuador’s need for immediate financial assistance in the wake of COVID-19 and the long-term benefits of modernization and reform. On the opposite side, people fear that the deal has unrealistic assumptions about the amount of foreign investment Ecuador will enjoy in the coming years. Opponents decry the deal as a constrictive measure on Ecuador’s government that the people will ultimately pay for as jobs disappear and inflation soars.
Waiting for April
Renegotiation with the IMF is likely to follow the election of any of the candidates. On its own, it would not be enough to save Ecuador’s impoverished communities though. A new president for Ecuador brings hope for lasting economic reforms that reduce Ecuador’s dependency on oil exports. The new president must also work to bring down unemployment and rebuild faith in the democratic process. It is a tall order for any of the candidates to complete, but with such a high percentage of Ecuador’s population still languishing in poverty, these are vital endeavors.
– Scott Mistler-Ferguson