Ecuador’s Prolonged Instability

Ten years ago political and social instability came to Ecuador with the sudden emergence of new actors organized in a strong indigenous movement. These actors actively opposed the entrenched elites that have long refused to give up their control over the state. While President Rafael Correa’s victory in the referendum to convene a constituent assembly could lead to changes in state control, it is no guarantee that Ecuador’s seemingly chronic instability will decline.

Correa scored an overwhelming victory in the referendum held April 15, in which more than 80% of the electorate voted in favor of his proposal to convene a constituent assembly. The referendum now paves the way for elections to choose delegates amid extreme polarization between the administration and the right.

Correa’s first months in office were marked by his inability to overcome the institutional instability that has wracked the country for more than 10 years. Since 1996 no president has served a full term in office due to the recurrent insurrections and social protests that have convulsed the country. It will be hard for Correa to succeed where others failed. The population, especially the indigenous movement, seems unwilling to tolerate continued rule by the white elites who plunged a nation rich in natural resources—including oil—into poverty. On the other hand, the elites are averse to losing their privileges, leading to today’s climate of confrontation.

Correa owes his surprising victory in the November 26 runoff to an organized civil society that has vocally rejected neoliberal plans. Despite being an independent with no party and no fellow party candidates running for Congress, the new president has the backing of a significant portion of Ecuadorians. He now faces the difficult task of dismantling a colonial state created by the elites. His main weapon, which has provoked the tenacious resistance of the privileged class, is a constituent assembly to create a new foundation for the country and to give it a state that truly represents those who have been excluded for five centuries.

The Long Story

The last president to serve a complete term in office was the conservative Sixto Durán Ballén (1992-1996). His eight successors have governed in the context of nearly constant social upheaval. But instability grew worse in June 1990, when a powerful indigenous uprising spearheaded by the Federation of Indigenous Nationalities of Ecuador (CONAIE) set off a political and social cataclysm and placed the indigenous population on center stage in Ecuadorian politics. Since then, they have been the force that other actors must either negotiate with or confront. And they are no longer willing to play a secondary role or remain relegated.

Abdalá Bucaram, a right-winger, won the 1996 elections. He remained in power only six months before Congress ousted him, citing his "mental incapacity to govern." Bucaram’s tempestuous term in office was plagued by irregularities and sparked massive protests. Bucaram was succeeded for a few hours by vice president Rosalía Arteaga, but Congress instead named its president, Fabián Alarcón, to serve as interim president. In the August 1998 elections, Jamil Mahuad defeated billionaire Álvaro Noboa in the second round.

Mahuad governed from Aug. 10, 1998 until Jan. 22, 2000, when a broad-based indigenous uprising backed by a group of rebel colonels, most prominently Lucio Gutiérrez, forced him to resign. Vice president Gustavo Noboa took over. All of this occurred amidst a financial collapse that led the authorities to freeze bank deposits and replace the Ecuadorian Sucre with the dollar.

In the 2002 elections, Gutiérrez came to power riding a wave of indigenous support. The former colonel had promised to carry out sweeping changes, declared himself to be a "nationalist, progressive, and revolutionary," and proposed a "second independence" for Ecuador. Gutiérrez’s cabinet ministers included prominent indigenous leaders, such as Nina Pacari, who became the first indigenous woman on the continent to serve as minister of foreign affairs.

However, Gutiérrez quickly betrayed his allies, signing an agreement with the International Monetary Fund (IMF), introducing a structural adjustment program, and turning to the right-wing Social Christian Party (PSC) for support. CONAIE sank into a deep crisis from which it has still not fully recovered. Its leaders distanced themselves from their base—many taking government posts. In addition, Gutiérrez used government funds to divide and co-opt the movement, even resorting to selective repression against dissidents. Finally, in July 2003, six months into the term of a government that had raised enormous expectations, CONAIE withdrew its cabinet members.

As the unpopularity of Gutiérrez’s government spread, so did the protests. The agreements with international financial institutions led to the privatization of the state-owned electricity and telecommunications companies and to the suspension of subsidies on domestic gas use. On April 20, 2005, Congress ousted Gutiérrez amidst a massive urban protest led by middle-class citizens and young people in Quito known as the "forajidos," or outlaws (as Gutiérrez referred to his critics).

Gutiérrez was succeeded by Alfredo Palacio, who distanced himself from his predecessor’s pro-American stance and named economist Rafael Correa as minister of the economy. This marked a turning point in the country’s recent history. Correa had negotiated the sale of US$500 million in foreign-debt bonds to Venezuelan president Hugo Chávez and decided that a portion of oil exports would be reserved for social expenditures rather than paying down the foreign debt. But pressure from Washington, the IMF, and the World Bank forced Correa to resign, as Palacio veered to the right and prepared to sign a free trade agreement with the United States.

As the pendulum once again swung rightward, the indigenous population took the initiative again. In March 2006, the most recent major indigenous uprising (of a total of more than 10 since 1990) took place. The government responded to the demonstrations, roadblocks, and the paralysis of the country by decreeing a state of emergency in half of the nation’s 22 provinces.

Grassroots sectors, rallying around the slogan "We do not want to be a colony of the United States," scored a resounding victory. On May 15, Palacio’s government was forced to back down. Bowing to pressure from social movements, it expelled Occidental Petroleum and confiscated its assets as a way to ease tension. The proposed free trade agreement was put on hold, as the White House said that it would not sign it under existing conditions. It was in this climate that Correa was elected.

The Recent History

In the run-up to the October 15 elections, Rafael Correa founded Alianza País (Country Alliance), an umbrella organization of progressive groups. The traditional left ran its candidates, as it has always done. And the indigenous movement backed Luis Macas, president of CONAIE. Neither of these two sectors fared well at the polls or came close to defeating the right, which had rallied around banana magnate Álvaro Noboa. Amid complaints of fraud—never proven or ruled out—Noboa won the first round while Correa placed second.

In the second round a vast social-political movement supported Correa’s candidacy. It was made up of the Pachakutik (pro-indigenous) Party, the Democratic Popular Movement, and the Socialist and Democratic Left parties; but, above all, it was backed by more than 200 civil society organizations.

This broad-based movement dashed the hopes of the right, which appeared to be the favorite. Correa stated that he was opposed to the free trade agreement with the United States and to acquiescing to the Bush administration’s labeling of the Armed Revolutionary Forces of Colombia (FARC) as a "terrorist" organization; said that he would not renew the contract for the U.S. airbase at Manta; and he endorsed Hugo Chávez’s regional integration project, the Bolivarian Alternative for the Americas. On the crucial topic of oil he was categorical: "We cannot permit the multinationals to take four of each five barrels produced and leave us only one. We are going to review the state’s participation in these contracts."1

Although Correa defended his friendship with Chávez, he shied away from being called a "Chavista." He stated, "We are stakeholders of the 21st century socialism that seeks social justice, national sovereignty, defense of natural resources, and regional integration based on a logic of coordination, cooperation, and complementarity."2 With this discourse and the support it garnered, he won the second round on the November 26 ballot with 57% of the votes.

Outside the country, Correa’s victory came as a surprise. He won overwhelmingly in the Andean Sierra, inhabited by Quechuas, garnering 75% of the votes in the province of Cotopaxi, and received more than 60% of the votes cast in nearly all of the jungle provinces. But he lost in three coastal provinces—the stronghold of the financial and banana oligarchy—despite making a strong showing in several of them; in Guayas, the home of Guayaquil, the country’s second most important city, with 43% of the vote.3

Wasting no time, Correa quickly proposed a constituent assembly. Congress immediately objected, arguing that its 100 members would continue in session even if an assembly met. Nevertheless, Correa intends to give the constituent assembly the power to revoke the parliament and dismiss all its elected officials. On March 1, the Supreme Electoral Tribunal (TSE) called Ecuadorians to an April 15 referendum to decide whether to convene a constituent assembly. The executive branch cannot directly call for a constituent assembly. Moreover, since Correa did not run candidates for Congress and thus lacked allies there, a majority of congressional representatives—57 of 100—refused to call for the referendum. Therefore, it was necessary for the TSE to call the referendum.

In early March, a majority in Congress voted to dismiss the president of the TSE for calling the referendum, even though he had been appointed by Congress. The TSE retaliated by dismissing the 57 deputies who had voted to fire the president of the TSE, on the grounds that the law requires the removal of officials who obstruct an electoral process.4 The power struggle shut Congress down for a month.

The administration ratified the TSE’s ruling and maintained a police guard around Congress to prevent the dismissed legislators from entering the building and holding session. When Congress reconvened on April 10, a majority of its representatives were alternate deputies who had officially replaced those fired by the TSE. This new Congress was a recognition of the validity of the dismissal of the 57 deputies. Correa’s perseverance had prevailed, since he was able to weather the crisis without violating the law, and finally gain approval for the referendum on a constituent assembly. Moreover, the appointment of alternate deputies gave him a majority in Congress.

Clearly, Correa could not have gained the upper hand in this confrontation were it not for his strong popular support (70% according to polls) and the enormous discredit of the "partocracy," as Ecuadorians call their political system, alluding to the widespread perception of the corruption of politicians. The next step for Correa is the election of the 130 delegates to the constituent assembly, to be held in October and November of this year. One hundred delegates will be chosen in provincial districts, 24 in national districts, and six by emigrants in Europe and the United States.

A New Social Movement

Right-wing parties have had a stranglehold on political life and government machinery for 25 years in Ecuador. Even the former managing director of the IMF, Michel Camdessus, once noted that Ecuador is characterized "by an incestuous relation between bankers, political-financial pressure groups, and corrupt government officials."5 Those "corrupt officials" are in reality the politicians of Álvaro Noboa’s Institutional Renewal Party of National Action (PRIAN), Lucio Gutiérrez’s Patriotic Society Party (PSP), the PSC, and the Christian Democratic Union, which have long divvied up government posts and benefits. Because of this collusion, Congress and politicians are trusted by only 5% of the population. This allowed Correa to win the election—in particular, because he did not run with any candidates for Congress.6

The country’s 17 largest economic groups own 563 companies with US$5 billion in revenue, or 14% of Ecuador’s gross domestic product. But in their income tax statements for 2005 they declared only 6% of their total revenue.7 Grupo Noboa, owned by Álvaro Noboa, alone controls 144 companies with US$575 million in revenue in 2005 and US$3.9 million in profits. But the group’s income tax statement declared only US$978,000.8 These figures provide just a glimpse of the conduct of the economic groups that dominate the country, which are the constituency of the right and oversee the appointment of corrupt officials who allow them to evade taxes. These groups fear that a transparent government would put an end to their fabulous profits.

The "citizens’ movement" that has emerged in the last decade to oppose this state of affairs brought Correa to power. Economist Pablo Dávalos argues that three important actors have emerged in recent decades: workers, whose strength was undermined by the neoliberal model; indigenous peoples who despite their leadership role have been weakened by their own "dynamics, speeches, and proposals;" and the new citizens’ movement, which represents a broad-based and heterogeneous range of interests and whose main objective is "political reform."9

This is not a traditional movement or one that has a clearly defined profile. However, it represents a deep moral reaction of the citizenry. "It proposes the moralization of the liberal political system, by neutralizing political parties’ influence over oversight agencies, elections, and justice, and by bringing about procedural changes in how representatives are chosen and in the exercise of power. Among other measures, these changes would allow for the removal of elected officials, anticorruption mechanisms, and greater scrutiny of the political system."10 The "moralization" of politics might not seem like much from the perspective of the old left, but in Ecuador it would be an authentic revolution. What is undeniable is that this diffuse movement is changing the country: first it threw out Gutiérrez and now it has put Correa in the presidential palace.

Unlike previous movements, the current citizens’ movement is made up of urban middle classes that indulged themselves in consumerism with the neoliberal model and now demand a working democracy. These sectors have benefited from dollarization and above all from the remittances sent by emigrants. Between 2000 and 2005, two million Ecuadorians—out of a population of twelve million—left the country. In 2006, they sent home US$3 billion, a fabulous sum that rivals the annual US$3.6 billion from oil sales, Ecuador’s most important export. That money arrives directly to families and lubricates mall-based consumption. For Dávalos, "the middle-class sectors want the political system to work with the same transparency with which they believe the market works."11

The challenge faced by President Correa is to make the political system transparent and efficient, that is, to overhaul it. First, he must overcome the resistance of the elites and of government officials. Second, he must solve the conundrum of dollarization, which has turned the country into a colony of the United States economy. Moreover, he must maintain his positions on defense of national sovereignty and resisting the renewal of the Manta airbase contract. If Ecuador readopts the Sucre, the middle classes will feel cheated since it will reduce their buying power. But if it fails to do so, millions of campesinos and poor urban dwellers, mostly indigenous persons whose livelihoods were destroyed by dollarization, will be further impoverished. Sooner or later, Correa will have to choose between dollarization’s winners and its losers. A difficult choice—but one he will not be able to avoid.

End Notes

1. Maurice Lemoine, op. cit.
2. Ibid.
3. Figures from the Supreme Electoral Tribunal (TSE), 28 November, www.hoy.com.ec
4. Kintto Lucas, op. cit.
5. Quoted by Roger Burbach in "Ecuador’s Nascent Leftist Government Victorious in Confrontation with Right," in Countercurrents, 26 March 2007.
6. Eduardo Tamayo, op. cit.
7. Ibid.
8. Ibid.
9. Pablo Dávalos, op. cit.
10. Ibid.
11. Interview of Pablo Dávalos.