Ecuador

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Presidential Crisis

In 1996 voters elected Abdalá Bucaram, from the populist Ecuadorian Roldosista Party, as president. Bucaram, who campaigned on a promise of government aid for the poor, retreated from this position after the election and introduced an economic plan that bore a striking resemblance to that of preceding administrations. The removal of government subsidies on basic consumer goods and subsequent price increases triggered massive demonstrations. The business community, along with those who had voted for Bucaram, also expressed outrage at the rampant corruption and wild antics of the president.

In February 1997 the National Congress voted to remove Bucaram from office by declaring him “mentally unfit to govern.” Congress voted to replace Bucaram with Fabián Alarcón, president of the Congress. Later in 1997 a Constitutional Assembly was elected and charged with writing a new constitution.

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Recent Developments

In 1998 Jamil Mahuad, the mayor of Quito and the candidate of the People’s Democracy Party, was elected president. In addition to an enormous foreign debt, Mahuad faced massive inflation, an economic downturn, and crop failures due to El Niño flooding.

Mahuad announced a series of austerity measures designed to get the nation’s unsteady economy back on its feet. The government eliminated gasoline and electricity subsidies, announced plans to reduce the number of government employees, and began plans to sell state-owned companies, including the government-run oil company, to private businesses. Widespread strikes and public demonstrations followed the announcement. In response, Mahuad reinstated the gasoline subsidy and said he would reevaluate his austerity program. The economy continued to worsen, however, with inflation remaining high and the currency, the sucre, losing much of its value.

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On January 21, 2000, junior military officers led a bloodless coup. Vice President Gustavo Noboa Bejarano took office as president the following day, after the United States threatened to cut aid to Ecuador. In March 2000 the U.S. dollar replaced the sucre as Ecuador’s official currency. The government also opened Ecuador’s oil, electricity, and telecommunications industries to more foreign investment. The International Monetary Fund (IMF) then announced a $2-billion aid package for Ecuador.

In 2002 Lucio Gutiérrez, a former army colonel who participated in the coup that ousted Mahuad, won the presidency of Ecuador. Gutiérrez had received the support of many indigenous organizations and left-wing political parties. But he soon proposed economic austerity measures along the lines of his predecessors to pave the way for further IMF loans. In the process he lost political support.

In mid-April 2005 Gutiérrez dissolved the Supreme Court, reportedly with the aim of placating protesters who had accused him of stacking the court with his political supporters. But the move backfired and led to violent street protests. On April 20 the National Congress removed Gutiérrez from office and replaced him with the elected vice president, Alfredo Palacio, who was sworn in to complete Gutiérrez’s term.

The 2006 presidential elections led to a November runoff between Rafael Correa, a leftist economist who ran as the candidate of the Alianza País, and Álvaro Noboa, a billionaire businessman who helped found the Prian Political Party. Correa easily won the runoff with about 57 percent of the vote. The Alianza País was the name given to the coalition that supported Correa. But the alliance was not set up as a political party and did not run any candidates for Congress.

The election attracted international attention because Correa’s victory continued the trend of leftist electoral victories in Latin America, following on the heels of similar electoral wins for the left in Argentina, Bolivia, Brazil, Chile, and Nicaragua. Correa proclaimed himself an admirer of Venezuela’s socialist president Hugo Chávez. He campaigned against IMF austerity measures and promised to renegotiate Ecuador’s foreign debt. Correa also raised the possibility that Ecuador would rejoin the Organization of Petroleum Exporting Countries (OPEC) and would not renew a lease for a U.S. military base.

In the months following Correa’s election, Ecuador’s Congress blocked many of the reform measures he sought to implement. In response, Correa called for the election of a special assembly to rewrite Ecuador’s constitution, a measure that he said would open up the democratic process in Ecuador and give more rights to its indigenous population. Resentment toward corruption in Congress was reportedly one of the major reasons for Correa’s presidential victory in 2006.

In the elections for the special assembly on September 30, 2007, Correa’s Alianza País reportedly won more than 70 of the 130 seats. Correa went outside the traditional parties to recruit candidates for the Alianza País, drawing from trade unions and human rights and farmers’ organizations. The assembly was to convene in November and begin drafting a constitution, which is to be submitted for approval in a nationwide referendum. The assembly may also vote to dissolve Congress and call for elections to a new legislative body.

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