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balcony Quito Ecuador

Runoff vote in Ecuador: Has President Correa failed?

A runoff vote it is then. Ecuadorians will have to go to the polls again in April after Lenín Moreno, the candidate of Correa‘s ruling leftwing Alianza PAIS movement, had fallen just short of the votes necessary to secure the presidency, a minimum of 40 % and a 10-point lead over any other candidate, in last Sunday’s first round.

With more than 95 % of the valid votes counted, it is now a fact that President Correa’s anointed candidate Moreno will have to stand in a second round against career banker Guillermo Lasso, a conservative. President Correa was not allowed run again after three (!) terms at the helm of the South American country.

The April vote will surely test the legacy of Correa, the self-declared leader of 21st-century socialism. But wasn’t his candidate supposed to win in a landslide?

Left or Right or what?

Well, not really. After more than ten years with the same president, Ecuador is looking for a change. For the record: Correa and Moreno, his former vice-president, got many things right. They successfully focussed on poverty reduction, innovation, infrastructure, disability rights and closer Latin American integration – the latter with less success due to some of Correa’s more radical policy stances. At the same time, voters are fed up with some of Correa’s confrontational policies and his aggressive rhetorics towards the media. Although more soft-spoken, Moreno wasn’t able – or willing – to emancipate himself from his mentor.

As regards external relations, Correa famously granted Wikileaks founder Julian Assange asylum in the Ecuadorian embassy in London – a bold foreign policy move for such a small country.

The Correa administration was blessed with record-high commodity prices to finance their endeavours. But long-term public infrastructure budgets in excess of ten % of GDP are just not sustainable (other South American states invest around one % of GDP).

Guillermo Lasso, on the other hand, vehemently attacked the government, blaming it for the recent economic downturn (a terrible earthquake in 2016 is at least partly to blame, too) and corruption scandals. Odebrecht (different family branch), a Brazilian construction firm, paid some 31.5 million euros in bribes to Ecuadorian officials between 2007 and 2016. Understandably, a great deal of his criticism stuck with the voters. He vows to cut taxes, boost employment (somehow) and cut overall government spending. Plus he wants to see Assange leave the Ecuadorian embassy.

While Correa/Moreno rely on Chinese loans and investment (clearly visible during my last visit to Ecuador), Lasso may reach out to the US and the IMF. Good luck asking Trump for money.

Middle ground

President Correa, despite all the useful policies he has initiated, needs to be out of the picture. National policies cannot solely rely on Chinese investments or favourable world commodity prices. But the common conservative economic policy formula in South America, a mix of heavy tax cuts for multinationals and accelerated privatisation of public infrastructure, including the nation’s crown jewels, won’t help either.

In a perfect world, the old left-versus-right-divide, particularly harmful to the region’s steady progress, could be overcome. Correa’s vision of a South American Silicon Valley should be paired with liberal migration and tax policies (for small and medium-size businesses) in order build an innovative work force and future-oriented (digital) economy.

One should never stop dreaming.

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