Last week massive protests erupted in Ecuador. President Lenín Moreno, a moderate reformer, turned to the International Monetary Fund (IMF) for a much-needed economic stimulus. In a story that is all-too-familiar in the region, the loan came with strings attached: the government had to reduce public spending for the $4.2 billion financing deal to be approved.
Moreno started by signing the now-infamous Decree 883 that unilaterally ended a fuel subsidy aimed to save the government budget $1.3 billion per year. The move immediately backfired. Protests were the largest to rock Ecuador in about a decade and escalated to such a point that they threatened the survival of Moreno’s government. The severe magnitude of demonstrations, which left seven dead, even forced the president to relocate the government from the country’s capital Quito to Guayaquil temporarily.
While Moreno initially vowed to continue his economic program, after 12 days of protests, his government reached a deal with indigenous protesters that resulted in the government reversing its policy on fuel subsidies. The decision, in turn, leaves Moreno’s government in a weakened position. Now Moreno faces his biggest political challenge yet: avoiding having to prematurely step down from office and seeing his government through a constitutional term that ends in 2021.
Moreno and Correa: from close allies to bitter rivals
In hindsight, a Moreno presidency is difficult to imagine without the support of his one-time-ally-turned-scornful-rival, Rafael Correa. Although Moreno participated in leftist parties during his youth, he was mostly unknown to most Ecuadoreans before joining the ranks of Correa’s leftist Alianza PAIS. In 2006, Moreno ran as Correa’s vice-presidential ticket. The duo won the executive office in a second-round ballot with 56.7 percent of votes.
While Correa’s government ended a decade of political instability that saw the rise and fall of three presidents, its political success came at a high cost for liberal democracy. A new constitution that concentrated power in the hands of the executive and recurrent clashes with the press—both signature policies of 21st-century socialism—seriously undermined Ecuador’s young democracy.
However, Correa’s popularity and luck in surfing Latin America’s commodity boom led to his reelection in 2009 and 2013. The populist leader won both elections in first-round votes by growing margins. Standing by Correa’s side was Moreno, commonly viewed as the moderate voice in the Carondelet Palace, home to Ecuador’s executive branch.
By the 2013 election, however, Moreno grew distant from Correa over the president’s attacks on the press. Jorge Glas, a veteran cabinet member, replaced Moreno as the vice-presidential candidate. Later that year, Moreno, who enjoyed high approval ratings, was appointed as Special Envoy on Disability and Accessibility by the United Nations’ Secretary-General.
In 2017, Moreno made a triumphant return to Ecuadorian politics after becoming Alianza PAIS’s presidential nominee. The party convention also nominated Jorge Glas as his vice-presidential running mate. Moreno and Glas counted with the public support of Rafael Correa. The sitting president was barred from seeking another consecutive term in office but was allowed to run again in the future.
The election proved more challenging to win than initially expected. An economic recession in 2016 and a stronger opposition led by conservative businessman Guillermo Lasso forced a run-off election, which Moreno secured with 51.2 percent of votes.
Although opponents ridiculed Moreno’s victory, saying Correa was pulling strings in the shadows, both men drifted apart months into the new administration. Moreno’s moderate platform backtracked many of Correa’s policies—particularly the attacks on the press. The new president also prioritized investigating corruption under Correa’s tenure. Feeling threatened, Correa fled to Belgium, where he currently lives thanks to his wife’s nationality. From his self-imposed exile, Correa has launched a series of attacks against the government—often labeling Moreno as a traitor.
The investigations into corruption quickly revealed irregular practices. In late 2017, a disgraced Jorge Glas was found guilty of influence peddling, embezzlement and money laundering (Moreno had previously asked for his resignation). Glas is currently serving a six-year jail sentence for his shady dealings with Odebrecht, the Brazilian construction giant.
While Moreno championed the fight against corruption, his greatest triumph occurred when voters passed a referendum that, among other reforms, ended indefinite re-election. For a moment, the outcome seemed to be the last nail in the coffin for Correa, who was expected to make a comeback in the 2021 presidential election. Yet, as recent events have demonstrated—including the public demonstrations against cutting back on fuel subsidies—Correa’s grip on power is far from being over.
Winning battles but losing the war
Despite gaining international fame for his moderation and ending some of Correa’s populist enclaves, Moreno’s honeymoon ended long ago. Ecuador—predominantly dependent on primary exports, including crude petroleum and bananas that accounted for 47 percent of total exports in 2017–has suffered from the end of the commodity boom. In 2018, the country’s annual real GDP growth was 1.9 percent, this year it is expected to contract by 0.5 percent.
Unsurprisingly, the government is on the receiving end of public discontent. In a poll published earlier this year, before the protests emerged, Moreno’s approval rating dropped from over 60 percent at the start of his presidency to barely 30 percent. The government’s unpopularity played a crucial factor in this year’s local elections in March. The incumbent Alianza PAIS took a beating by losing eight prefectures and 41 municipalities. At the same time, political forces with ties to Correísmo made substantial gains across the country.
The massive protests that shook Ecuador represent a severe but not critical hit for Moreno’s government. Faced with the possibility of being forced to resign, the president wisely decided to roll back on his economic reforms. As with every crisis, however, an opportunity has emerged. Ecuador’s public finances require change. Moreno and his allies must rethink unilateral action and opt instead to build consensus around the reforms—which necessarily implies including the demands formulated by the opposition and civil society.
Yet, as Moreno’s government weakens, his rivals grow stronger, as evidenced by Correa’s political resurgence. After winning the first battles against his controversial predecessor, Moreno could be losing the war. If Moreno fails to react, then it is not only his government that hinges on the line, but also the return of populist leadership to Ecuador’s presidency.
Lucas Perelló is a Ph.D. candidate in Politics at The New School for Social Research.You can follow him on Twitter @lucasperello
