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A U.S. Ally in Ecuador Resists a Caudillo – Mary Anastasia O’Grady / WSJ

  • President Lasso acted constitutionally to close the legislature and set an election.
Guillermo Lasso speaking on state television in Quito, Ecuador, May 17.
Guillermo Lasso speaking on state television in Quito, Ecuador, May 17.  (Bolivar Parra/AFP)

By Mary Anastacia O’Grady

Ecuador’s President Guillermo Lasso is one of only three center-right presidents in South America. But that’s one too many for former Ecuadoran strongman Rafael Correa, a leftist who has been using the political coalition he leads—Union for Hope, or UNES—to try to unseat the democratically elected Mr. Lasso.

On Wednesday Mr. Lasso fought back by using Article 148 of the 2008 constitution—drafted by Mr. Correa’s backers—to close the National Assembly. This triggers new general elections, which have been set for Aug. 20. If a runoff for president is required, it may take some six months before a new government is sworn in. Until then Mr. Lasso can lawfully rule by decree on economic matters with the Constitutional Court acting as a check on policies it deems too extreme.

On Friday, Mr. Lasso, who is a friend of the U.S., announced that he won’t stand for re-election after serving only two years of his four-year term. His abbreviated tenure is a painful reminder of how hard it is for countries to break out of the cycle of demagogic, anti-American populism that Mr. Correa represents.

The brash Mr. Correa ruled Ecuador as an autocrat from 2007-17. He threatened critics in the media with lawsuits (including this newspaper) and prison and flouted due process. He bad-mouthed dollarization, which had put an end to repeated bouts of high inflation. In 2011 he expelled the U.S. ambassador. Mr. Correa now lives in Belgium, but in 2020 he was sentenced to eight years in prison after he was convicted by an Ecuadoran court, in absentia, for bribery. If he hopes to return to Ecuador, where he is still popular, he needs a presidential pardon.

Mr. Lasso isn’t the one to ask. He was elected in April 2021 on a promise of greater economic freedom, leading to faster growth. But his side of the aisle is also striving to strengthen the rule of law.

This is the second effort in less than a year to remove Mr. Lasso from office. When bringing rent-a-mobs to the streets didn’t work, his opponents dredged up allegations of corruption.

If the president broke the law, the attorney general could press criminal charges. But there’s no case against Mr. Lasso. So instead a coalition of opposition parties in the National Assembly asked the Constitutional Court for permission to hold a political trial and impeachment vote. The court allowed it, not on the grounds that Mr. Lasso had enriched himself, but in response to the coalition’s allegation, made without evidence, that he let stand a state contract benefitting a third party.

Mr. Lasso went to the floor of the Assembly on Tuesday to argue that he is a victim of a political hit job. But when it looked like he didn’t have the blocking minority of more than one-third of the votes to save himself, he opted to use Article 148. It says that if, in the president’s “judgment,” there is a “serious political crisis and internal commotion” he may send the legislators home.

On Twitter Mr. Correa said that the move was “illegal” while the opposition howled that it was a “coup.” But it’s the opposite: The president has legally preserved the democratic process and respect for the constitution.

Mr. Lasso’s team inherited a heavy debt burden, thanks to Mr. Correa, but has tackled the problem impressively. The Finance Ministry forecasts a deficit of 2.7% for this year, down from 7.7% in 2020. The ratio of debt to gross domestic product is 55%, a reduction of 6 percentage points thanks to renegotiations with China. Lower debt-service costs and maturity restructuring have improved annual cash flow by $1.4 billion and freed up more oil output to be sold at market prices, Finance Minister Pablo Arosemena told me last week. Earlier this month Ecuador pulled off the largest-ever “debt for conservation” swap, in which the country agreed to protect the Galapagos Islands in exchange for debt reduction.

There is no U.S.-Ecuador free-trade agreement, but the Lasso government has negotiated the opening of new markets in China for Ecuadoran exports and is close to a deal with South Korea. Mercantilism remains a dominant feature in Quito’s trade deals, but increasing international commerce and commitments to open domestic markets gradually are net benefits.

Mr. Lasso’s successful Covid-19 vaccination program made him hugely popular, but his approval has since plummeted. Add to this rising drug-cartel violence and a mediocre economy and his Creo party’s yet-unnamed candidate could face rough sledding. Mr. Arosemena pledged last week to use the government’s temporary economic powers to enact changes that it hasn’t been able to get through the Assembly this year. That could boost Creo’s chances in the election. On Wednesday he declared targeted tax relief for the middle class and entrepreneurs. On Monday the government is slated to announce the creation of virtual free-trade zones to spur economic activity.

The biggest test for Ecuador may not come down to who wins the next election but whether the nation’s institutions can withstand a power-hungry caudillo—in or out of the country.

Write to O’Grady@wsj.com.


Mary Anastasia O’Grady is an Opinion Columnist, writes “The Americas,” a weekly column on politics, economics and business in Latin America and Canada that appears every Monday in the Journal. Ms. O’Grady joined the paper in August 1995 and became a senior editorial page writer in December 1999. She was appointed an editorial board member in November 2005. She is also a member of the board of directors of the Indianapolis­-based Liberty Fund. Energiesnet.com does not necessarily share these views.

Editor’s Note: This article was originally on the WSJ in the May 21, 2023. All comments posted and published on EnergiesNet or Petroleumworld, do not reflect either for or against the opinion expressed in the comment as an endorsement of EnergiesNet or Petroleumworld.

Original article

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