Stephan Kueffner, Bloomberg News

QUITO
EnergiesNet.com 04 22 2024

Ecuador’s voters approved a raft of security measures including extradition for drug traffickers, while rejecting investor-friendly economic reforms, handing a partial victory to President Daniel Noboa in Sunday’s referendum. 

All nine of Noboa’s proposals to step up his war on cocaine cartels passed easily, according to the quick count published by the electoral authority. However, voters rejected by large margins proposals to liberalize the labor market and allow international arbitration for foreign investors in the country. 

The vote was the first hard test of Noboa’s popularity since he took office in November, and shows strong support for his anti-gang policies, which are key for his hopes of winning re-election next year. But defeat on the economic measures weakens his mandate to implement painful reforms if, as expected, a new deal with the International Monetary Fund is announced in the near future. 

The vote breakdown shows that Noboa is “still the frontrunner” in next year’s election, though the odds of a first-round victory have dropped, said Risa Grais-Targow, an analyst at Eurasia group. The rejection of the economic proposals might disappointment bondholders, she said. 

Read more: Ecuador Bonds Gain Most in EM as New IMF Deal Nears

Noboa, 36, saw his approval ratings soar when he declared a state of emergency and put the army on the streets to fight the organized crime gangs that have made the nation of 17 million more violent than Mexico and Colombia. 

While homicides have declined, the nation remains extremely violent. Almost 40,000 troops were deployed to provide security at polling stations and mayors of two mining towns in southwest Ecuador were assassinated within hours of each other just days before the voting.

Backing for Noboa’s other policies is more fragile, after he raised taxes despite having promised to cut them, and failed to fulfill a pledge to fix rolling blackouts.  

Noboa, the US-educated son of wealthy banana exporters, won last year’s presidential election, but only to serve out the term of Guillermo Lasso which ends next year. The country holds another general election on Feb. 9.  

The referendum took place amid an international crisis triggered when Noboa sent police into Mexico’s embassy this month to arrest a former vice president convicted of corruption. Ecuador’s violation of diplomatic protocols caused widespread international condemnation, but many locals rallied behind the government. 

bloomberg.com 04 21 2024