Ecuador: A wannabe Chávez short of oil

Aug 30th 2007 | QUITO
From The Economist print edition

Rafael Correa (pictured left) tries his own version of “21st century socialism”

AP

NELSON ZAPATA has been shining shoes in the shadow of the Carondelet palace, the elegant colonial seat of Ecuador's presidency, for 25 years. In the past decade, he has seen no fewer than eight heads of state come and go, three of them ousted by an irate populace, political intrigue or both. He has greater faith in the current incumbent, Rafael Correa. “I'll be voting for his movement,” he says, with a jerk of his thumb at the palace. Mr Correa is counting on the likes of Mr Zapata to give him a majority in an election on September 30th for a Constituent Assembly to draft a new constitution—the 19th such document in a national history of fewer than 180 years.

The election is a gamble for Mr Correa, a young left-wing economist. Win, and he will rewrite the political rules, place supporters in the institutions of state, and perhaps last longer in power than many of his predecessors. Lose, and the assembly could make him the fourth consecutive elected president not to finish his term.

His fate will be watched beyond the borders of Ecuador. A proponent of “21st century socialism” like his mentor, Venezuela's Hugo Chávez, he forms part of a radical anti-American axis that also includes Evo Morales in Bolivia and Nicaragua's Daniel Ortega. His government's slogans are a conscious echo of Venezuela's (“Now the nation belongs to all of us,” proclaim the billboards) and the political methods are similar. Just like Mr Chávez, Mr Correa rails against the “oligarchy” and has an adversarial relationship with the media (he has called journalists “wild beasts”). Behind every setback, manipulating the opposition from the shadows, he perceives the evil intent of “the empire” (ie, the United States).

Certainly, much needs changing in Ecuador, whose self-serving politicians have presided over economic mismanagement and corruption. But in the seven months since he came to power, Mr Correa has disillusioned some of those who voted for him, by seeming to embody some of the same vices he is supposedly committed to eradicating. When Congress removed his economy minister, who was caught on video in an apparent plot to manipulate the debt market for profit, the president rewarded him with another ministry.

Mr Correa's political experience is limited to striking radical poses rather than engaging in the art of the possible. Thus, it is not clear what “21st-century socialism” means in practice. “It is an invitation to an open discussion,” admits Fernando Bustamante, the cabinet minister in charge of security and political co-ordination. He says that the government is not just split between radicals and social democrats: its “pluralism is much greater”. It includes some traditional politicians.

In office, Mr Correa has combined populist handouts with incendiary talk that has alienated the middle class. That has eroded his initial, overwhelming popularity. Polibio Córdova, of Cedatos-Gallup, a polling firm, says that the president's approval rating dropped by 17 points between April and July (to 59%). “People say he doesn't handle himself like a statesman,” Mr Córdova says. “He doesn't call for dialogue, he argues and fights.”

In Venezuela, Mr Chávez laid the basis for his virtual monopoly of power through a Constituent Assembly in 1999. In Bolivia, Mr Morales has attempted to do the same. His supporters won a majority in a Constituent Assembly, but have met stubborn resistance from a well-organised opposition. After a year, Bolivia's assembly has yet to agree a constitutional draft, and this week the opposition staged strikes in half the country in protest at an attempt by Mr Morales to oust four of the five constitutional court justices.

Unlike Mr Morales, Mr Correa lacks a strong political movement. He cannot be certain of winning a majority in his assembly, though he can probably deploy his popular appeal to scrape one together. Mr Correa's strongest card is the discredit of his opponents in the traditional parties and their businessmen friends. And he has cemented support by doubling a monthly payment to poor families. Mr Chávez recently turned up in Ecuador with an offer to build an oil refinery that seemed intended to boost his ally's electoral chances.

Changing a constitution adopted only a decade ago is hardly the most effective way to address the problems of ordinary Ecuadoreans. These include unemployment, poor education and health services, and an economy growing at an annual rate of 3-4%, half that in neighbouring Peru. Ecuador adopted the dollar as its currency in 2000, after suffering hyperinflation and a financial collapse that saw 1m people migrate. That brought stability, but non-oil businesses struggle with low productivity in a largely unreformed economy.

Unlike Mr Chávez, Mr Correa is unlikely to be saved by an oil windfall. Ecuador is a modest oil exporter, but output is falling. Lack of refining capacity means that it must import expensive petrol and lubricants. Above $70 a barrel, analysts say, the country will be a net loser from further oil price increases.

On the streets, many people seem prepared to give Mr Correa and his assembly a try, but more for want of any other suggestions for ending chronic instability. It is not yet clear whether the president has anything to offer except political confrontation, a constitutional circus and a stronger grip over the economy by an ineffective state. For their part, some of his supporters prefer to believe that Mr Correa is up against forces too powerful to defeat. “I don't think they'll let him do it,” says Mr Zapata. “One or two years, and they'll kick him out.” If so, it might be that the high tide of Mr Chávez's influence in the region has already passed.