Ecuador's enigmatic Correa

By EDWARD SCHUMACHER-MATOS,
North County Times, Friday, May 1, 2009

WASHINGTON ---- What should the United States do with Rafael Correa? Re-elected president of Ecuador on Sunday, he may be Latin America's most psychologically fascinating and intellectually frustrating leader.

Correa crimped the American war on drugs by ordering the closure this November of the only U.S. air base in South America. He thumbed his nose at Wall Street by defaulting on $3.2 billion in foreign debt, and then last week offered to pay back 30 cents on the dollar. He has put the mighty Chevron oil company against the legal ropes in a pollution case that is nearing its end and may cost the company up to $27 billion in damages, more than it earned last year. And he has copied Venezuela's Hugo Chavez in consolidating his personal power and lurching leftward.

But while other leftist Latin populists such as Chavez, Bolivia's Evo Morales and Nicaragua's Daniel Ortega are street-smart but intellectually weak, Correa is a scholarship kid who was educated in excellent private schools, studied in Belgium and holds a doctorate in economics from the University of Illinois. He understands free markets well, likes the United States, and was a professor and policy wonk in Ecuador before emerging from almost out of nowhere three years ago to become the most charismatic and powerful politician his country has seen in perhaps a century.

His personal story is dramatic. When Correa was a child, his father spent three years in a U.S. jail for being a "mule," or minor drug carrier. "These people aren't criminals," Correa replied emotionally when opponents revealed the information. "They are single mothers or jobless people who desperately try to feed their families."

Last year, at Correa's urging, Ecuadoran lawmakers freed all jailed "mules" who had been caught with less than 4.4 pounds of cocaine and who had served at least 10 percent of their sentence. His family history is said to influence his limited cooperation with the United States in the drug fight, although the expiring American base lease was widely unpopular among Ecuadorans anyway.

Even more fundamental to Correa's political personality was a year he spent as a Barack Obama-like community organizer. Working for a Salesian Catholic mission in the Andes, he taught poor rural Indians and helped them develop businesses. He remains deeply religious from the experience. He is said to keep a picture of the pope on his desk.

Correa, now 46, privately tells American friends that he is Ecuador's best hope for holding off the country's far left and radical indigenous leaders. Publicly, he says he is building "Christianity of the left," a "citizen revolution" and "socialism for the 21st century."

Correa, who did his doctoral thesis on income gaps, has tripled state spending on education and health care, doubled monthly payments to single mothers (to $30) and raised the minimum wage. A new constitution separately addressed a governing crisis ---- popular revolts ousted the last three presidents ---- by strengthening the presidency at the expense of Congress, the courts and the central bank.

The questions are whether Correa will abuse his power or can sustain the spending. Income from oil exports and remittances from the 3 million Ecuadorans living abroad have plummeted this year. Correa hasn't nationalized any businesses, but his tough regulation of foreign investors and debt stance, while popular, have reduced his financing options. He is seeking $1 billion in loans from China.

Obama may have more say about his fate. About 350,000 jobs in Ecuador rely on Andean trade preferences with the U.S. that are up for renewal this year.

Chevron wants approval used as leverage in its case. As a senator, Obama sided with Ecuador, in part thanks to an appeal by a former Harvard Law classmate representing the country. The personal link is irrelevant. The company should be sent packing because it cynically got the case moved from New York to Ecuador, thinking it could get a better ruling there.

Trade renewal should be made contingent on drug collaboration, however. The preferences were designed specifically to encourage alternative businesses to drug trafficking. The drug war is a mistake in many ways, but it is reasonable to expect cooperation on interdiction efforts, even if the air base is shut down. The economist in Correa surely knows that the trade preferences are not an Ecuadoran right. The U.S. under Obama has finally admitted that it shares blame for drug trafficking. It falls to Correa and Ecuador to do their part.