I was a little taken aback last week when I told a high-minded Peruvian journalist I would be traveling to Quito to cover the presidential elections. Correa! she said, eyes alight, eyebrows waggling, her elbow giving me a knowing dig in the ribs.
I might have written this off as a case of sensory deprivation brought on by years of covering the none-too-pretty underbelly of Limeño politics, were it not for the groupies at Rafael Correa’s final Quito campaign rally this week. Starry-eyed, perfectly coiffed, with heavy eyeliner—and I think in one case, false eyelashes—they jostled for position at the barricades demanding to know when El Presidente would be there. Granted this was a political rally, and flag-waving, chanting and fist-waving are par for the course. But there is no denying the man has charisma.
And for now, it seems, he has the trust of the people. Correa’s closest rival, Lucio Gutiérrez, the former president ousted in 2005, outpaced expectations. But even so he raised the possibility of fraud. Exit polls, though, still show the president with a convincing margin of victory.
The 46-year-old economist is an unabashed populist: he does best when battling perceived elites, such as former politicians, bankers, foreign investors, and the United States.
In a country with 39 percent of the population living in poverty, and where 21 presidents have come and gone since 1997, many voters at polling booths in Quito said that Correa had given them stability for the first time in years.
“Before Correa we had constant strikes and protests,” said Victor Hernando Maldonado Espinal. “Now we have peace. He keeps his promises.”
José Melo, 28, said, “Mr. Correa was the only president in many years who cares about the people and Ecuadorian values. He cares about the Quechua language, Pachamama [the Andean earth mother deity] and equal rights for women and the poor.”
But Mr. Correa’s opponents say that depressed oil prices, dwindling remittances and a looming deficit mean that President Correa can no longer be able to afford his vision of twenty-first century socialism. Unlike his ally, Venezuelan President Hugo Chávez, Mr. Correa has ruled out nationalizing industries, and his ambitions are domestic rather than regional. He has also signaled he will support the banking sector, giving some latitude for increasing interest rates to offset falling desposits, and is open to investment in mining, although on his own terms.
Without a significant change in his economic policy, Ecuador is in for a difficult time, said Jaime Carrera, a Quito-based economist. He says the country is overly reliant on its main export (oil) and on remittances from Ecuadorians living in Spain and the United States. He is forecasting negative growth for 2009 and a worrying increase in unemployment and the number of Ecuadorians who earn just enough to survive on.
Dollarization is also exacerbating Ecuador’s balance of payments woes, fueling speculation that the President, who is no fan of the U.S. dollar, will try to ditch the currency and return to the sucre. Mr. Correa and senior ministers have repeatedly ruled this out, and in the meantime imposed some of the world’s strictest protectionist measures, including restrictions on 8.7 percent of 2008 imports. This has severely strained relations with its Andean neighbors.
For Isabella Crespo, a bright, young Quiteño who is still six years shy of Ecuador’s voting age, this means a catastrophic lack of supply of Jolly Rogers, her favorite sweet. “I love them and Correa says we can’t have them any more,” she said.
Her father, economic analyst Ramiro Crespo, had been unaware of the Jolly Rogers shortage, having been focused on the Correa administration’s foreign debt default (on the grounds that it is illegitimate) and its buyback offer of 30 cents on the dollar.
Mr. Crespo said the drop in oil prices and the global financial crisis had taken Mr. Correa by surprise, but that the president had shown some flexibility in his economic management. In the past month he has been less ideological and more practical, talking to the private sector, he said. But if he doesn’t change more than that, “we are not going to grow like other countries,” according to Mr. Crespo. For example, Chile and Ecuador had the same size economy in the 1970s and around the same population. Today, Chile’s GDP is $150 billion while Ecuador’s is $50 billion. Worse still, Ecuador may be missing another opportunity for growth.
In the government palace yesterday, flanked by guards in smart royal blue and gold livery, Mr. Correa was reveling in his victory and optimistic about the future, despite external pressures. He emphasized the potential of non-traditional sources of funding, such as China, and was adamant, when I asked him, that he would maintain a rate of spending, which has seen public expenditure double between 2006 and 2008 to more than $21 billion. “Of course, my dear, of course,” he said in response to my question, but he was not forthcoming with details as to how he would maintain that type of spending.
Naomi Mapstone is a contributing blogger to americasquarterly.org. She is a journalist based in Lima, Peru.
