Ecuador’s Election: a Rejection of Neoliberalism and Extractivism?

By BEN FIRTH

It is no surprise that the President of Ecuador has declined to run again for office. Lenín Moreno has seen his approval rating fall to a record low of 7% in the face of an economy crippled even before the Covid-19 pandemic, not to mention his government being forced to temporarily flee the capital, Quito, by the deadly anti-austerity protests of October 2019. What has come as a surprise, however, is the surge in support for the Indigenous Pachakutik party and its candidate, Yaku Pérez.


Of the main players in the February 7th election, Andrés Arauz will certainly be happiest. He is the leader of the left-wing Union for Hope coalition and is closely associated with the widely popular former-President, Rafael Correa, who’s ‘Correísmo’ was one of the harder left instalments of the ‘Pink Tide’ seen across Latin America. In second place, with 19.7% of votes, came the conservative banker Guillermo Lasso, controversially just 32,000 votes ahead of Pérez. Also springing a surprise was the TikTok user Xavier Hervas, the Democratic Left party candidate who came away with 16% of the vote. Two-thirds of the National Assembly will now be made up of left of centre parties.


Pérez alleged fraud and led a ‘March for Democracy’ toward Quito in protest against the decision to not hold a recount, despite the fact he was just 0.4% of votes behind Lasso. The National Electoral Council was divided and ultimately could not agree to hold a recount. However, in spite of his failure to progress to the run-off, the significance of his dramatic rise should not be underplayed.


Undoubtedly a significant factor in this election was the IMF package agreed by President Moreno in 2019. It secured a $4.2 billion loan, with the condition that the government reduce its budget deficit. The consequences of these IMF conditions once again reared their ugly head; austerity measures hit Ecuador’s poorest the hardest. Growing inequality, apparently intrinsic to the IMF’s neoliberal approach, was epitomised by the withdrawal of fuel subsidies which saw prices double. Meanwhile, unpaid income tax at the time from Ecuador’s wealthiest amounted to more than the IMF loan itself.


Fast-forward to this year’s election and it is not hard to see the results as a repudiation of neoliberalism and the IMF’s involvement in Ecuador. With 32.72% of the vote in the first-round, Arauz will be the favourite to win the run-off, indicating support for Correísmo and its combative stance toward the IMF. The popularity of Pérez may also have been boosted by the fallout from the IMF imposed austerity. 2019’s protests were led primarily by the Confederation of Indigenous Nationalities of Ecuador (CONAIE), of which the Pachakutik party is the political branch. So, both Pérez and Arauz would provide an alternative to Moreno’s catastrophic approach, but what could have drawn so many voters to the Indigenous candidate? Indigenous candidates don’t have a history of performing well in Ecuador’s elections because, after all, the Indigenous population is relatively small compared to other Latin American countries. Less than 10% identify as Indigenous, making Pérez’s rise all the more impressive.


What sets Pérez apart then, is that his self-styled ecosocialist approach provides an alternative to Correísmo, a brand which represents an outdated approach. This approach carried the Pink Tide across Latin America but can now carry it no further. It is somewhat a one-trick pony, as it relied on an extractivist economy to reap rewards during the commodities boom which allowed the likes of Correa to reject neoliberal intervention as he could afford to promise copious amounts of government spending. However, this plundering of natural resources is at odds with the climate emergency which everyone, including the Ecuadorian electorate, are beginning to wake up to. Perhaps they were always aware, but the relative prosperity brought about by soaring commodity prices outweighed the unseen negative externalities. But as commodity prices and then government spending have fallen, the only benefit to the people of this environmental pillaging has been lost.


Unsurprisingly, Pérez has always opposed Correísmo, he has long been a fierce and well-known opponent of mining and the privatisation of water in Ecuador. He was arrested four times during the Correa presidency, including being charged with sabotage and terrorism. Whilst Pérez has been fighting Correísmo for decades, it now seems that a significant group of Ecuadorians are willing to join the fight. His proposals, including a promise to hold a referendum on the ban of all new mining projects, have been met with an overwhelmingly positive response and it seems that more Ecuadorians are responding to his calls for the country to move to a post-extractivist economy.


Such a dramatic change still feels like a distant reality, but whilst Pérez fell short of becoming President this time, his Pachakutik party is now the second largest in the National Assembly and will clearly wield some influence over the next administration. As the effects of climate change will be hardest felt in regions like the Amazon, which houses the majority of Ecuador’s Indigenous populations, maybe Ecuador’s first Indigenous President is on the horizon.


Image: Unsplash (Cesar Viteri)

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