November 25, 2006
Mark Weisbrot
WashingtonPost.com, November 25, 2006
See article on original website
Ecuadorians go to the polls on Sunday with left economist Rafael Correa running against billionaire banana magnate Alvarao Noboa, the richest man in the country. Voting for the leftist economist could finally undo Washington’s failed economic prescriptions in the country.
Noboa had given out cash, computers, and medicine at his rallies in this poor country. He has promised much more if he wins. He beat Correa by four percentage points in the first round on October 15, but has since seen a 16 point lead in the two-way runoff fade into a statistical tie. Noboa’s campaign tried what the Latin American right has recently come to see as a winning formula, conjuring up images of his opponent becoming “another Chavez” and turning Ecuador into a dictatorship.
Much of the international press has gone along for the ride, referring to Correa as an “ally of Chavez” in headlines and news articles, even though Correa has met Chavez only once and has not given any indication that he seeks to ally Ecuador with or against any other nation. The whole media framework smacks of an outdated Cold War mentality and obscures much more than it explains with regard to Latin America’s rapidly changing political reality. Why isn’t President Lula da Silva of Brazil described as an “ally of Chavez?” Just last week Lula made Venezuela his first foreign trip after being re-elected, flying there to preside over the dedication of a new Brazilian-financed $1.2 billion bridge over the Orinoco river. Lula lavished praise on Chavez, making what was practically a public endorsement of the Venezuelan president as he headed into the final weeks of his own re-election campaign.
Correa, for his part, has refused to be intimidated by the media or his opponent. When asked about Chavez on national television, he defended Venezuela’s social programs that have brought free health care and increased access to education for millions of poor people. He forcefully corrected his interviewer with some facts: Venezuela is not an authoritarian state but a democracy, he explained, and has an oppositional media that attacks the president on a daily basis. A recent poll in Ecuador found that 86 percent of the population admires Chavez.
Correa has promised to make poverty alleviation his top priority, even if that means renegotiating some of Ecuador’s $10.2 billion foreign public debt. This has rattled the bond markets and provided another scare tactic opportunity for his opponents, who have suggested that his election could provoke an economic crisis. Memories of the late 1990s economic crisis, which set off one of the largest waves of emigration in Ecuador’s history, are still fresh. But the conditions that created that crisis are no longer present. Most importantly, in 2000 the country adopted the dollar as its national currency, thus eliminating the currency risks that played a prominent role in the financial crisis, and bringing inflation down from 96 percent in 2000 to just 3.3. percent today.
The country is running a budget and trade surplus, and the economy is unlikely to be upset by the election of a left candidate who wants to capture more revenues from foreign energy companies – oil comprises 58 percent of Ecuador’s exports – and invest in health care and education for the poor. That strategy has proved successful for Bolivia, which has increased its take of natural gas export revenue by billions of dollars and is doing quite well under the left government of indigenous leader Evo Morales.
Noboa has presented himself as a staunch ally of U.S. foreign and commercial policy in the region, supporting a proposed “free trade” agreement and pledging to break diplomatic relations with Venezuela and Cuba. Correa has rejected the proposed trade agreement and said he would not renew the lease on a U.S. military base at Manta when it expires in 2009.
But it does not look like outcome of this election will affect commercial relations with the United States. The White House has endorsed the extension of the trade preferences that give both Bolivia and Ecuador duty-free access to U.S. markets – which expire next month — and the new Democratic Congress is likely to agree. The trend in recent years has been for Washington not to retaliate against Latin American voters who elect left governments. Even in Nicaragua, where U.S. officials threatened economic sanctions if leftist Daniel Ortega were to win the presidency on November 5, nothing seems imminent since he’s won.
It’s a new world, and fear may no longer be enough to keep Latin Americans from voting for change.
Mark Weisbrot is Co-Director of the Center for Economic and Policy Research in Washington, D.C. and President of Just Foreign Policy. He received his Ph.D. in economics from the University of Michigan. He has written numerous research papers on international economic policy.
He writes a column on economic and policy issues that is distributed to over 550 newspapers by McClatchy-Tribune Information Services. His opinion pieces have appeared in the Washington Post, the Los Angeles Times, the Boston Globe, and most major U.S. newspapers. He appears regularly on national and local television and radio programs.
