Correa Wins Reelection Bid AS/COA Online 04/23/09

President Rafael Correa will likely win Sunday’s election. (AP Photo)

Updated April 27 – Ecuadorians headed to the polls on Sunday for presidential and legislative elections. President Rafael Correa easily won the bid for a second term. The win came as little suprise, as surveys placed him ahead with the 50 percent of the intended votes needed to avoid a runoff election. (Alternately, he needs a minimum of 40 percent of the votes and a 10-point difference after his most immediate opponent). A gloomy financial forecast may account for his decision to hold the election with two years left in his term. Less than a week before the election, Correa unveiled a buyback plan for defaulted sovereign bonds.

Correa’s presidency has represented a period of relative stability for Ecuador. “Seven presidents in the decade following 1997. Three leaders overthrown. A banking and currency collapse. This was Latin America’s basket case,” writes Henry Manse for World Politics Review. Correa won his first term in 2006 against entrepreneur Álvaro Noboa of the Partido Renovador Institución Acción Nacional. Noboa is running again, this time in a race for second place against former President Lucio Gutierrez of Sociedad Patriótica. Gutierrez was ousted from office by Ecuador’s Congress in April 2005 and barred from holding public post for two years by electoral authorities.

Ecuador has enjoyed booming economic times since the beginning of Correa’s presidency. The economy expanded continuously for the last nine years and Ecuadorians saw poverty levels drop from 52 percent in 1999 to 35 percent in 2008. Additionally, social spending went up by 71 percent under Correa’s watch.

Correa opted to run for reelection, despite the fact that two years remain in his term. A new constitution approved in September 2008 would allow him to seek the bid for a second term, whether now or then.

Forecasts by the International Monetary Fund (IMF) could offer a glimpse into why he chose to advance the election date. The IMF estimates that Ecuador’s GDP growth rate will run at negative 2 percent in 2009 and just 1 percent in 2010. This trend is consistent throughout the hemisphere, with only Peru, Uruguay, and Chile expected to post positive growth results this year. In March, Ecuador’s Central Bank reported an overall drop in exports, GDP, and remittances. Correa’s consistently high approval ratings are showing some signs of a downgrade as well. A CEDATOS poll from March 10 found that Correa’s approval rating fell 10 points down to 60 percent in the first three months of 2009.

One week before the election, Correa’s government announced a plan to buy back defaulted sovereign bonds 2012 and 2030. The government offered to pay 30 cents on the dollar, or roughly $900 million for bonds valued at roughly $3.2 billion  Finance Minister Diego Borja assured that the government has the money for the transaction using funds previously allocated to make interest payments. As Goldman Sachs analyst Alberto Ramos explains, Quito might have already repurchased some of the bonds on the sly in the secondary market by taking advantage of dropping bond prices after the default. Vistazo magazine also questioned the proposal, wondering where the money was coming from to pay for the bonds.

Correa believes investors will rally behind his government’s proposal. But the Wall Street Journal and Reuters report that some bondholders will refuse the offer and file lawsuits instead to get full compensation.

To ensure transparency in the elections, more than 200 international observers arrived in Ecuador this week. El Universo offers complete coverage. Angus Reid Global Monitor provides a backgrounder on the new constitution and the 2006 presidential election.

Read the article originally published at the AS/COA website.

Bogotá-Quito Ties Still Run Cold AS/COA Online 03/05/09

Ecuadorian soldiers fly over a border area close to Colombia. (AP Photo)

Diplomatic relations between Bogota and Quito remain broken a year after a border standoff. A March 2008 raid by Colombian authorities on a guerilla camp took out the second of the Revolutionary Armed Forces of Colombia (FARC) in command and more than 20 others. The attack, made on Ecuadorian territory, also spurred a military buildup by Quito and Caracas on their Colombian borders. Within weeks, the threat of conflict was defused. Still, squabbles continue between Colombia, Ecuador, and Venezuela, even with mediation by the Organization of American States (OAS).

In recent remarks, Colombian Defense Minister Juan Manuel Santos justified the raid as an act of legitimate defense, sparking controversy in both Quito and Bogota. President Álvaro Uribe responded by reprimanding the minister. Santos’ strong statements led some to wonder if they serve as an indicator of his intention to run in next year’s presidential election.

Yet Santos’ remarks did little to curry favor in Ecuador. In an interview with RCN Radio, Ecuadorian Vice President Lenín Moreno said that “it is very difficult” to normalize bilateral relations given Santos’ declarations. The comments drew the ire of Caracas as well; the Venezuelan government issued a statement about the remarks, saying that they threaten the stability and sovereignty of countries in the region.

Meanwhile, Ecuador’s Foreign Minister Fander Falconí criticized Uribe’s government for failing to handle the question of displaced people seeking refuge in and near Ecuador. The Office of the UN High Commissioner for Refugees (UNHCR) oversees a refugee registration project launched by Quito in December. The UNHCR estimates that some 20,000 refugees live in Ecuador but that as many as 130,00 could need international protection. Additionally, the government of President Rafael Correa has stepped up operations along Ecuador’s northern border by dismantling more than 200 guerrilla camps in the last two years, Colombia’s El Pais reports.

But Colombia has its own grievances with Ecuador’s government. Data obtained from a FARC laptop during the raid raised concerns about links between the guerilla group and Ecuadorian officials. Former official José Ignacio Chauvin, a close aide to former Minister of State Gustavo Larrea, admitted that he met with FARC’s late second-in-command Raúl Reyes seven times, reports El Universo. An editorial in Ecuador’s Hoy proposes the creation of an independent commission to steer Ecuadorian politics away from the dark waters of drug-trafficking influence.

World Politics Review explains that after a year, “[B]oth sides’ failure to make progress on reconciliation may be politically motivated.” The article explains that, while Correa gains support by defending Ecuador’s sovereignty at all costs, Uribe has other matters to deal with; restoring diplomatic ties with his neighbor may not stand as a top priority.

Still, despite the controversy, economic ties appear to stand strong between the neighbors. Colombian exports to Ecuador increased 16.1 percent and Ecuadorian exports to Colombia rose 10.5 percent last year, totaling more than $2 billion in 2008, according to Colombia’s Commerce Ministry.

Tensions between the two Andean nations involved OAS mediation over the past year. In an interview with AS/COA Online, OAS Secretary General José Miguel Insulza likened his OAS role in Latin America as that of a bombero (firefighter) putting out fires across the region. As recently as February 26, Insulza visited Correa and urged reconcilation, to no avail.

A new article by the Economist looks back at raid and calls it a success in terms of inflicting permanent damage to the FARC, saying Colombia paid a small price. Colombia’s Defense Ministry reports on the massive defections facing the guerilla group. Read more about he FARC’s growing weakness and signs—such as hostage releases—that it may be changing course.

Read the article as published on the AS/COA website.

How Correa Weathers Quito’s Economic Strom AS/COA Online 02/27/09

President Rafael Correa. (AP Photo)

Ecuador, facing declining remittances and low oil prices, finds itself confronted with financially tough 2009. But the upcoming presidential elections present an opportunity to redirect voters’ attention to other quarrels picked by the administration of President Rafael Correa. His style of governing has mustered ample support for his political party Movimiento Pais while sparking multiple controversies abroad. Along with his Vice President Lenin Moreno, Correa will get another chance to put his formula for government up for a reelection test, thanks to a revamped constitution approved last August. The presidential campaign begins March 10 with the election following on April 26.

Quito’s short-term financial forecast appears bleak. The Economist Intelligence Unit predicts Ecuador faces negative growth of 3.2 percent and, from 2010 up to 2013, experience half the growth rate of the past four years. In addition, the bond default announced by the Finance Minister María Elsa Viteri on February 16 unnerved investors, on guard since December over whether Correa’s government would make payments on what the president called “illegitimate” external debt.

Like most of the countries in the Western Hemisphere, Correa may have to drastically cut spending in 2009 as a result of the global crisis decreasing his popularity levels. Statistics prepared by Ecuador’s Central Bank confirm the downward slope in oil and non-oil related exports, gross domestic product, and remittances. El Comercio reports that international reserves have dropped significantly in the last six months thanks to lower oil demand and prices. Lower inflation rates starting in October stand as one bright spot.

Yet, despite these financial trials, Ecuadorians continue to favor Correa’s administration. A poll by Cedatus/Gallup show that Correa’s approval ratings remain at a solid 70 percent in January. Some of the initiatives undertaken by his government include his calls against renewing the lease for the U.S. air force base in the port of Manta, breaking diplomatic relations with Colombia after Bogota’s unauthorized military raid against guerrillas last year, and threatening Repsol to freeze its assets for non-tax compliance. The Latin American Thought blog offers an explanation of how the initiative to turn the town of Manta into a megaport developed by Hong Kong-based Hutchinson Port Holdings may turn sour as a result of sinking manufacturing numbers in China. On bilateral relations with Colombia, World Politics Review says that after a year “[B]oth sides’ failure to make progress on reconciliation may be politically motivated.” The article explains that while Correa gains support by defending Ecuador’s sovereignty at all costs, Uribe has other matters deal with so that restoring diplomatic ties with its neighbor may not stand as a top priority. To defuse the Repsol affair, a prompt visit by Spain’s Foreign Minister Miguel Angel Moratinos on February 25 forged a compromise to repay 20 percent of the $444 millions demanded by the government by a March 12 deadline, Hoy newspaper reports.

In spite of a new occupant in the Oval Office, Quito’s relations with Washington remained strained after Ecuador’s decision to expel the U.S. Embassy’s First Secretary Mark Sullivan, accusing him of meddling with internal affairs. The move was preceded by the expulsion of U.S. official Armando Astorga on February 7 after Washington ended support for a police support program. In a daily press briefing on February 19, U.S. Department of State Acting Deputy Spokesman Gordon Duguid expressed concern and suggested that the United States is weighing whether or not to engage in diplomatic retaliation.

The Instituto Latinoamericano de Investigaciones Sociales in Quito unveiled an analysis of Ecuador’s state of the economy in 2008.

Read this article as originally published at the AS/COA website.

The Americas 2008: A Year in Retrospective AS/COA Online 12/23/08

View a slideshow of the most compelling events in the hemisphere. Also, read an article by AS/COA Online Managing Editor Carin Zissis on the most riveting events affecting the Americas in 2008.

Click the image to watch the photo gallery.

FARC’s Dwindling Days? AS/COA Online 05/27/08

Late FARC leader Manuel Marulanda. (AP Images).

The Revolutionary Armed Forces of Colombia (FARC) commemorated its forty-fourth anniversary this weekend by confirming what Colombia’s government had already announced: that their leader and founder was dead. Pedro Marin—better known as Manuel Marulanda or “Tirofijo” (Sureshot)—died two months ago of a heart attack. On May 24, Colombian military intelligence intercepted a radio communication between guerrilla commanders, prompting a press conference announcing the rebel leader’s death followed by the FARC’s public acknowledgement.

The news of Marulanda’s death served as a sharp blow to an already weakened FARC during a year in which members of its senior leadership deserted or were arrested or killed. In the first quarter of 2008, the Colombian ministry of defense reports that 1000 FARC guerrillas deserted, 926 were captured, and 596 killed. To further weaken the group, President Álvaro Uribe proposed a new program with $100 million in funds to reward guerrillas that lay down their arms and turn over hostages. Other offers include parole and possible exile to France. Uribe indicated that the government had already received calls from guerrillas in response, including from the captors of ailing politician Ingrid Betancourt.

With desertions on the rise and the rebel group’s founder dead, questions mount about Marulanda’s successor and the group’s possible fragmentation caused by a power struggle between Guillermo Leon Saenz aka Alfonso Cano—selected to serve as FARC’s new top political leader—and the group’s top military commander Jorge Briceño (known as Mono Jojoy). Semana magazine examines challenges facing Cano, taking into account the March deaths of Marulanda, the FARC’s second in command Raul Reyes during a Colombian raid in Ecuador, and secretariat member Iván Ríos’ assassination by his own bodyguard.

Additionally, senior commander Nelly Avila Moreno (alias “Karina”) recently surrendered. “I don’t know what the state of the FARC is on a national level, but we are fractured,” she told reporters, saying she had been cut off from her unit for months and from the secretariat for two years, reports the Christian Science Monitor. BBC examines FARC’s desertions and internal divisions as signs that the group may be close to their breaking point.

In recent interviews for Caracol Radio, kidnapped victims’ families and analysts voiced optimism about prompt hostage releases because new leader Cano has shown a conciliatory approach over the years.

Marulanda’s death came to light a week after Interpol certified that the data found on Reyes’ laptops, recovered by the Colombian army at the March 1 raid in Ecuador’s soil, were not manipulated by the government. The forensic report backed up the authenticity of several emails from Reyes to Ecuadorian and Venezuelan officials. Read more of AS/COA’s coverage of the Andean standoff, which started with the March 1 military raid in Ecuador.

COA hosted Colombian Minister of Defense Juan Manuel Santos at the 38^th annual Washington Conference on the Americas, where he outlined competing ideologies in Latin America and their challenge for U.S. foreign policy in the region.

Read the article as originally published at the AS/COA website.

Download a PDF file here.