The people of Ecuador vote for a new president this Sunday with a choice between two radically different candidates.
Outgoing President Rafael Correa’s deputy, Lenin Moreno, is taking on the Conservative Guillermo Lasso, a banker. Moreno wants to continue the ruling party’s transformation of the country, maintaining tax and spend policies that, despite high levels of public debt, opinion polls say make him the favourite to win an outright first-round victory.
“I say to you all: the mission continues. The mission for people with disabilities, yes, but also for elderly people, women who have been abandoned, domestic workers, children, young people, or women who have been mistreated,” said Moreno on the campaign trail.
Guillermo Lasso however wants to slash five billion dollars from public spending, a near-20% cut, stimulate foreign investment, and lower taxes to stimulate consumption.
“We are going to eliminate and get rid of 14 taxes here in Ecuador, because the Ecuadorean people have had enough of so many taxes, so much abuse, and above all the most malignant tax of them all: the corruption among Correa’s people,” he countered.
President for the last decade Rafael Correa has scored some notable successes, but at a price. Not everything is rosy.
He can point to some impressive social and economic statistics, like slashing poverty by a more than a quarter, for example, from 36.74% to 25.35%, and doubling Ecuador’s GDP from 48 billion dollars a year to 94. Infrastructure investment has improved the transport and energy sectors.
He has targeted his measures to help the poorest first and foremost, and it is the richest who have suffered the biggest tax increases. Education has been greatly expanded. But the country has borrowed heavily to help pay for it all.
“La historia exitosa de la izquierda ecuatoriana”.— Rafael Correa (@MashiRafael) February 15, 2017
Artículo internacional sobre la Revolución Ciudadana.https://t.co/kO5uT8YoYh
Unemployment, at 5,2% is low but rising, and hides the nearly 20% of the workforce classed as “underemployed”. And in 2016 a near-decade of growth was ended when GDP took a sharp -1.7% hit. This adds up to annual public spending of more than 24 billion dollars now far exceeding revenue of around 16.5 billion.
Correa pleads the Ecuadorian economy, using the US dollar since 2000, has been caught in a perfect storm of external factors; above all a 2016 earthquake estimated to cost 3% of GDP, and a prolonged low price for its oil. Ecuador’s debt now stands at 40% GDP. Servicing that today costs as much as the health and education budgets combined.