Moreno under attack

ECUADOR - Report 25 Apr 2019 by Magdalena Barreiro

The Social Christian Party came out as the absolute winner of the recent local government elections, while the official party, Alianza Pais (AP), suffered a shameful defeat. This defeat was on President Moreno´s head, according to party members, as they felt like “political orphans” due to the lack of involvement of the president in the campaign.

In addition, Moreno is undergoing an investigation for family links with dubious businesses in fiscal paradises. According to his followers, there is no evidence to condemn the president, but according to former President Correa, “Moreno should count his days.”There is a clear conspiracy movement headed by Correistas against the president, who has responded tough and fast. Former Foreign Affairs Minister Ricardo Patiño, who is a suspected of leading and instigating this movement, was accused of sedition and now is on the run (probably in Peru or Mexico).

These are not the only troubled waters that Moreno has been navigating lately. President of the Assembly Elizabeth Cabezas (from the official party AP) was involved in a scandal over a phone call to Minister of the Interior Maria Paula Romo regarding Moreno´s investigation. Even though the motion to remove Cabezas from the assembly presidency did not pass, it revealed that at least five out of the current 46 AP legislators might abandon the official party, thus AP will most probably lose the election for control of the Assembly in the coming mid-May elections because legislators of other groups have made it clear they will not vote for either Morenistas or Correistas.

In addition, the agreement with the IMF and its implied adjustments continue to be the focus of protests and criticism on one hand, and of skepticism about the probability of compliance on the other. The expected fiscal adjustment and its negative impact on economic growth raises fear, especially because recent labor market data revealed that in March 2019, Ecuador broke a historical record with over five million people either unemployed or under-employed.

On the bright side, Ecuador has marked a clear difference in its political and economic approach in the past few weeks. President Lenin Moreno´s visit to Washington DC to speak before the Permanent Council of the OAS, where he addressed issues of democracy and human rights, was successful and opportune as it coincided with the IMF and World Bank Spring Sessions. His presence in DC helped to highlight the parallel economic agenda of Ministers Martinez and Campagna, who met with investors and financial authorities from all over the world to reverse the negative impression left by former Minister of Finance Maria Elsa Viteri last year.

President Moreno’s visit was also opportune as it followed Ecuador´s decision to end the asylum granted to Julian Assange since 2012 in the Ecuadorian embassy in London. This affair has received close scrutiny and divided opinions all over the world. After being analyzed in the Assembly, the decision was harshly criticized only by the Correistas, but was received positively by a majority of legislators who not only approved it but also motioned to start impeachment proceedings against former Minister of Foreign Affairs and current President of the 73rd Session of the United Nations, Maria Fernanda Espinosa, for allegedly forging documents to grant Assange Ecuadorian nationality.

We believe the country will face a turning point by next November, when the proposed tax reform and the 2020 budget will have to be approved (or not) by legislators.

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