Will Correa Wait Four Years To Return?
President Lenín Boltaire Moreno is facing, and will continue to face, many challenges. Not all of them come from the outside. It took former president Rafael Correa less than a month to publicly air his disagreements with some of Moreno’s decisions, especially with his naming of a new anti-corruption committee.
Correa, who has been strangely absent from the news, has nonetheless been very active on Twitter, constantly criticizing the new president – a stance that has caused concern and uneasiness within Alianza Pais, which has not very successfully tried to convince Ecuadorians that everything is harmony and happiness within the party, and between its two most important members.
The Odebrecht corruption scandals have reached top former members of Correa’s cabinet who served under the direct supervision of Vice President Jorge Glas. There have therefore continuous rumors of Glas’ participation in those illegal activities. But, together with some AP legislators, Glas claims he is innocent. The Attorney General has so far not brought any charges against him.
Yet Moreno implicitly demoted Glas when he changed his job description, limiting his official role to supervising the reconstruction of the coastal region devastated by the earthquake of April 2016. Therefore, some political analysts believe Glas – a Correa man – will be used by the government as a scapegoat, to make people believe the government has decided to protect no one, and will prosecute the guilty.
The first person to fall was Comptroller Carlos Polit, who served during the Correa administration, and was recently re-appointed for four more years. On June 2nd, the public prosecutor’s office arrested six people, and searched homes and offices, including Polit’s. Polit now faces impeachment -- but he is in Miami, with no prospect of returning to Ecuador.
Under this volatile political scenario, Moreno has tried to reassure the public that dollarization will be maintained, and that electronic money will not be used as a parallel currency – a top concern for Ecuadorians.
Minister of Finance Carlos de la Torre gave a press conference, where he backed up the speech by the president, praised Correa’s economic management, and announced a fiscal deficit of $4.5 billion for 2017. But the minister did not mention any fiscal adjustment, except for some $2 billion in cuts to capital expenditure.
In our opinion, the minister’s presentation was weak and unconvincing. In general, we believe that so far, the government has fallen short in explaining its plans for coping with the fragility of the fiscal sector, and on how it will gradually eliminate import controls, while maintaining the sustainability of the external sector -- both crucial for supporting dollarization.
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