Lenín Moreno's legacy to Guillermo Lasso in Ecuador

The pandemic has worsened the country's already precarious economic and social situation, which the new president will have to deal with
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As some polls carried out in the last days of the campaign suggested, Guillermo Lasso finally won the presidential elections in Ecuador against the candidate of the left-wing Correista party, Andrés Arauz.

The 65-year-old banker, who has won the presidency for the third time, will be sworn into office on the 24th. This will mark the end of 15 years of Alianza País governments, the party that brought former president Rafael Correa and later Lenín Moreno, former allies and now bitter enemies, to the Carondelet Palace.

For the moment, Lasso has already announced that Iván Correa and Juan Carlos Holguín will be in charge of managing the transition of power between the outgoing administration and his team, although he has avoided naming names about his future cabinet, which he says will be known little by little.

"I want to extend my hand and say that my arms are open to all civil society, to political leaders without exception, the moment Ecuador is going through requires a Government of Unity", he said last Tuesday in what was the first press conference given by the president-elect after the elections. 

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AP/FERNANDO VERGARA - Ecuadorian President Lenin Moreno speaks during negotiations with anti-government protesters in Quito, Ecuador

This call for unity shows that Lasso is aware of the parliamentary weakness of his party, the CREO Movement, and its ally the Social Christian Party (PSC), which has only 31 seats out of 137, while the Union for Hope (UNES) of Andrés Arauz will have the strongest parliamentary group with 49 assembly members. The new president will have to win the support of the other two political forces in the National Assembly, Izquierda Democrática (18 seats) and the indigenist Pachakutik (27 seats), and even make a pact with Correísmo, if he wants to push through his legislative agenda at such a critical time as Ecuador is going through. 

A country devastated by COVID-19

The terrible images of corpses piled up in the streets of Guayaquil show the health collapse that Ecuador experienced at the worst moments of the pandemic in April 2020. A year later, hundreds of people are waiting in queues of up to seven hours to be vaccinated in schools and health centres in Quito.

In the meantime, four health ministers have succeeded each other in the Moreno government, the last two having resigned over a privileged immunisation scandal involving family and friends of senior government officials. This is the case of Juan Carlos Zevallos, who left office barely 18 days after taking office when the country's media revealed that he had given priority in vaccinations to his mother over other people in the geriatric centre where he lives. Irregularities have also extended to the purchase of medical supplies such as masks, PCR tests and body bags.

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REUTERS/MARIA FERNANDA LANDIN - Ecuadorian banker Guillermo Lasso and his wife Maria de Lourdes Alcivar react after Lasso wins the presidential run-off, in Guayaquil, Ecuador April 11, 2021

In the opinion of the Ecuadorian sociologist David Suárez, consulted by the Argentinian newspaper Página 12, one of the causes that most contributed to the chaos in the management of the health crisis is that the agreement signed by the Moreno government with the IMF implied "a cut in the national budget" that prevented the existence of sufficient emergency funds to deal with COVID-19. The expert also pointed to the lack of "an institutional strategy and the credibility of the government" as a determining factor.

In the last week, Ecuador has added almost 3,000 new infections per day, bringing the total number of cases of COVID-19 to 350,539 and the number of deaths to 17,400. New strains of the coronavirus, such as the British one, are already circulating in the country, which has led the government to declare a state of emergency for a month in eight provinces covering 70% of the Ecuadorian population.

GDP in free fall and poverty on the rise

Another of the great challenges facing Guillermo Lasso is to turn around an economy in clear decline. In 2020, the health crisis severely punished the Latin American country's economy with a 7.8% drop in GDP and a debt of 63 billion dollars, 62.9% of GDP, according to data from the National Institute of Statistics and Censuses (INEC).

Poverty has risen from 25 per cent before the crisis to 32.4 per cent and extreme poverty stands at 14.9 per cent. In rural areas, the figures are even more alarming, with poverty levels standing at 48%.

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Sale of sanitary products in Guayaquil (Ecuador), one of the cities most affected by COVID-19 in Latin America

To understand the magnitude of the economic crisis in Ecuador, one has to go back to 1999, when GDP plunged by 6.8 per cent, less than in 2020, and which unleashed a social crisis that ended with the emigration of thousands of Ecuadorians. At the time, Lasso was part of former president Jamil Mahuad's cabinet as economy minister. 

Experts such as Hugo Jacomé, a research professor at the Latin American Faculty of Social Sciences (FLACSO), told EFE that the current situation is due not only to the current health crisis, but also to structural factors such as the volatility of commodity prices, on which the Ecuadorian economy is heavily dependent.

To this must be added the fulfilment of the agreement signed between the outgoing government and the IMF in 2019 for 10.2 billion dollars and in 2020 for 6.5 billion dollars, to which an extra 2 billion dollars was added at the end of the year.

Arauz's candidacy saw the conditions as "draconian" and feared the social impact they could have, especially those related to public budget cuts. Lasso, for his part, announced in his campaign that he would not ignore the agreement, but pledged not to raise VAT despite the fact that it is one of the commitments agreed with the international organisation.

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REUTERS/SANTIAGO ARCOS - Polling station during the second round of the presidential election, in Pujili, Ecuador April 11, 2021
Uniting a fractured society

Accusations of fraud by indigenous candidate Yaku Pérez after the first round of the presidential elections, when he came within 0.35 percentage points of Lasso, clouded the electoral process. Although in the end the international organisations that participated as observers assured that there was no such fraud, Pérez called for a null vote in the second round of the elections, insisting on this theory. 

On the other side, the aforementioned call for unity made by Lasso and the telephone call made by Andrés Arauz to congratulate his rival on his victory a few hours after the final result was known, as well as the rapid counting of the votes, have contributed to appease a country that has experienced turbulent moments during the last four years. Rafael Correa, Arauz's mentor, also congratulated the new president on his Twitter account.

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Arauz in his post-election speech asked Lasso not to be persecuted, in reference to the persecution promoted by the Moreno government against candidates and officials close to Correa after he broke ties with his predecessor in the presidency. Lasso responded by assuring that "that is over in Ecuador".

The cabinet he builds will be crucial to certify whether the unity sought by the president-elect materialises. Lasso's aforementioned parliamentary weakness may open the door to the integration of people from outside his political party into the cabinet.

Lenín Moreno will leave the presidency with only 8 per cent approval, and Lasso's task will be not only to lead the South American country out of the health and economic crisis but also to restore institutional credibility.