Ecuador has suffered deep political instability for many years. This has been reflected in this year’s general election, where 16 candidates have entered the presidential race. After much anticipation, last Sunday, 7 February, 13.1 million Ecuadorians headed to the polls to elect a new president.
While the polls have moved around, the race has centred on three main candidates: Guillermo Lasso, a conservative banker and former economy minister who promises more market reforms and a strengthening of liberal democracy; Andrés Arauz, former President Correa’s protégé, who defends populist’s politics, and finally, Yaku Pérez, an Indigenous lawyer seeking to defend the environment and Indigenous rights, (jeopardising extractive industries, including Ecuador’s long-established oil sector and newer mining sector).
As the polls predicted, Arauz won the first round of the presidential election with approximately 32.20% of the vote, and although this is not enough for an outright victory, Arauz has secured his place in the run-off scheduled for 11 April.
More surprising is the strong performance of Yaku Pérez, who seems to be the most likely second round opponent for Arauz in the run-off to become the next president of Ecuador. Pérez and Lasso are still neck-and-neck while the National Electoral Council (CNE) is manually counting 13% of the electoral roll, more than 1 million votes, which had some inconsistencies. A political analyst added, “That 13%, could mean the difference between Lasso and Pérez.”
This is the first time that an indigenous leader has arrived this far in an Ecuadorian general election. A partner of a law firm in Ecuador explained, “The rejection of Guillermo Lasso, for a third time, shows a deep discontent with his candidacy, based on his connection with the financial markets and the traditional political views he represents.”
“The rejection of Guillermo Lasso, for a third time, shows a deep discontent with his candidacy, based on his connection with the financial markets and the traditional political views he represents.”
Partner, Law firm, Ecuador
A big question regarding the potential presidency of Arauz is his relationship with the International Monetary Fund (IMF): during his campaign he repeatedly stated that he will not comply with agreements made with the IMF.
A further doubt with both Arauz and Pérez is whether the dollar will remain as Ecuador’s main currency. A commercial lawyer is concerned, “The biggest risk would seem to be exiting dollarisation.”
“The biggest risk would seem to be exiting dollarisation.”
Commercial lawyer, Quito
A Pérez victory would be a cause of concern to extractive activities, however, and as our sources in Ecuador highlighted, “Pérez does believe in free markets, private property and incentives for private investment.”
Once the second candidate for the run-off is confirmed, both candidates will enter a fierce competition in the second round where alliances will have to be made with other parties. Arauz’s supporters alone will not surpass 35%-40% of the electoral roll and it remains to be seen which of the other candidates may align with him.
If Pérez moves to round two, he will have to find ways to gain the support of all the other main political actors that represent about 45% of the votes. The partner of a law firm in Quito outlined, “This would mean an alliance with Lasso’s party and with Izquierda Democratica, led by Xavier Hervas and Vilma Andrade, whose presidential candidate received around 16% of the votes in the first round.”
The main challenges for the next president are to deliver a vaccination campaign and in turn kickstart the country’s economy. The virus paralysed 70% of businesses last year and left 600,000 unemployed, bringing the country’s unemployment rate to almost 68%. The economy is expected to have contracted some 10 – 12% over the year.
In general, the primary concern is the ability of the next government to deliver economic growth and debt control while avoiding populist measures that would increase the risk of default and limit access to international financing.