www.heritage.org by Stephen Johnson WebMemo #205 February 10, 2003 |  |

On February 11, Ecuadoran President Lucio Gutierrez will visit with President George W. Bush in Washington. While the newly installed Ecuadoran leader will likely ask his counterpart to support continued multilateral loans and development aid to his nation, President Bush should use the opportunity to cement U.S.-Ecuadoran security ties, to encourage deeper democratic and market reforms to enhance Ecuadoran stability, and say no to excessive dependence on international assistance.

Fractious nation President Gutierrez leads a country with a history of power struggles between contentious interest groups and on-again/off-again democracy. Ecuador has had 17 constitutions since independence and a divided oligarchy controls most of the commodity-based economy. In the last seven years, Ecuador has had six presidents—two of whom, Abdala Bucarám and Jamil Mahuad, lasted a year or less before their ouster. In January 2000, it was army colonel Lucio Gutierrez who led indigenous protesters in marches that forced out Mahuad, considered ineffective in fighting corruption and who proposed dollarizing an economy plagued by runaway inflation. His vice-president and successor, Gustavo Noboa, dollarized it anyway.

Now in Carondelet Palace himself, Gutierrez will face an assembly representing the highland elites, coastal landowners, and Ecuador’s indigenous population. Just 17 percent of the 100-seat unicameral body is loyal to his Patriotic Society Party coalition.  Although democratic and market-based reforms are ongoing, elites have resisted opening the economy to competitive enterprise. Instead, social spending, subsidies, and price controls were meant to help Ecuador’s 50 percent poor compensate for restricted access. Over-reliance on commodity exports such as petroleum and bananas has limited growth to pay back loans that support such programs.

Troubled neighborhood Potential civil war in Venezuela, drug trafficking, and terrorist groups operating in Colombia and in the confluence of the Argentine, Brazilian, and Paraguayan borders threaten trade and impact neighbors with refugees. Narcoterrorists such as the Revolutionary Armed Forces of Colombia (FARC) still operate in 70 percent of Colombia’s territory and have infested Ecuador’s northern Sucumbíos department. Peru also faces a resurgence of drug trafficking and terrorism. Two weeks after Gutierrez was inaugurated, a group called the Peoples Revolutionary Militia took responsibility for a bomb that exploded at an American Airlines office in Quito.

Good intentions A political novice, Gutierrez was elected with 54 percent of the vote in a runoff election on November 24, 2002. Although he once led a coup and counts radical Indians as his base of support, Gutierrez said he wants to be president of all Ecuadorans, and promises to fight poverty and corruption while preserving dollarization and allowing continued use of Ecuador’s Manta air base for the U.S.-backed Andean counternarcotics effort.  

On the domestic front, he supports decentralizing the Ecuadoran state, devolving authority over local affairs to local jurisdictions. He would like legislative bodies to more effectively represent their constituents. And he has proposed creating a fourth branch of government to audit public spending and the banking sector. Regarding foreign affairs he shuns taking part in any “triangle” or “axis” involving Cuba’s Fidel Castro or Venezuela’s leftist president Hugo Chávez. Yet, he said he would help Colombia solve its narcoterrorism threat by opening Ecuador’s borders and pursuing peace with its Marxist guerrillas. “Guerrillas are human beings too,” he said in Washington last November.

Some of these ideas are clearly impractical. In October, Ecuadoran voters approved a measure to eliminate 23 at-large congressional seats, reducing the national assembly to 100 members. Gutierrez would like to chop that number to 60. Without changes to make assembly members stand for actual districts, another reduction would decrease representation, not enhance it.  A fourth branch of government to audit accounts unnecessarily duplicates functions normally carried out by the legislative and judicial branches. And easing border controls with Colombia would invite more border incursions by violent guerrillas in Ecuador’s poorly patrolled northern provinces. Ecuador’s 35,000 police and small, 600-member counternarcotics unit would be quickly overwhelmed.

Tough love The United States needs stable allies in troubled South America. Despite inexperience and concerns over his past, Lucio Gutierrez appears to understand that Ecuador’s future depends on accountable governance and open markets. That should be enough of a start for President Bush to forge friendly working realtions with him. But for collaboration to be fruitful, President Bush should:

Encourage Ecuador’s support for U.S.-aided regional counternarcotics and counterterrorism efforts by its securing borders and helping Colombia pressure its narcoterrorists into laying down arms. Appeasing such groups will only prolong the violence and invalidate the $22 million President Bush has requested in FY 2003 security assistance for Ecuador in his Andean Regional Initiative.  *

Advocate strengthening representative government. Washington should tailor existing U.S. assistance to leverage changes allowing legislators to stand for districts within their departments and municipalities. Such aid should also support tax reforms allowing localities to collect revenue to fund programs administered under their own authority. *

Urge less dependency on multilateral credit such as recently announced $200 million standby loan being negotiated with the International Monetary Fund, in favor of measures that promote diversified exports, small and medium-sized business creation, ongoing judicial reforms, and stronger protection of private property.  *

Enlist Ecuador’s backing for the Free Trade Area of the Americas (FTAA). Through the FTAA, Ecuador would gain greater access to developed markets and foreign investment, helping to further stabilize its economy.  

Conclusion Ecuador may only have 12 million citizens and do $3.4 billion worth of trade with the United States, but it is an important supplier of petroleum (100,000 barrels per day) and has worked hard to keep itself relatively free of the kind of coca production, trafficking, and money laundering that has plagued its northern neighbor. Despite a past that suggests military rigidity, President Gutierrez appears open to ideas, has selected several experienced cabinet members, and generally favors a democratic, pro-market agenda. President Bush should encourage his counterpart to help defeat the twin scourges of drug trafficking and terrorism in the Andean region, and offer support for strengthening Ecuador’s democracy and market economy—a work still in progress.

Stephen Johnson is Senior Policy Analyst for Latin America in the Kathryn and Shelby Cullom Davis Institute for International Studies at The Heritage Foundation. The author wishes to thank intern Raymundo Morales for his contribution to this Web Memo.

www.vidaenelvalle.com By MONTE HAYES The Associated Press (Published Wednesday, January, 22, 2003 5:30AM)

QUITO, Ecuador -- Three years after he led a coup to oust an unpopular president, a former army colonel took the oath of office last Wednesday as Ecuador's new leader, vowing to fight the "corrupt oligarchy" he says controls the nation.

As Lucio Gutiérrez, 45, strapped on the red, yellow and blue presidential sash, his followers in Congress chanted "Lucio, Presidente!"

"Lucio Gutiérrez will not govern for the left nor for the right. He will govern for Ecuadoreans unhindered by the ideologies of the past," he said to loud applause. "We will change Ecuador or we will die trying."

Gutierrez won an election runoff in November, promising to fight corruption -- a pledge that could bring him into confrontation with Ecuador's political elite. He said in an interview published last Wednesday that he would call giant street protests if the political establishment tries to block his reforms.

Ecuador has been ranked in international studies as one of the most corrupt countries in the world.

Seven Latin American presidents were among the guests at the inauguration, including the region's top leftist leaders, Cuba's Fidel Castro, Brazil's Luiz Inacio Lula da Silva and Venezuela's Hugo Chávez.

Gutiérrez has frequently expressed his admiration for Chávez, raising fears among some Ecuadoreans that he may seek to emulate Chavez, whose leftist rhetoric has divided Venezuela and produced growing political instability.

Gutiérrez, often referred to in the streets simply as "The Colonel," thrust himself into the national spotlight in January 2000, when he led a group of disgruntled junior army officers and 5,000 Indian protesters in an uprising that drove the widely repudiated Jamil Mahuad from power in the midst of the country's worst economic crisis in decades.

Gutiérrez was imprisoned for six months after the coup and expelled from the army.

In his address last Wednesday, he said he would take strong steps against "the corrupt oligarchy that has robbed our money, our dreams and the right of Ecuadoreans to have dignified lives."

"If sharing and showing solidarity, if fighting corruption, social injustice and impunity, means belonging to the left, then I am a leftist," he said, drawing cheers.

But he added: "If generating wealth and promoting production means belonging to the right, then I am a rightist." That remark drew fewer cheers.

Gutiérrez has labeled Ecuador's traditional parties and their leaders as corrupt and said all of the country's former presidents should be in prison for their responsibility in "the national disaster" -- although he later apologized for his remarks.

In a fiery address night before the Supreme Electoral Tribunal, Gutiérrez said he would found a new Ecuador based on "ethical values, moral values ... with social justice" for the poor, including Ecuador's large Indian population.

In his campaign Gutiérrez pledged to reduce the number of lawmakers, eliminate the influence of political parties over the court system and extradite corrupt bankers who made off with people's money when the banking system collapsed in 1999. He plans to call popular referendums to achieve his reforms.

"At some moment the country must change or if it doesn't I will convoke marches," he said. "We will not permit the mafia to destroy what we want to build."

www.guardian.co.uk Duncan Campbell Thursday January 16, 2003 The Guardian

The former colonel who came to power in Ecuador with a pledge to smash corruption has warned that he will encourage his supporters to take to the streets if his reforms are thwarted.

Lucio Gutierrez, a leftwinger who was elected president last November in a runoff with the country's richest businessman, took office yesterday warning that he would punish corrupt politicians and officials.

In an address to the Supreme Electoral Tribunal in Quito earlier this week, Mr Gutierrez proposed a new approach to government, saying he wanted a country based on "ethical values, moral values... with social justice." He also said that he would govern the country of 13 million energetically and "with love".

Latin American leaders and foreign ministers have gathered in Quito for the inauguration, and also to discuss how to solve the growing crisis in Venezuela.

A group called Friends of Venezuela - first proposed earlier this month at the inauguration of the Brazilian president Lula da Silva - is being formed, with the backing of the US, to try to end the deadlock there.

Mr Gutierrez has been likened to the Venezuelan president Hugo Chavez: both men took part in coup attempts for which they were jailed, and both later ran for electoral office and were returned with large majorities on pledges to fight poverty and corruption.

Since the Venezuela crisis, however, Mr Gutierrez, 45, has distanced himself from Mr Chavez, and his pronouncements are more muted.

"At some moment the country must change, or if it doesn't I will convoke marches," he said in an interview this week in the Ecuadorean newspaper Hoy.

"We will not permit the mafia to destroy what we want to build," Mr Gutierrez said. During his campaign, he promised that he would redress inequalities in what is one of the continent's most corrupt countries.

With no previous political experience and a new political party, Mr Gutierrez has already been accused of naivety. With only 17 of the 100 seats in Congress under his control, he has had to back down from a claim that he would take his oath of office in front of "the people" rather than Congress. He has also apologised for saying that all the country's former presidents should be in jail.

www.voanews.com Ralph Kurtenbach Quito 16 Jan 2003, 00:14 UTC AP

Lucio Gutierrez Ecuador swore in a new president on Wednesday, an army colonel who three years ago helped stage a coup that unseated then unpopular president Jamil Mahuad.

In an hour-long speech outlining his plan to rebuild Ecuador, Colonel Lucio Gutierrez pledged to clean out corruption, build the economy and fight poverty. The president said his government plans to move quickly to increase a government subsidy for the poorest, with more improvements for the poor later in his term.

In addition he proposed a national nutrition security fund, supplied in part by the country's food processers. "In my government," the president said, "we will have all food processers channel to the food security fund their non-saleable wares to apply toward a national nutrition plan." He then quoted from a common saying, "When the poor cannot eat, the rich must not sleep."

Seven Latin American presidents were among the guests at the inauguration, including leftist leaders Fidel Castro of Cuba and Venezuela's Hugo Chavez.

President Gutierrez is a political outsider, elected in November over a banana exporter whose campaign was better financed. The new leader's name first became known to Ecuadorians during a January 2000 coup when he and other renegade military officers helped protesting Indians to throw out Mr. Mahuad in a short-lived coup.

Mr. Gutierrerz was jailed, then resigned to enter politics. With rising crime in Ecuador, the President said he wants excellent security that protects children, senior citizens and the disabled.

His speech was interrrupted numerous times by applause.

The new president promised to recover the country's pride and national unity. But his efforts may run into trouble in the country's Congress, where his coalition holds only 17 of 100 seats.

news.bbc.co.uk Wednesday, 15 January, 2003, 18:37 GMT

The ex-soldier has a delicate balancing act ahead

Ecuador has inaugurated a former coup-leader, Lucio Gutierrez, as its new president.

He is the latest leader to come to power in Latin America espousing a populist political agenda, and was joined at the ceremony by veteran left-wing leaders such as Cuba's Fidel Castro, Brazil's Lula and Venezuela's Hugo Chavez.

The left in power

Ecuador: Lucio Gutierrez, son of a jungle riverboat salesman

Cuba: Fidel Castro, veteran communist revolutionary

Brazil: Luiz Inacio Lula da Silva, former shoeshine boy and metalworker

Venezuela: Hugo Chavez, former army officer and admirer of Castro

The 45-year-old retired army colonel won the state's presidential election in November on pledges to fight corruption and poverty.

Correspondents predict that he will have a short-lived political honeymoon in office given his lack of experience in government in oil-rich but poverty-stricken Ecuador.

Thousands of police and troops guarded Congress in the capital, Quito, as the inauguration took place.

Guests also included Washington's special envoy for Western hemisphere initiatives, Otto Reich - a veteran anti-communist.

The new president was expected to hold talks after the swearing-in ceremony with the other Latin American leaders present - including the presidents of Colombia, Chile, Peru and Bolivia - with the focus on Venezuela's political and economic crisis.

'Change ahead'

Speaking to the press before his inauguration, Mr Gutierrez described himself as a "product of the people's unsatisfied aspirations".

"People want change. They said: 'Enough of the same old leaders'," he told El Comercio newspaper.

In a speech to parliament, he promised "ethical values, moral values... and social justice".

Before last year's election, he rose to fame for leading a successful coup to topple then-President Jamil Mahuad in 2000 with the backing of the country's Indians.

Colonel Gutierrez had led the revolt in protest at a severe economic crisis and a freeze on bank withdrawals.

The new president has promised investors to pay the national debt and seek an International Monetary Fund loan, but he will have difficulty persuading his leftist supporters to adopt market reforms.

"He seems to have good ideas," said one Quito resident, Segundo Suasnavas. "That is, if they let him govern."