COASTAL POLITICS DRIFTING IN TIDE OF UNCERTAINTY

UNCLAS SECTION 01 OF 02 GUAYAQUIL 001151

SIPDIS

SENSITIVE

E.O. 12958: N/A
TAGS: PGOV PINR EC
SUBJECT: COASTAL POLITICS DRIFTING IN TIDE OF UNCERTAINTY



1. (SBU) SUMMARY: Politicians - past, present and aspiring
- in Guayaquil are searching to make sense of the country's
current political situation. In a series of meetings with
representatives from the major coastal parties, PolOffs took
stock of the view from down south. It may be that this city
is well-represented in President Palacio's administration;
but across the political spectrum the prevailing sentiment is
one of frustration with the government's inability to
effectively implement much needed reforms. While some look
with cautious optimism to the 2006 presidential elections as
a way out of the current loss of faith in the political
system, most begrudgingly acknowledge that it is too soon to
say with confidence that change is on the horizon. The
result is a guarded political climate filled with short-term
speculation and constant jockeying for position. End
summary.

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SHIFTING PARTY ALLEGIANCES
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2. (SBU) All with whom we spoke agreed that Palacio lost
most of his valuable political capital when he failed to take
assertive action within his first few weeks in office. The
resulting tenuous hold on power, compounded by a lack of any
clear majority in Congress, left the political elite casting
about for ways to garner support, even in unlikely places.
The parties have discarded any semblance of a political
platform or ideology in favor of securing interim benefits,
according to a close associate of Guayaquil Mayor Jaime
Nebot (PSC),Jose Joaquin Franco.


3. (SBU) According to Fuerza Ciudadana founder and former
provincial candidate Humberto Mata, the most unholy of
current alliances is between PSC guru Leon Febres Cordero
(LFC) and the ID's Rodrigo Borja. Arch-enemies just 20 years
ago, Mata believes that these two political patriarchs are
considering joining forces in the 2006 national elections.
Their aim is to bring about the presidential win neither
party has been able to pull off since either man held the
presidential sash. Mata speculated that even if the leaders
were able to join forces, any agreement would be strongly
resisted by the rank and file. Any such electoral alliance
would by necessity involve second-tier party leaders, rather
than the strongest candidates, Guayaquil Mayor Nebot (PSC)
and Quito Mayor Paco Moncayo (ID).


4. (SBU) Former Foreign Minister under president Noboa and
one-time PSC affiliate Heinz Moeller also acknowledged the
possibility of an ID-PSC alliance, but said its likelihood
was diminishing since the ID openly supported President
Palacio's reform agenda. (Note: The PSC, in contrast,
distanced itself publicly from the Palacio government.)


5. (SBU) There are disconcerting signs that the PSC, the
coastal region's traditional anchor, is also adrift. Beyond
the notorious breach between LFC and Nebot, there continue to
be signs that LFC's authoritarian style and heavy hand are
becoming more of a liability. Long-time supporters and party
members Franco and Moeller (who had always told us he had
left the PSC, now describes himself as the third pillar of
the party, after LFC and Nebot) spoke at length about
internal disagreements over LFC's recent banking reform law.
Franco claimed to have personally spoken with PSC congress
members who stated they would never vote for this law.
Nonetheless, he went on to say, none of them "has the spine"
to stand up to LFC, and so rather than vote against the law,
they will refuse to vote, leaving it to their "suplentes"
(alternates) to cast the yea ballot.

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REFORM: ENDS JUSTIFY THE MEANS
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6. (SBU) As the country's 'consulta popular' snakes its way
through the administrative process, the promise of reform is
on the lips of all coastal political wranglers. However, in
addition to criticizing Palacio for not calling early
elections and for making ambiguous statements about the need
to 'refound' the country, those we spoke to also expressed
their dissatisfaction with what they perceive as the
president's indecision on the reform front. Unsurprisingly,
they were not in agreement as to what type of reform was
required or how they should be implemented.


7. (SBU) Echoing sentiments we have heard often before,
several politicians we spoke with commented that if an
authoritarian approach is what is needed to get the country
back on track, then so be it. These views are often heard
from Guayaquilenos frustrated by the inability of any elected
government to stay in office long enough to reform the
country. To enhance political stability, Moeller said he
supported introducing legislation to allow each president to
dissolve Congress for six months and rule by executive decree
once during their tenure. Mata lamented that Palacio didn't
convoke early elections after taking office. In contrast,
PRIAN congressional bench leader Sylka Sanchez told PolChief
that Alvaro Noboa wants the size of Congress to be reduced
overall, but will not favor measures to bolster the majority.
All agree that the Ecuadorian people are fed up with the
antics of traditional political parties.

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PRESIDENTIAL HOPES
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8. (SBU) Coastal political leaders are also calculating the
pros and cons of strategic alliances to generate momentum for
next year's presidential elections, and to prevent the
possibility of outsiders being able to make it to the second
round of elections, as did ex-president Gutierrez in 2002.


9. (SBU) Though Guayaquileno Leon Roldos currently leads
some presidential polls, he has yet to emerge as a clear
front-runner. Roldos' ally Mata noted that Roldos' lack of a
political party structure may impede his ability to navigate
Ecuador's electoral system, and criticized Roldos' lack of
interest in building a party with long-term prospects. Mata
was also critical of Roldos' overconfidence in his status at
the head of the polls, which has prompted him to adopt a
relatively conservative public strategy to date. Alvaro
Noboa, in contrast, can rely heavily on his millions and on
the PRIAN political structure he has painstakingly built over
the past decade. For the moment old-school political parties
like the PSC and PRE are groping for electable candidates,
according to Mata. They are feeling the effects of years of
domination by party patriarchs like LFC and former president
Bucaram, whose popular appeal has been waning and whose
dictatorial policies within the party have hindered the
emergence of new party leaders.

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OUTSIDERS AND STRANGE BREWS
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10. (SBU) The potential for another outsider candidate with
national appeal was also on everyone's mind. While skeptical
of a repeat of Lucio Gutierrez' surprise appeal in 2002, few
were quick to dismiss the potential appeal of former Economy
Minister Rafael Correa. The exception was Nicolas Febres
Cordero, LFC's brother, who told PolChief that if Correa were
to make the second round of presidential voting, the PSC
"would crush that upstart, even if it means supporting
Noboa."


11. (SBU) PRIAN party organizer Dino Herrera - who first met
Correa when they were Boy Scouts at Guayaquil's prestigious
Cristobal Colon High School - told PolOff that Correa's
biggest strength is that he fills the "none of the above"
option. Public disillusionment with traditional political
parties and institutions means that a charismatic alternative
like Correa may be very appealing to voters. At present
Correa does not have the ratings he did as minister because
he is no longer in the media spotlight every day. Herrera
believes that it would not take long to reverse that trend
when people begin to review the field of candidates and look
to a new face, a new savior for the country. Correa, a
former finance minister who "dared stand up to the gringos"
may just fit the bill.

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COMMENT
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12. (SBU) Speculation about Palacio's likely future, the
possibility of reform, and the slate of presidential
candidates fuels the political chatter in Guayaquil these
days. No coastal-based party seeks to throw Palacio out of
office, but neither are they rushing to prop him up.

HERBERT