ECUADOR ELECTION: WHAT'S AT STAKE

C O N F I D E N T I A L QUITO 002150

SIPDIS

SIPDIS

E.O. 12958: DECL: 05/24/2016
TAGS: PGOV KDEM PREL EC
SUBJECT: ECUADOR ELECTION: WHAT'S AT STAKE

Classified By: PolChief Erik Hall for reasons 1.4 (b&d)


1. (C) Summary: With the candidates finally defined and the
formal campaign period to open on August 29, more Ecuadorians
are undecided than have a presidential favorite for
first-round elections on October 15. In the past, public
disenchantment with the political party elite has favored
outsiders like ex-president Gutierrez, who came from nowhere
in the early polls to win in 2002. This time around, the
most appealing outsider candidate is Rafael Correa, who is
currently contending with Cynthia Viteri of the PSC and
Alvaro Noboa of the PRIAN for the second-place spot which
would set up an unpredictable November 26 run-off with
front-runner Leon Roldos (ID-RED). While none of the
candidates will return the bilateral relationship to the
halcyon days when then-president-elect Lucio Gutierrez
declared himself our "strongest ally in Latin America," none
of the top contenders would affect USG interests as
thoroughly as Rafael Correa. Thus far, support for the
young, charismatic Correa has not taken off among early
decided voters, and his recent visits with Chavez and now
Kirchner appear to be a ploy for free publicity. He remains
the most important candidate to watch as Ecuador's poorest
decide their votes. End Summary.

USG Democracy Interests at Stake
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2. (C) Political instability here severely limits the GOE,
weakening governments by making them vulnerable to
destabilization. The next elected president will be
Ecuador's eighth in the past decade, and will be faced with
similar challenges which have toppled the past three elected
presidents well before the end of their terms. To break the
cycle of instability, Ecuador badly needs a president to
serve out a four year term.


3. (C) The 43-year-old Correa touts himself as a "modern
socialist" but as the outsider promising to confront some
basic institutions (notably Congress, but also the military),
is the candidate most likely to get run out of office. Of
the top candidates, only Correa is running without a
corresponding congressional slate and is proposing to put the
new Congress immediately aside to convoke a constituent
assembly (which requires congressional approval he is
unlikely to get). A Correa victory would immediately
antagonize relations with traditional political parties, the
Congress, and the judicial branch (where party interests hold
sway in the Constitutional Court),generating public
uncertainty and renewed political instability. That said,
without stabilizing reforms, most of the other contenders are
also vulnerable.

Other USG Interests: Security Cooperation, Commerce
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4. (C) Correa's positions on other USG interests are of no
less concern to us. His views against renewal of the Manta
FOL agreement (like the former Foreign Minister, he would
"cut off his hand before signing a renewal"),which expires
in 2009, is shared by most other candidates, including
Roldos, and with the exception of Cynthia Viteri, who has
waffled on the issue.


5. (C) But Correa, a former finance minister and economist,
has staked out his harshest positions on economic issues, and
his election would derail any hope for more harmonious
commercial relations with the United States. He has publicly
relegated the idea of an FTA with the U.S. "to the trashcan
of history, where it belongs," and called for a more
regulated, less corrupt economy focused more effectively on
generating employment. "The neo-liberal model has failed,"
he bluntly asserts, and must be replaced by something new,
including government control of all aspects of petroleum
exploitation, reduction of the value added tax, and increased
import tariffs.


6. (C) Correa recently told interviewers he considers Nestor
Kirchner a role model, for Kirchner's "pragmatism" and
defiance of international financial institutions in favor of
social justice and Argentine economic revival. He is
currently visiting Argentina to meet with Kirchner and social
groups there. The choice of Kirchner as a hero is
politically apt here, probably intended to counter popular
conceptions of Correa as a stalking-horse for the more
controversial Chavez. As minister, Correa disrupted
relations with the IFIs, and courted Chavez in search of
financing alternatives (which have largely not materialized),
fueling unconfirmed speculation of possible support from
Chavez for Correa's campaign. Were he to be elected
president, we would expect Correa to eagerly seek to join the
Chavez-Morales-Kirchner group of nationalist-populist South
American leaders.

How Serious A Threat?
--------------


7. (C) Representatives of the major political parties here
(Democratic Left in the highlands and the Social Christians
on the coast) tend to denigrate the electoral threat Correa
represents, despite having the most to lose if Correa surges.
PSC leader Leon Febres Cordero called Correa "rude"
("malcriado") in his confrontation with Cynthia Viteri,
praising Viteri for her capable handling of his barbs during
the August 22 public debate. Others are baffled by Correa's
slow growth in the polls. Cesar Montufar, leader of the
Democratic Key movement and a reformist leftist congressional
candidate, asserts that the Correa campaign's ideological
cast has only limited appeal for Ecuador's poor majority.
These voters just do not care whether U.S. forces have access
to the Manta base, for example. What they care about are
education and health care opportunities for their children,
job creation and justice.


8. (C) Recent polls seem to bear this out. A recent
"Informe Confidencial" poll showed Correa's support to be
higher in the upper class (25%) than among the middle (14%)
and lower classes (10%). Similarly, his support was highest
among more educated voters (18% with university grads, 11%
with high schoolers, just 9% among those with a primary
education and only 4% among those without any formal
education. His support is higher in the highlands (14%) than
on the coast (10%),where he hails from and where populists
predominate.


9. (C) We are less sanguine about Correa's hitherto limited
public appeal. In Correa's favor is that he is smart,
articulate, aggressive and telegenic, and a self-defined
"Christian humanist of the left," all of which could
reinforce his standing as the election goes forward and the
undecided begin deciding. Should he make the second round
run-off on November 26, Correa's anti-systemic appeal could
overwhelm a more conventional rival.

Comment
--------------


10. (C) Our interests in strengthening democratic
institutions by supporting free, fair, transparent and
inclusive elections, argue for strong USG support to the
election observation mission being mounted by the OAS. Like
other democratic institutions here, Ecuador's election
authorities are weak and politicized. Outside observation is
essential to building voter confidence in the process,
visibly assuring skeptical Ecuadorians that authorities
cannot commit abuses with impunity. Beyond supporting a
clean electoral process, however, we have few levers to
influence Ecuadorian voters. Ecuador's media elite is
hyper-sensitive to perceived internal meddling, so overt
attempts to influence voter decisions is fraught with risk.



11. (C) Privately, however, we have warned our political,
economic, and media contacts of the threat Correa represents
to Ecuador's future, and have actively discouraged potential
alliances which could balance Correa's perceived radicalism.
The Ambassador has also opened a personal dialogue with
Correa, to avoid estrangement. (Correa recently
characterized his relations with us as one of "mutual
respect.") We will continue to monitor whether his campaign
reaches out more effectively to the lowest rungs of
Ecuadorian society. As noted by Andres Oppenheimer in the
wake of the presidential debate he moderated, there are few
signs that Ecuadorians or their candidates understand the
dangers of supporting "populist politicians who promise magic
solutions that haven't worked anywhere." We will be alert to
signs that Ecuador's poorest voters break toward Correa in
the final weeks of the campaign.
JEWELL