AMBASSADOR MEETS WITH ROLDOS AND VITERI

C O N F I D E N T I A L QUITO 002223 SIPDIS SIPDIS E.O. 12958: DECL: 09/05/2031 TAGS: PGOV ETRD ECON PREL EC SUBJECT: AMBASSADOR MEETS WITH ROLDOS AND VITERI Classified By: PolOff Jarahn Hillsman, Reasons 1.4 (b&d) ¶1. (C) Summary: The Ambassador met recently with the top two presidential candidates, according to current polls. Both alleged that dark horse candidate Rafael Correa was receiving support from Venezuelan leader Hugo Chavez, and Viteri lamented that Correa could reach the second round runoff election at her expense. Viteri and Roldos both gave surprisingly strong statements of support for a Free Trade Agreement with the U.S., and in general were eager to signal interest in better good relations with the USG and Embassy. End Summary. Roldos: The Stability Candidate, -------------- ¶2. (C) The Ambassador on September 5 attended a presentation by Leon Roldos (RED/ID) of his plan of government hosted by the Chinese Ambassador Liu Yuquin. The Ambassadors of Japan, Israel, Russia, Egypt, and Canada also attended (only non-European and non-Latin American Ambassadors were invited). Roldos was accompanied by his running mate Ramiro Gonzalez and five members of the campaign team. Roldos told the group that he supports an FTA with the U.S., and that if put to popular referendum, he would add his government's endorsement of the trade agreement. "The current government's FTA approach lacked transparency, raising suspicion and unease over the agreement, something I would avoid," he affirmed. Roldos also stressed the importance of signing multiple FTAs with economic partners. He again clarified previous statements that he would not pay Ecuador's foreign debt, saying that he instead hopes to reshape relations with international financial institutions to better address Ecuador's development needs. Responding to concerns voiced by the Japanese and Russian Ambassadors, Roldos stressed that his government would work hard to improve the investment climate. ¶3. (C) Turning his attention to governance challenges, Roldos told the Ambassadors that Ecuador needs order and consistency, not a new constitution. "That is why I will not agree to a constituent assembly, and instead plan to use a popular referendum to identify and organize priorities," he said. In response to the Ambassador's query on his electoral strategy to counter populist competitors, Roldos admitted that while he may lack the charisma of other candidates, his personal "authenticity" and honesty will attract undecided �A;voters. ¶4. (C) Roldos also sought to link Correa with Venezuelan leader Hugo Chavez, saying that Chavez had phoned him a month ago to deny he was financially supporting Correa, an assertion Roldos claimed to doubt. Roldos also carefully explained his personal connection to Fidel Castro, noting the Cuban leader had provided medical assistance to his ailing adopted mother. Viteri on the Correa Risk and her Support for the FTA -------------- -------------- ¶5. (C) In a September 1 meeting with the Ambassador, PSC presidential candidate Cynthia Viteri focused on what Viteri sees as a realistic chance that Rafael Correa could win the presidential election. She said that supporters of Roldos calculate that Roldos would easily defeat Correa in the second round, and therefore are focusing their attacks on her. She asserted that Roldos is pursuing a misguided and risky strategy, arguing that Correa could very well defeat Roldos, were they matched in the run-off. Viteri continued that Correa is spending heavily in the campaign, using funds provided surreptitiously by Hugo Chavez. She also admitted that Correa,s rise in the polls has been at her expense. She cited her private polls (which exclude unlikely voters), show that Correa has risen two percentage points to 12 percent, while she has fallen by the same amount, to 15 percent. (note - another reputable poll released today showed Correa up to 14 percent.) ¶6. (C) The Ambassador said that if there is any chance for Ecuador to revive its FTA negotiations, the Palacio administration would have to resolve outstanding commercial and labor problems and the incoming administration would have to be committed to immediate, clear support for the FTA. Viteri signaled her support for an FTA, noting that the FTAs with Peru and Colombia mean that U.S. goods would still flow across Ecuador's porous borders with Colombia and Peru. Without its own FTA, Ecuadorian producers would face increased competition without reaping the increased export opportunities that would come with an FTA. She realized that some sectors might fear the competition, but believed those sectors could adapt with a bit of support, especially given her intent to create a favorable business environment. She asserted that were she to win, she would concentrate on making a clear, simple case to the Ecuadorian populace of the benefits of an FTA, noting in particular how consumers would benefit. Comment -------------- ¶7. (C) Viteri's candid remarks and Roldos' insinuations seem to indicate a shared and growing unease here over Correa's potential to reach the second round of runoff voting. Both of the current front-running candidates are clearly eager to enlist our sympathy by highlighting the prospect of Chavez support to the Correa campaign. Polls now show that Correa sits in close third place behind Viteri among decided voters, with positive upward momentum. Roldos' new, less equivocal support of an FTA with the U.S. is a welcome indication of a pragmatic centrism, at least in private, but he is unlikely to publicly champion that position, fearing Correa's appeal to undecided voters from the left. By implicitly appealing to us to counter Correa's electoral threat, the front-running candidates are privately revealing a lack of conviction that their private beliefs will appeal to voters. Ironically, Correa's populist appeal stems from his convincing faith in his own positions. Alarmingly, Correa shows strongest support among Ecuadorians with advanced educational degrees -- demonstrating this his anti-american positions resonate among those whose opinions are well-formed and probably more resistant to change. ¶8. (C) Both candidates also offered the strongest private comments we have heard to date from either of them on an FTA. Viteri,s statement of support showed a good appreciation of the importance of an FTA to Ecuador, while acknowledging the challenges of securing popular domestic support. Roldos,s support was also surprisingly straightforward, particularly in front of a mixed group of ambassadors. JEWELL