C O N F I D E N T I A L QUITO 001081

SIPDIS

SENSITIVE
SIPDIS

E.O. 12958: DECL: TEN YEARS
TAGS: PGOV PREL EC
SUBJECT: DEPUTY SECRETARY NEGROPONTE MEETS WITH CIVIL
SOCIETY REPRESENTATIVES


Classified By: Ambassador Linda Jewell for reasons 1.4 (b&d).


1. (C) Summary: The Deputy Secretary rounded out his Quito
visit with a meeting at the Ambassador's Residence with six
representatives from a diverse array of civil society sectors
to gain a non-governmental perspective on Ecuador's current
political and economic outlook. A/S Shannon and DCM Brown
also participated. End Summary.


2. (C) Former Finance Minister Mauricio Pozo opened the
discussion with an overview of Ecuador's macroeconomic
health. He noted that the country is enjoying an
unprecedented abundance of resources, thanks mostly to high
oil prices but also to ATPA-fuelled growth in non-traditional
exports. But he expressed strong concern that this abundance
was removing any sense of urgency for needed reforms and
encouraging an undisciplined approach to spending by the
Correa government. This was sustainable in the short term,
but if unchanged by early to mid 2008 he worried that the
country could face economic crisis.


3. (C) Former FTA negotiator Manuel Chiriboga shared Pozo's
concerns on the economic front. He lamented that the country
-- including under the previous government -- had developed
no consensus about the economic model it should pursue,
making it no surprise that in the end the effort to achieve
an FTA lacked needed public and political support and fell
short. There was no chance to revive that effort in the
short-term, but perhaps later if Ecuador found itself between
both Peru and Colombia with FTAs then a fresh momentum could
develop. Although disappointed by the current setback on
trade liberalization, Chiriboga was encouraged by Correa's
hints that he might tackle the country's unsustainable and
damaging domestic energy subsidies. Shifting the
conversation to politics, Chiriboga explained that the
country had reached a point of such unprecedented
institutional collapse that the upcoming constituent assembly
offered the only way out. Frustration was such that had the
assembly not been approved, the situation could have

disintegrated into a more dangerous scenario (implying the
risk of violence).


4. (C) Jose Valencia, director of respected political NGO
Participacion Ciudadana, agreed. He noted that the 81%
support for the constituent assembly is the most
overwhelmingly positive electoral result for such an
initiative in Ecuador's history. He said that traditional
political parties were thoroughly discredited. They were not
internally democratic, instead representing the narrow
interests of small groups and a corrupt spoils-system model
of politics that the voters have now rejected.


5. (C) Enrique Ayala, rector of the Andina University and a
member of the Socialist Party, brought the perspective of
someone who served in the previous two constituent
assemblies. He did not believe that Correa forces were
secretly drafting a new constitution for the assembly, but

SIPDIS
instead would offer broad guidelines and use the current
constitution as a point of departure. Of equal importance,
he said, would be the assembly's decisions on other elements
of the system: whether to suspend or dissolve the current
Congress; whether to install new courts and other government
bodies, and so forth. Although confessing unabashed hope
that the assembly would result in a new constitution of
leftist orientation, he was not optimistic. He was certain
that Correa would have a controlling majority in the
assembly, but he feared that the leftist movements coalescing
around Correa would eventually splinter and fail to achieve
consensus on key issues.


6. (C) Maria Gloria Alarcon, President of the Chamber of
Commerce of Guayaquil, expressed the deep concerns felt by
many members of the business community about Correa's
policies. He regards private enterprise as the enemy, she
said. There is no dialogue with the current government. She
is worried about respect for fundamental liberties, citing
not only his harsh rhetoric against the business class but
also the media. And she is worried about his affinities with
Chavez and the influence that Venezuelan petro-dollars could
have on future developments in Ecuador.


7. (C) Carlos Jijon, a senior journalist based in Guayaquil
who has known Correa for many years, focused his comments on
Correa's personality and background. He emphasized the

formative importance of liberation theology in the
development of Correa's social and political views.
According to Jijon, Correa was a disciple of Monsignor Proano
of Riobamba, the leading proponent of liberation theology
ideas in Ecuador in the 70's. He accepts the legitimacy of
"Christian violence" as a response to the more offensive
"violence of a child who goes to bed hungry." He is an
intelligent and cultured man, and most importantly, honest.
Ecuadorians have become accustomed to discounting the strong
rhetoric of other recent Ecuadorian populists who
opportunistically change their positions as convenient, but
that would be a mistake in the case of Correa. He firmly
believes in everything he says and there should be no
surprises on that score. He is a genuine revolutionary, and
circumstances are such that he is the most powerful President
that Ecuador has had in generations. Jijon believes Correa
will be in power for the next 15 years.

Comment


8. (C) This dialogue with representatives across a wide
spectrum of Ecuadorian civil society conveyed the broad
consensus that Ecuador's current political system is
thoroughly broken, and the mix of hope and deep concern about
Correa's capacity and vision for attempting to fix it.


JEWELL