wikileaks ico  Home papers ico  Cables mirror and Afghan War Diary privacy policy Privacy
Identifier
Created
Classification
Origin
07QUITO1992
2007-08-30 21:02:00
CONFIDENTIAL
Embassy Quito
Cable title:  

ECUADOR: PROPOSALS ILLUMINATE KEY ISSUES FOR

Tags:   EFIN  ELAB  ENRG  KDEM  PGOV  PHUM  PREL  EC 
pdf how-to read a cable
VZCZCXYZ0000
RR RUEHWEB

DE RUEHQT #1992/01 2422102
ZNY CCCCC ZZH
R 302102Z AUG 07
FM AMEMBASSY QUITO
TO RUEHC/SECSTATE WASHDC 7645
INFO RUEHBO/AMEMBASSY BOGOTA 6856
RUEHBR/AMEMBASSY BRASILIA 3782
RUEHCV/AMEMBASSY CARACAS 2659
RUEHLP/AMEMBASSY LA PAZ AUG LIMA 1885
						C O N F I D E N T I A L QUITO 001992 

SIPDIS

SIPDIS

E.O. 12958: DECL: 08/30/2017
TAGS: EFIN ELAB ENRG KDEM PGOV PHUM PREL EC
SUBJECT: ECUADOR: PROPOSALS ILLUMINATE KEY ISSUES FOR
CONSTITUENT ASSEMBLY

REF: A. QUITO 1655

B. QUITO 1785

C. QUITO 1488

D. QUITO 955

E. GUAYAQUIL 363

Classified By: DCM JEFFERSON T. BROWN FOR REASON 1.4 (D)

SUMMARY
-------


1. (C) Ecuadorian political parties and civil society groups
have put forward a variety of proposals for the new
constitution, which will be drafted by the Constituent
Assembly to be elected on September 30. Some of the major
issues Assembly members are likely to address include the
extent of state control over natural resources and the
broader economy, dollarization, social needs, banking and
labor reforms, and new formulas governing central
government-provincial power and revenue sharing. They will
also consider means to depoliticize government oversight
institutions, democratize politics, and reform the courts.
The Constituent Assembly's greatest challenge will be to
achieve sufficient consensus behind the new constitution to
help build respect for the rule of law.

CONESUP TO ASSEMBLE DRAFT CONSTITUTION


--------------------------




2. (U) President Correa requested on February 28 that the
National Council of Higher Education (CONESUP) collect and
catalogue proposals for the new constitution from individuals
and political organizations and then draft a proposed
constitution. CONESUP has made the proposals available on
its website. It released the first part of its draft
constitution on August 24.



3. (SBU) Like the current constitution, the version
elaborated by the Constituent Assembly will likely be a
complex document. Rather than sketching a broad framework
for government institutions like its U.S. counterpart, the
Ecuadorian constitution traditionally includes numerous
specific -- and sometimes impractical -- provisions.



4. (C) How the issues will be addressed in the Constituent
Assembly will depend on who is elected September 30. Some
groups, including Correa's Acuerdo PAIS movement, have laid
out in general terms an agenda they would like to address in
the Constituent Assembly. (Note: Acuerdo PAIS includes the
groups in Alianza PAIS together with New Country Citizens and
Democratic Alternative.) Many groups, particularly those of
the center-right, appear to be focused as much or more on
blocking certain radical reforms rather than offering their
own blueprint. A nationwide early August poll by the firm
Informe Confidencial (shared privately with us) showed 51
percent favoring candidates that support the Correa
government and 19 percent favoring candidates that oppose the
government. Politics in Ecuador are volatile, the
apportionment rules for seats are very complicated, and polls
also show most have not decided yet how to vote, so it is too
early to know how solid Correa's ability to control the
Assembly will be.



5. (U) A preview of major issues the Assembly will consider

follows:



I. DOLLARIZATION


--------------------------




6. (C) Dollarization could be a thorny issue in the
Constituent Assembly. The current constitution names the
sucre as Ecuador,s official currency. Dollarization is
popular with most Ecuadorians for the stability that it has
brought, but some Ecuadorians resent dollarization (mainly
for nationalistic reasons). In the Informe Confidencial
poll, 76 percent favored maintaining dollarization and 18
were opposed. Even Correa and fellow leftists who oppose
dollarization in the long term have acknowledged its
short-term practical necessity and popular appeal. It seems
clear that the president hopes to eventually replace the
dollar with a national or regional currency. Opposition
parties (particularly those in Guayaquil) have tried to paint
Correa as "anti-dollarization" and are making this issue one
of their core campaign themes.

II. BANKING CONTROLS


--------------------------




7. (SBU) After Congress repeatedly rebuffed his proposal to
substantially increase government control over the banking
sector, Correa asserted that he would pursue his objectives
in the Constituent Assembly (REF A). A number of leftist

members of Congress were sensitive about the impact that
strong controls would have on microcredit and small financial
institutions, so joined their colleagues in approving less
draconian controls. Therefore this issue may not play out
along left/right lines in the Constituent Assembly, even
though it appears to be a priority issue for Correa.

III. ROLE OF THE STATE IN THE ECONOMY


--------------------------




8. (SBU) Economic reform is likely to be the centerpiece of
Correa,s plan for the new constitution. His administration
has publicly stated its goal of creating a thus-far
ill-defined socialist economic model of "social inclusion."
They have not clearly articulated how this would be addressed
by constitutional reform, but may seek provisions to
strengthen state regulation of major utilities, intervention
to offset "market failures," promotion of micro-enterprises,
and a focus on developing the domestic market. Center-right
delegates, if they were to gain a sizeable share of the
seats, would be focused on preventing any significant
redefinition of the state's role in the economy.

IV. NATURAL RESOURCES


--------------------------




9. (SBU) Leftists envision some form of increased state
control and greater state share of Ecuador's oil and mineral
resources. In an August interviews, new Energy Minister Galo
Chiriboga stated that Ecuador would only work with
state-owned oil companies like PDVSA or Petrobras.
Renegotiation of contracts with transnational corporations to
comply with the new 2006 hydrocarbons reform law, pending
since the beginning of the administration, is a popular
topic. Many claim that Ecuadorians should benefit more from
their natural resources. Center-rightists want to keep the
status quo, where more efficient private sector
concessionaires exploit state-owned resources while paying
royalties.



V. LABOR REFORM


--------------------------




10. (SBU) Correa administration officials have indicated
that they will pursue labor reform in the Constituent
Assembly rather than through dialogue with organized labor
and business. The Correa administration has also stated its
intention to include a constitutional prohibition of
subcontracting. Ecuador's antiquated labor code needs to be
updated, but previous efforts to bring some sort of consensus
between employers and employees have floundered. One
provision in the CONESUP draft would mandate use of mediation
to resolve labor conflicts. It is not clear what changes the
Correa administration, labor, or business sector will pursue
in the Constituent Assembly.

VI. BALANCE OF POWER AND DECENTRALIZATION


--------------------------




11. (SBU) Candidates of all stripes are addressing the need
for a balance of powers between various branches of
government and between national and local governments. Four
of the five candidates on an August 1 panel of Assembly
candidates (Ref B), including government supporters and
opponents, stressed the importance of avoiding a
concentration of power.



12. (SBU) Many sectors of Ecuadorian society consider
decentralizing the government structure a huge priority.
Opposition leader and Social Christian Party Guayaquil Mayor
Jaime Nebot has long championed decentralization, and leaders
of less wealthy provinces consistently complain about an
undue focus on Quito and Guayaquil. Local authorities are
often seen as more effective in delivering services than the
federal government, but any discussion about decentralization
will be fraught with tension over how to divvy up funding.



13. (C) One proposal is to consolidate existing provinces to
form larger regions. It appears that the government favors
creating regions of some sort. Former president and
Patriotic Society Party leader Lucio Gutierrez explained to
us his proposal for four large regions cutting across the
country so that each includes coastal, mountainous, and
Amazon lowland areas.



14. (C) Other groups seek guarantees of autonomy for
indigenous groups. Congressman Ramsses Torres of the
indigenous Pachakutik movement told us he lacked confidence
in the government's support for such autonomy.

VII. PRESIDENTIAL REELECTION


--------------------------





15. (C) Ecuador,s current constitution does not allow
presidential reelection. Since no president in the past ten
years has finished his term, this has never been challenged
by any president or political party. There is growing
support for reelection, although some believe it would be
appropriate only after at least one intervening term.
President Correa has been careful not to publicly promote a
reelection clause, but he clearly supports it and considers
it illogical that the presidency is the only elected office
without reelection. Quito Vice Mayor Andres Vallejo of the
Democratic Left Party told us he considers presidential
reelection a reasonable arrangement for other countries, but
not one that should apply in Ecuador.

VIII. CONGRESS AND POLITICAL PARTIES


--------------------------




16. (SBU) Another goal of the Constituent Assembly is to
reform and democratize Ecuador's political parties. Most of
the parties in the current system are led by "caudillo"
strongmen who run the parties like their personal fiefdoms.
Democracy activists want to democratize internal party
workings through, for example, a primary system. The major
established parties have been conspicuously silent on this
topic.



17. (SBU) Another popular target for reform in the Assembly
is Congress, which has a 6% credibility rating. Most
Ecuadorians support a switch from proportional representation
to single-member or two-member districts. Under this system,
representatives would be more directly accountable to their
constituents.

IX. COURTS AND REGULATORY BODIES


--------------------------




18. (SBU) Many Ecuadorians consider other political
structures dysfunctional as well and want to depoliticize
government regulatory bodies and courts. Currently, seats in
these institutions are allocated based on a party,s
representation in Congress, creating a dangerous conflict of
interest. Some proposals suggest direct election of such
officials. Ecuadorian NGO Citizen Participation ExecDir Jose
Valencia told us his group recommended dividing the Supreme
Electoral Tribunal into two bodies, one linked to political
parties that would administer elections and a separate
independent body that would investigate campaign violations.



19. (SBU) Proposals from Ecuadorians of all political
stripes support reorganizing the judicial system to establish
a clear court of last resort. Ecuador has several high
courts, all of which have supreme authority in their
respective areas. Most propose placing these courts as
sub-courts under the jurisdiction of either the Supreme Court
or the Constitutional Tribunal and more clearly defining the
jurisdiction of each court. Other state institutions may be
reorganized as well.



X. FOREIGN TROOPS IN ECUADOR


--------------------------




20. (SBU) President Correa and other nationalists have
declared that Ecuador should not allow foreign troops on its
soil, although he has publicly stated his intention to
respect the terms of Ecuador,s agreement allowing the U.S.
military,s presence in its Forward Operating Location in
Manta until it expires. The No Bases Coalition, made up of
15 leftist groups, proposed to CONESUP in mid-August the
following language, "Ecuador is a territory of peace and, in
exercise of its sovereignty, will not host foreign military
bases or foreign troops, and will refrain from signing any
agreement which implies other forms of foreign military
presence."

WILL THE ASSEMBLY ALSO LEGISLATE?


--------------------------




21. (C) Following set-backs this summer with the current
Congress, which has rejected several Correa legislative
initiatives, Correa has called for the Constituent Assembly
to dissolve Congress for corruption and incompetence (Ref C),
not waiting until new constitution goes into effect. Members
of Congress are split on the issue. Some groups
ideologically close to Acuerdo PAIS, such as Pachakutik,
oppose the dissolution of Congress. Opponents of dissolution
claim that it would give Correa total control of the
government (assuming Correa controls the Assembly).



22. (C) Whether or not the Constituent Assembly actually
throws out the Congress, the Constituent Assembly could
create a legislative commission to pass urgent laws (REF D),
justifying it as part of its complete powers. If so, the

Constituent Assembly would acquire an even more complicated
agenda by trying to set the broad policy directions for
Ecuador while also entering into detailed discussion of
drafting legislation.

COMMENT


--------------------------




23. (C) The proposed changes to the Ecuadorian constitution
are a mixed bag that run the gamut from necessary and
long-overdue to completely unrealistic. Because of the
specific nature of the document, many Ecuadorians expect the
new constitution to address a number of problems that laws
have failed to solve. For this reason, many may be
disappointed with what the Constituent Assembly achieves. If
the Assembly is able to draft reforms that depoliticize
institutions and democratize politics, Ecuador could be
better positioned to deal with its challenges in a stable,
democratic fashion. However, successful constitutional
reform depends on widespread consensus and respect for the
rule of law, two elements not often on display here.
JEWELL