ECUADOR ANALYSTS DEBATE CORREA'S INTENTIONS DURING

C O N F I D E N T I A L QUITO 002533

SIPDIS

SIPDIS

E.O. 12958: DECL: 11/21/2017
TAGS: PGOV PREL ECON EC VE CO
SUBJECT: ECUADOR ANALYSTS DEBATE CORREA'S INTENTIONS DURING
DAS MCMULLEN LUNCHEON


Classified By: Ambassador Linda Jewell FOR REASON 1.4 (D)


1. (C) Summary: Ecuadorian analysts reflected differing
assessments of President Correa's policies during a November
13 luncheon with visiting WHA DAS Christopher McMullen,
hosted by the Ambassador. Participants highlighted the
difficulty of predicting the economic model that President
Correa might adopt, although most believed it would likely be
state-driven. While there was general skepticism that Correa
was following the Venezuela economic/political model, some
analysts expressed concern that the lack of a viable
opposition meant that Correa could impose his will on the
Constituent Assembly that begins its work on November 29.
These analysts characterized Correa's foreign policy as
prudent, independent, nationalistic, and distinct from the
anti-American policy of Chavez. (End Summary)

CHANGE WITHOUT LIMITS


2. (C) Latin American Faculty for Social Sciences (FLACSO)
political scientist Simon Pachano emphasized the wide
agreement within Ecuador that the country's political and
economic model of the past decade was corrupt and that
radical change was in order. The question that remained, he
said, was how to bring about that change. Calling Ecuador's
former power groups mafias, Universidad San Francisco
economist and former finance minister Magdalena Barreiro
stressed the difficulty of actually changing the model rather
than only the groups in power.


3. (C) FLACSO international relations expert Grace Jaramillo
thought the GOE had taken the change diagnosis too far and
was destroying important institutions in the process.
Pachano noted that Correa was only the most recent in a
series of Ecuadorian presidents since 1996 who were elected
as outsiders who promised to fix the system. Andean Simon
Bolivar University Latin American studies professor Pablo
Andrade believed the government might end up occupying all
political space like the PRI in Mexico did (implying at least
a veneer of democracy) or could become more authoritarian.


4. (C) Responding to McMullen's question about limits on the
Correa administration's power, the group saw no real limits.
El Comercio newspaper editorialist Marco Arauz said the media
would try to be a critical observer of events, but could not
play the role of a political opposition or a significant
counterweight to government power. Andrade commented that
the Armed Forces had been either coopted or marginalized
sufficiently that they should also not be expected to play
such a role with the government, as they sometimes have in
the past. Pachano, joking that as an expert on Ecuador's now
defunct political parties he had suddenly become a historian,
predicted it would be a number of years before stable
political parties re-emerged.

CORREA'S ECONOMIC MODEL


5. (C) Jaramillo said Correa wanted to make the state the
motor of development, but had not yet decided exactly how to
achieve that end. She did not think the GOE rejected having
a private sector, but rather wanted to restructure it.
Andrade agreed that the private sector as currently
constituted would not survive. Andean Simon Bolivar
University international relations and democratic theory
professor Cesar Montufar saw Correa's policies as aimed at
political rather than economic goals, via centralization and
strengthening the state, arguing that they fundamentally
reflected the Chavez political model, if not necessarily in
intent than in probable outcome. Pachano expressed concern
that the government sought to control key areas of the
economy in a clientelistic and paternalistic manner, which
denied resources for more productive purposes. He mentioned
the irony of Correa's anti-neoliberal rhetoric of the "long,
dark night" given that Ecuador had implemented fewer
neoliberal reforms than other Latin American economies (a
fact that the charts accompanying Correa's own "Economist"
article in 2002 revealed).


6. (C) Jaramillo noted that while Venezuela imports all
products it needs, Correa is essentially a nationalist who
seemed to be pursuing a self-sustaining national economy.
Participants agreed that Ecuador,s more diversified economy
made it fundamentally different than that of the Venezuela
example, but still thought that an economic policy of this
type was untenable in the long run. Arauz highlighted the
economic plan drafted by the National Secretariat of Planning

and Development (SENPLADES),which relied on
micro-enterprises and implicitly encouraged isolation rather
than international trade and investment. The DCM termed the
SENPLADES plan utopian, a characterization that participants
agreed with.


7. (C) Barreiro criticized the GOE for essentially
neglecting economic policy and unwisely believing that state
investment could substitute for that from the private sector.
She lamented the loss of independence of institutions like
the Central Bank. Barreiro noted that Correa did not allow
anyone in the GOE to make any significant decisions without
his personal involvement and that political objectives were
his priority.

VENEZUELA AND COLOMBIA


8. (C) The Ecuadorian guests did not believe that President
Correa could be cast simply as a disciple of Venezuelan
President Chavez even though Correa (and the Ecuadorian
public) viewed Chavez positively. Pachano termed the GOE
prudent and careful in its dealings with Chavez, noting that
Correa had publicly opposed unlimited re-election. Barreiro
highlighted Correa's remark in Miami that he had learned from
Chavez' errors. Arauz pointed out that Correa did not
hesitate to offer advice to Chavez, such as in regard to the
Central Bank. Andrade considered Correa's foreign policy
generally independent, based on cost-benefit calculations.


9. (C) Jaramillo compared Correa to Colombian President
Uribe in terms of the importance of a strong leader who was
remaking institutions. McMullen pointed out that we knew
exactly what Uribe planned to do once elected, but with
Correa his intentions appear to remain a matter of debate.
Arauz suggested this reflected a higher Ecuadorian tolerance
for ambiguity.

COMMENT


10. (C) The debate among the analysts illustrated the
continuing lack of clarity on the Correa government's future
political and economic policies. While some in the group
were more critical of Correa than others, no one disputed
that the model of the past was corrupt and that changes were
in order. They also agreed that his unprecedented base of
support and purview for action meant that he almost alone
would determine ultimate success, failure and direction,
almost regardless of other internal and external factors over
the medium term.


11. (U) DAS McMullen cleared this message.
JEWELL