NEW COORDINATING MINISTER FOR ECONOMIC POLICY BORJA

C O N F I D E N T I A L QUITO 000154 SIPDIS E.O. 12958: DECL: 03/04/2019 TAGS: ECON PINR ETRD PREL EC SUBJECT: NEW COORDINATING MINISTER FOR ECONOMIC POLICY BORJA Classified by DCM Andrew Chritton. Reason: 1.4 b and d. ¶1. (C) Sum... id: 195027 date: 3/3/2009 21:03 refid: 09QUITO154 origin: Embassy Quito classification: CONFIDENTIAL destination: header: VZCZCXYZ0000 RR RUEHWEB DE RUEHQT #0154 0622103 ZNY CCCCC ZZH R 032103Z MAR 09 FM AMEMBASSY QUITO TO RUEHC/SECSTATE WASHDC 0110 INFO RUEHBO/AMEMBASSY BOGOTA 7991 RUEHCV/AMEMBASSY CARACAS 3414 RUEHLP/AMEMBASSY LA PAZ MAR LIMA 3058 RUEHGL/AMCONSUL GUAYAQUIL 4137 -------------- header ends -------------- C O N F I D E N T I A L QUITO 000154 SIPDIS E.O. 12958: DECL: 03/04/2019 TAGS: ECON PINR ETRD PREL EC SUBJECT: NEW COORDINATING MINISTER FOR ECONOMIC POLICY BORJA Classified by DCM Andrew Chritton. Reason: 1.4 b and d. ¶1. (C) Summary. Diego Borja replaced Pedro Paez in the high profile position of Coordinating Minister of Economic Policy in December ¶2008. Paez was apparently replaced because he was not able to accomplish important administration objectives in the economic arena. Borja, an economist and politician, has switched among political parties several times, served a six month stint as Economy Minister in 2005/2006 (when he masterminded a controversial hydrocarbons law), and worked as the head of Ecuador's flower exporter association. He appears to be the /government's point person on developing a GOE adjustment program to address its macroeconomic problems brought on by falling oil prices, exports and remittances. End summary. BIOGRAPHICAL INFORMATION -------------- ¶2. (U) Borja has been a member of several political parties. He was elected to the Constituent Assembly in September 2007, as a candidate of the alliance between the social-democratic "Izquierda Democratica," the Poder Ciudadano Movement (which he founded),and two other democratic socialist movements, "Acuerdo Democratico" and "Nuevo Acuerdo Nacional." Before forming the Poder Ciudadano Movement, Borja was a national leader of "Movimiento Nuevo Pais" (New Country Movement),where he was an adviser to Presidential candidate Freddy Ehlers, as well as alternate representative from Ecuador to the Andean Parliament. ¶3. (SBU) Borja served as Minister of Economy and Finance from December 2005 to July 7, 2006 during the Palacio administration. He was behind the 2006 Hydrocarbons Reform Law that required private oil companies to share at least 50% of extraordinary revenues with the state. In July 2006, Palacio called for the resignations of all his cabinet members; Borja offered his resignation after becoming involved in a contentious disagreement with Presidential Secretary Modesto Apolo over implementation of the hydrocarbons law. Following the 2006 state seizure of U.S. Occidental Petroleum's assets in Ecuador, Borja was appointed to a commission to oversee the transfer and operation of the fields and was instrumental in creating the administrative unit formed to operate these fields. ¶4. (C) Prior to his role as Minister, Diego Borja was the Executive Director of Ecuador's largest association of flower growers and exporters, Expoflores. He participated in and supported FTA talks with the U.S. during this time, representing the flower industry. However, he left the association on contentious terms, and Expoflores subsequently initiated a legal case stemming from some of his actions at the association. In addition, some in the flower industry felt that he went against their interests in his later activities in the Finance Ministry (for example, with the hydrocarbons law, which they felt would cause important ATPA benefits to be terminated). One person in the flower industry has called Borja a crook, without providing any specifics. ¶5. (U) Borja also worked as a consultant on competitiveness and productivity for institutions such as the Andean Development Corporation (CAF),taught economics at Catholic University in Quito, and served as a visiting lecturer at other universities in Ecuador. He has a Master's degree from the Catholic University of Louvain in Belgium (the same school were Correa got his Master's degree) and an Economics degree from the Catholic University of Ecuador. He was born in Quito, Ecuador on May 1, 1964. ¶6. (C) Borja travelled to Washington in February 2009 along with Finance Minister Elsa Viteri to talk to the InterAmerican Development Bank, International Monetary Fund, and USG officials. According to an IMF official, Borja was willing to provide economic data to the IDB and IMF officials. In contrast, he said, Viteri was reticent and appeared intimidated by Borja. The IMF official said that Borja seemed pragmatic about doing what was necessary to provide the IMF with data about Ecuador's economic program, and obtained Correa's agreement to provide fiscal data and send Ecuadorian technicians to talk the IDB and IMF staff about Ecuador's adjustment program. ¶7. (C) Comment: Borja is often described as a political opportunist and pragmatist. In contrast to his predecessor, Pedro Paez, an academic who appeared to accomplish little in his tenure, the GOE may need Borja at this time, as the GOE tries to maneuver through a very difficult economic climate. Borja is not particularly close to Correa, but he is a political operator who will likely get more done than Paez. It is an open question whether he has the economic instincts to implement a sound economic program. HODGES =======================CABLE ENDS============================