Ecuador's Succession Politics Get Ugly

(Bloomberg View) -- When the government candidate eked out a victory in the bitter runoff for president of Ecuador in April, incumbent Rafael Correa was ebullient. The willful populist who ran the small Andean nation like a private finca for the last decade had staked his legacy on the continuation of his "Citizen's Revolution," pulling out the stops for his anointed successor against a surging opposition.

So it wasn't unreasonable to expect both gratitude and fealty from his understudy. But in the two months since taking office, President Lenin Moreno has been anything but the doting mentee. Calling for a national dialogue, he reached out to opposition leaders, including Correa's blood enemy, former president Abdala Bucaram. At a time when high-ranking Ecuadorean officials from Correa's administration are being questioned for graft, he announced an anti-corruption drive, and granted generous property rights to indigenous communities with whom Correa had repeatedly clashed.

The differences between creator and creature flared into a public battle, spilling over to social media. Correa called his successor "disloyal" and "mediocre," and warned of the danger of "crossing red lines." On Twitter Moreno parried that "we continue committed to reconcile the country," adding: "As for hate, don't count on us." Such apostasy is new in Ecuador, according to political scientist Andres Mejia Acosta, of Kings College London. "The unspoken code for a new leader is that you leave your predecessor alone and the party allows you to govern," he told me.

Latin America has seen such struggles before. In 2010, for instance, Colombia's President Juan Manuel Santos rode into office on the coattails of his charismatic former boss, Alvaro Uribe, only to scrap his mentor's bellicose script, reaching out to Venezuelan strongman Hugo Chavez and launching peace talks with insurgents. That gamble paid off, eventually ending the hemisphere's longest shooting war and winning Santos the Nobel Peace Prize.

For Moreno, more than political branding is at stake. Correa built his Citizen's Revolution on resource nationalism and aggressive government investment in infrastructure and social policies, all fed by soaring prices for oil and minerals during the roaring 2000s. Such lavishness burnished his popularity, allowing Correa to centralize power by capturing the courts and to bully critics and the media. He called the press "assassins with ink"; the government-packed media oversight authority, with its telling acronym Supercom, imposed more than 675 sanctions on media outlets and journalists since 2013.

But the spending outlasted the commodities bonanza. And as was the case with many other populists in the Americas, the bill has come due, in this case on Moreno's watch. Moreno takes over as Ecuador heads into its second year of recession, with the economy set to shrink by 0.2 percent in 2017 on top of a 1.5 percent contraction last year, according to the Economist Intelligence Unit.

Public-sector non-financial debt has almost quadrupled since 2011 to nearly 40 percent of gross domestic product, a flashing yellow light for the new government, the EIU's Mark Keller estimated. The amount Ecuador spends just to service its external debt has doubled since 2012, to $5.9 billion and counting.

For Moreno, moving to the political center, slashing spending, and easing political tensions are not a backlash against Correa, but a matter of survival. "Moreno will have little choice but to make tremendous cuts in government expenditures," said Keller. "Government has acknowledged growth must come from the private sector."

To Correa and his allies such moves would only compound the heresy, presaging difficult times for the new government. However, even if no counterrevolution is in the works, indications are the tensions may be easing. Though Moreno won just over half the vote, his approval ratings have topped 60 percent in some cities. And on July 3, a court in Quito, where the Andean strongman is used to winning, acquitted a web journalist whom Correa sued for "defamation" and "injuring his honor." It's a small sign that after a poisonous political decade, Ecuador may be ready for something new.

This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.

Mac Margolis writes about Latin America for Bloomberg View. He was a reporter for Newsweek and is the author of “The Last New World: The Conquest of the Amazon Frontier.”

To contact the author of this story: Mac Margolis at mmargolis14@bloomberg.net.

To contact the editor responsible for this story: James Gibney at jgibney5@bloomberg.net.

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