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Ecuadoreans Vote For President; Austerity-weary Nation Leans Toward Socialism

Ecuadoreans Vote For President; Austerity-weary Nation Leans Toward Socialism

Ecuadoreans choose a new president on Sunday, with many voters weary of painful economic austerity measures and eager for a return to socialism, encouraging leftwing candidate Andres Arauz who hopes to win without needing a runoff vote.

QUITO: Ecuadoreans choose a new president on Sunday, with many voters weary of painful economic austerity measures and eager for a return to socialism, encouraging left-wing candidate Andres Arauz who hopes to win without needing a runoff vote.

The 36-year-old economist, a protege of former president Rafael Correa, leads in polls on promises to make $1 billion in direct cash payments to families and to disavow the conditions of a $6.5 billion IMF financing package.

His main rival, Guillermo Lasso, has been hurt by his image as a conservative banker, and pollsters say the possibility of low voter turnout due to the pandemic could dent his support.Lawyer and indigenous activist Yaku Perez is third in the polls.

An Arauz victory would extend Latin America’s return to leftist policies, already evident in Argentina and Bolivia, a challenge for Washington as it duels with China for influence in the hemisphere.

“We have to continue convincing (people), so that … our victory, the victory of hope, will be in a single round,” Arauz wrote on his Facebook page on Friday.

“Let’s do this right away.”

A brutal coronavirus outbreak last year left bodies uncollected on the streets of Ecuador’s largest city, Guayaquil. Lockdowns around the world slashed fuel demand and prices for oil, Ecuador’s main export, battering an economy also reeling from sharp cuts to government spending.

President Lenin Moreno, a former Correa ally, drove a pro-market agenda on hopes of reviving a sluggish and heavily indebted economy. His efforts sparked an angry backlash, with 10 days of violent street protests in 2019 against a planned fuel price hike.

Ecuadorean law makes voting mandatory and applies a $40 penalty for abstention.

Middle class voters who favor Lasso may be more likely to pay the fine to avoid coronavirus exposure, while low-income voters that lean toward Arauz have greater incentive to vote because they are less able to afford the fine.

Pollsters in recent days have started to see a slightly greater likelihood of Arauz winning a single round. Arauz allies are expected to make a strong showing in voting for a new legislature.

Financial markets are watching, and Arauz’s rhetoric has already sparked a bond selloff.

He has said he will continue paying the country’s debts, but has said social investment will take priority and also has called for an investigation of last year’s $17.4 billion bond restructuring.

Arauz’s mentor, Correa, used nearly identical rhetoric during his 2006 election campaign. His government quickly defaulted on bonds and then bought them back at a discount.

Last month, Ecuadorean bonds were the worst performers among the JPMorgan EMBI Global Diversified index, with a -15% total return.

To win in a single round, Arauz needs more than 50% of valid votes, or 40% total with 10 percentage points more than the runner-up. Otherwise, a runoff vote will be held on April 11.

Perez, third in opinion polls, is running on an anti-mining platform, vowing to protect watersheds from pollution.

Also, the city of Cuenca will vote in a referendum on whether to ban mining around any of the rivers that go through the city. This could spook mining companies already contending with opposition from indigenous activists.

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first published:February 07, 2021, 16:45 IST