Lasso weighs his options following rejection of investment law; Calling new elections considered

Mar 26, 2022 | 11 comments

Following a day of meetings at Carondelet Palace, there was no indication of President Guillermo Lasso’s next move following the defeat of his investment law in the National Assembly. Early Friday, the presidential press office said Lasso would issue a statement Friday night but none was released.

President Guillermo Lasso is condiering his options following the defeat in the National Assembly of his investment law.

Asked during a break in the talks if the government was in crisis, Presidential adviser Diego Ordóñez said it was too early to tell. “On the other hand, this is certainly a government in paralysis.”

Among Lasso’s options is invoking the so-called “death cross” and calling new elections for both the National Assembly and himself. On Thursday, following the defeat of the investment law, Ordóñez said the move was “on the table” but unlikely any time soon.

Several Lasso supporters say the risks of new elections outweigh the benefits since he could be voted out of office and, even if he isn’t, there is no guarantee that a new Assembly would be more favorable to his programs. Others, however, say the death cross may be his only option if he decides the country is ungovernable. They point out that if elections are called, Lasso could rule by presidential decree for six months, enacting some of his policies, during the campaigns.

Another option being considered, according to several sources, is a public referendum on presidential priorities. “With the economy in crisis and with half the population unemployed or underemployed, [Lasso] would stand a good chance of winning a public vote and overruling the Assembly,” says Alberto Acosta Burneo, political analyst and economic advisor to former president Rafael Correa. “People are worried about the lack of opportunity and are not particularly concerned about ideology.”

Burneo adds that the president would probably include a number of issues on the referendum, including labor reform and the abolition of the Council for Citizen Participation and Social Control.

National Assembly members who opposed the investment law agree that the government is in limbo, if not in crisis. Marlon Cadena of the Democratic Left says that a new center-left coalition has formed in the Assembly and that any “neoliberal” proposals that Lasso puts forward will be defeated. “Although we remain open to dialog it is clear that no right-wing legislation will emerge from this body,” he said.

Meanwhile on Friday, opposition leaders in the Assembly challenged Lasso to back up his claim that some members asked for bribes and favors in exchange for votes. On Thursday, Lasso said he would provide the evidence “when the time is right.” Former Democratic Left presidential candidate Xavier Hervas has threatened to sue Lasso for claiming that his businesses were evading taxes.

According to Lasso’s oppenents, the tide has turned decisively against him. José Villavicencio, president of the United Workers Front that staged protests this week against the investment bill, says that the Assembly’s vote signals major changes in governance. “There is a left turn in Ecuador and the commercial interest will no longer come ahead of the interest of the people,” he said. “Lasso was trying to say his policies will bring more employment but people are beginning to understand that they would only put more money in the pockets of the mercantile class.”

Ecuador business interests claim that Friday’s vote could cost the country billions of dollars in lost investments. “The message to the world was, ‘don’t do business in Ecuador’,” says Miguel González of the Ecuador Business Consortium. “The value of our bonds is already collapsing and business negotiations that were underway are being put on hold.”

“Let’s make no mistake about what is happening,” González added. “This is part of the attempt by the leftist Correistas to take over the government. President Lasso is in a very difficult position today, as is the country. He has hard decisions to make and we will find out what they are in the coming days and weeks. Fortunately, he is not without options.”


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