Cuenca High Life logo
Click here to subscribe to daily news sent to your inbox!
Click here to subscribe to our weekly eNewspaper sent to your inbox!

Ecuador News

Lenin Moreno struggles to escape the long shadow of Rafael Correa

By

From July 24 to 28, I had the opportunity to travel to Quito, Ecuador to present a paper at the International Studies Association-FLACSO regional conference and to speak with Ecuadorian businessmen, academics and others regarding the political dynamics and the security challenges in the country.

At a superficial level, Ecuador is a good-news story for the United States.  The Andean country has turned unexpectedly away from the populist socialism and anti-U.S. orientation of its previous president, Rafael Correa.

Evan Ellis

Since assuming power in May 2018, current President Lenin Moreno—widely presumed to be a Correa protégé—has replaced former leftist Correa’s appointees at key ministries such as Foreign Affairs, Finance and Defense with career professionals who are well-respected in the West.  Many of the Correa ministers had been questioned both for their policy choices and on ethical grounds.

With a new Attorney General and Comptroller General, the Moreno government has also opened or accelerated investigations into corruption and criminal activities by numerous figures from the previous government, including former president Correa himself, as well as the terms of Ecuador’s commercial contracts with the People’s Republic of China.  Those contracts are believed to contain terms that substantially harmed Ecuador for the benefit of individual Correa administration officials and Chinese companies.

The extent of Ecuador’s apparent shift in direction was highlighted by the June 2018 visit by U.S. Vice-President Mike Pence, whose warm tone included not only discussions regarding expanded U.S. security assistance and commercial ties, but also consideration of a possible future bilateral trade agreement between the two countries.

While Moreno government has indeed made significant progress in the fight against corruption and in improving Ecuador’s relationship with the United States, it would be a grave mistake for policymakers in Washington D.C. to break out the champagne just yet. Ecuador is in the process of an important, yet delicate transition, with the possibilities for opposing tendencies in the current dynamic to produce serious political problems in the country. For the United States to help Ecuador to succeed in this positive, but complex and delicate process, it is important to recognize the reasons for and limits to the changes that are taking place within its government.

President Lenin Moreno

The available evidence suggests that Lenin Moreno is a decent, thoughtful, and collegial man, committed to liberating Ecuador from the scourge of corruption into which his predecessor’s embrace of Bolivarian politics and Chinese financing plunged the country. Moreno is no conservative, but rather a man with a deeply-rooted orientation toward applying statist solutions to Ecuador’s challenges of inequality and development, and to viewing the groups and leaders of the global left as “the good guys.”

The suspect members of Moreno’s inner circle

The team that Lenin Moreno surrounded himself with in arriving at the presidency appears to reflect shared experiences and identification with leftist friends.  A prime example is Gustavo Larrea, who led the Revolutionary Left Movement (Movimiento Izquerda Revolucionario) that Moreno participated in against Ecuador’s military government while the two were students at the Universidad Central in the 1970s. Larrea was also exposed in the computer records of FARC leader Raul Reyes for his meeting with and participating in the now-disbanded Colombian guerrilla group , which in internal communications referred to him as “comandante Juan.”  The revelation ultimately obliged the Correa government to force him out. Larrea later supported Moreno’s candidacy and his February 2018 referendum on term limits through his “Democracy Sí” movement, and he has become a trusted advisor to the president.

Similarly, Moreno has a close personal bond with his former foreign minister, the far-left María Fernanda Espinosa and her Nicaraguan husband Eduardo Mangas.  Mangas, whose leftist credentials go back to his membership in the Sandinista Youth, and who later served in the government of Nicaraguan revolutionary leader Daniel Ortega, became Moreno’s personal representative to a range of bodies (with the limitations on the president’s ability to actively travel due to his disability), and is reportedly a driving force behind Espinosa’s foreign policy initiatives as Foreign Minister.  Mangas was forced out of his official role as assistant to President Moreno in December 2017 after the publication of a tape in which he was heard to say that the accusations of corruption made against leaders in Rafael Correa’s government were true. He subsequently refused to appear before authorities investigating the matter.

Former president Rafael Correa

Another example of Moreno’s criticized choice of confidants (apparently based on longstanding personal friendship) is Santiago Cuesta Caputi, who is accused of being involved in questionable oil contracts with China. In May 2018, Moreno named Cuesta his Minister for the Optimization of State Efficiency.

It is true that, as Moreno managed the transition of power from Correa, he incorporated members of Correa’s team into his own as part of his construction of a coalition. Moreno accepted Jorge Glas, Rafael Correa’s childhood friend from his Boy Scout troop in Guayaquil, to continue under him as vice-president, a role that he began under President Correa in 2013. When Glas was found guilty and incarcerated for illicit association over his involvement in the Odebrecht scandal, Moreno replaced him with another leftist Correa supporter, Maria Vicuña (whose father founded Ecuador’s Bolivarian socialist movement), Similarly, Moreno’s first two finance ministers, Carlos de la Torre and Maria Elsa Viteri, were close confidants of Rafael Correa.  Still, Moreno’s appointment of his own group of left-oriented friends (in addition to Correa allies), highlight the importance of interpreting carefully the president’s reasons for subsequent appointments of a more centrist orientation, and the limitations on President Moreno’s potential tack to the middle.

Moreno’s cabinet (hesitantly) shifts toward the center

As mentioned above, Moreno’s initial choice for Foreign Minister was the strongly left leaning María Fernanda Espinosa. The choice was arguably not to placate Correa’s faction of Alianza País so much a personal choice; Espinosa was a close friend and confidante of Moreno who had worked with him in 2014 when she was Ecuador’s Permanent Representative to the United Nations in Geneva and he was supporting the country’s United Nations delegation there, and may have had a role in employing Moreno’s daughter at the Ecuadorian mission there. Ecuadorians consulted for this work suggested that Espinosa’s strong leftist orientation, including her support for the Maduro regime in Venezuela and the Sandinista government in Nicaragua, and her decision to grant Ecuadorian citizenship to Wikileaks founder Julian Assange, made her a liability for Moreno in his desire to broaden Ecuador’s options in the international community including obtaining technical assistance, possibly pursuing loans from the International Monetary Fund, and building greater security and commercial cooperation with the United States.

Espinosa’s June 2018 election as head of the United Nations General Assembly arguably provided Moreno an opportunity to reluctantly move her out of the Chancellery, replacing her with the less radical, Harvard-educated career diplomat Jose Valencia. Yet while Valencia’s professional credentials and years living in the United States (including time spent working at the Organization of American States) have paved the way for improved relations with the U.S., the new Chancellor previously worked directly under Espinosa and may have been recommended to Moreno by her, suggesting that his ideological orientation is within the domain of acceptability for Moreno’s left-wing support base, even if his professionalism and restraint contrast with some of the more troublesome positions of Espinoza on Venezuela, Nicaragua, and Assange.

With respect to the Economy and Finance Ministry, Moreno’s first appointment, Carlos de la Torre, came under criticism for his management of and accounting for Ecuador’s public debt, which took off under his watch, possibly exceeding the legal debt ceiling. María Elsa Viteri, who briefly replaced him in March 2018, was also forced out when it came to light that an unpaid debt that she had with the National Finance Corporation (CFN) legally prevented her from holding the position (the issue of the debt was and her consequent inability to exercise her official duties was inconveniently publicized while  Viteri was at an important event in New York seeking financing for the country).

Richard Martínez, Ecuador’s new finance minister

In the wake of such problems and embarrassments, Moreno arguably came under considerable pressure from the Ecuadoran business community to appoint a new Economy and Finance Minister who could gain the confidence of the international financial investors and creditors,  and help Ecuador develop new financial options less costly than depending on high interest rate loans from the PRC. In May 2018, he named Ricard Martínez, previously head of the Ecuadoran Chamber of Industry, who seems to fit the bill. The selection was arguably not so much an indication of President Moreno’s commitment to Chicago School finance and monetary policies, so much as an solution for the need of a credible professional at the helm at Economy and Finance who could manage Ecuador’s debt challenges and inspire investor confidence while sustaining or accelerating Ecuador’s modest economic growth.

Supporting this interpretation of Moreno’s orientation in economic policy, his commerce minister, Pablo Campana Saénz, while a businessman, is perhaps more importantly tied both to Ecuador’s traditional business elite and to the Correa administration.  On one hand, Campana is the son-in-law of Ecuadoran business magnate Isabel Noboa, with a role in advancing Correa-era projects such as the Refinery of the Pacific. On the other, he is said to be one of the few commercial elites who politically supported Rafael Correa, achieving significant business success during the Correa administration. Thus, while Campana has expressed views which may seem neoliberal, such as a stated interest in joining the Pacific Alliance, his participation in the Moreno government arguably illustrates the compromise achieved between the Ecuadorian left and its business community, more than an ideological commitment from the Moreno government to neoliberal policies.

Such considerations notwithstanding, however, with the apparent input of Campana, and, to a lesser degree, the newly arrived Minister Martínez, the Moreno government put forth  a modest but promising package of administrative and tax reforms in May 2018. More sweeping changes are reportedly in the works, with one Ecuadoran analyst consulted for this work suggesting that “nothing is off the table.”

With respect to the Defense Ministry, Moreno’s appointment to replace Miguel Carvajal in September 2017 with Patricio Zambrano, a socialist who embraced Venezuelan populist Nicholas Maduro, and who had no prior experience with defense issues, reportedly caused deep unease among Ecuadorian security professionals. The 2018 violence in Ecuador’s northern border area with the Colombian FARC dissident leader “Guacho,” including the kidnapping and murder of Ecuadoran journalists and the ambushes of military units that led to four military and five civilian fatalities in 2018, arguably motivated Moreno to replace Zambrano with a Minister of Defense with greater security sector experience to respond to the threat.

Defense Minister Oswaldo Jarrin

The selection of Oswaldo Jarrin, a career defense professional with 37 years of military experience, who had previously served as Minister of Defense and performed with distinction, was arguably a decision made not to re-align Ecuador’s security policy with the United States, but as with the changes in the Ministries of Foreign Affairs, and Economy and Finance, a bold, proactive change responding to a pressing need and an associated political liability by appointing someone whose credentials were beyond reproach. Even so, Jarrin was not the only candidate seriously considered for the post, with General Paco Moncaya (hero of the Cenepa war with Peru, and former mayor of Quito), and General Fabian Varela reportedly given serious consideration.

The country’s subsequent steps to re-engage militarily with the Inter-American system, and re-examine some options for security cooperation with the United States were thus a logical consequence of Jarrin’s appointment, supported by a military establishment whose leadership and doctrine had never fully been oriented toward Castro-Chavismo.

To read part 2, click here.
___________________

Evan Ellis is the Latin America Research Professor at the U.S. Army War College Strategic Studies Institute. The views expressed in this work are strictly his own. The author would like to thank Fernando Villavicencio, Sebastian Hurtado, Adrian Bonilla, Guido Zambrano, Santiago Mosquera, Fernando Santos Alvite, Maria Belen, Javier Giler, and Lorena Herrera, among others, for their time and insights that contributed to this article.