Ecuador's Oil-Focused President Wins Another Term in Office

"What's that? They announced it?" Ecuador's President Rafael Correa, facing no serious challengers, won nearly 60 percent of the vote. (Image credit: AFP/Getty Images via @daylife)

On February 17, 2013 Rafael Correa, an ally of Venezuela?s Hugo Chavez and amigo to Iran and China, won another term in office in Ecuador. Correa, a politically savvy and pragmatic president who is prone to occasional rhetorical flourishes when discussing the United States, won nearly 60 percent of the vote.

Correa now has four more years to consolidate his control of the country?s government and exert influence over the electoral system, the judiciary, and the press. He will also work to maximize the growth of Ecuador?s export-fuelled, dollarized economy. Although his social programs have won acclaim, Correa has faced serious criticism for his judicial attacks against critics.

Correa has focused on consolidating his power as he continues to undermine Ecuador?s independent press and exacting control over the judiciary. In his new term in office, he will continue to make it nearly impossible for his political opponents to interfere with his policy agenda.

One of the major sources of Correa?s success is also a major source of his government?s revenues: the state-owned oil company Petroecuador.

A report from Revenue Watch Institute explains that ?The main source of Ecuador?s oil revenue comes from oil exports, comprised of Petroecuador?s own production and royalties.?

As long as oil prices remain high and international banks continue to supply loans and grants for oil sector development, Petroecuador and Correa will continue to work together to finance the country?s government and its ambitious agenda of social programs. Over the next four years, investors can expect Correa to maintain economic and political stability and help Petroecuador expand its operations.

William Lee, a political analyst from the Economist Intelligence Unit told me that for Ecuador, ?the obvious major risk is an oil price crash.? But, as long as oil prices remain relatively high and stable, Correa will continue to consolidate his power and win votes by financing pro-poor policies. (See here for an article I wrote about Correa consolidating his political power ahead of the election.)

Correa led by a wide margin heading into the election and focused on making sure that his party won a majority in the legislature. His new term is the last allowed under the Constitution he pushed through in 2008. But, with a firm grip on all branches of Ecuador?s government and a heavy foot on the country?s independent media, Correa is not likely to face serious challenges if he seeks to modify the constitution and seek another term.

Before the election, one resident of the country?s capital told a reporter, ?The bad thing about him is his arrogance and that he insults all his opponents, and if he wins in the first round he will think he?s better than everyone else, and he will be even worse.?

After lodging his own vote, before the results were tallied, Correa announced, ?Here there?s only one winner, and that?s Ecuador. The beautiful thing about an electoral democracy is that the citizens have the future in their hands.? ?

Ecuador?s citizens will have at least four more years to watch Correa?s moves as president.

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Source: http://www.forbes.com/sites/nathanielparishflannery/2013/02/17/ecuadors-oil-focused-president-wins-another-term-in-office/

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