Take physic, pomp

Ecuador’s Presidential election (from IKN608)

We’ve been following the Ecuador election campaign fairly closely in the Weekly these last few weeks, including this in IKN608 dated January 17th, which handicapped the main contenders and gave an overview of their position on key issues, most prominently mining. Here’s the final section of the note that day, the only thing I’d change with just five days to go for the vote is to raise Arauz’s chances of a round one win to “possible”.


Unless there’s a seismic shift among the 31% of undecided voters in the next three weeks, we are heading for a run-off between Andrés Arauz (the Rafael Correa dauphin) and Guillermo Lasso (third time of running for this right wing candidate). Thoughts on all three, then the future scenarios;

  • Guillermo Lasso has been losing some ground as late, with his “Panama Papers” connection unsurprisingly coming back into the debate (a long story but he has been directly connected to almost 50 offshore companies, most domiciled in the Cayman Islands, through which he built and profited from his Miami business empire, in sum it’s one of those “corrupt normal” ways of doing business in LatAm that was uncovered during the heat of the Panama Papers scandal and now makes him look bad (justifiably or otherwise)).
  • Andrés Arauz has been trying hard not to upset anyone, which is probably why he’s been rising in the polls. Extremely carefully managed, his popularity rating isn’t good but it’s less worse than the others (60% of the population hate Arauz, 70% for the other two) and will now likely see him take most votes in round one.
  • Yaku Pérez has been running a good campaign and has managed to keep the Pachakutik political alliance onside and without too many visible cracks, as even though some of the Pachakutik top table are nothing sort of Marxists he’s managed to bring the party financial proposals into the world of reality. He’s never going to avoid accusations of Lefty/Commie/etc (the haircut is enough) but his economics and fiscal proposals aren’t radical left For example, he’s a strong proponent of keeping the US Dollar as country currency and has clear and (must be said) popular opinions on exactly how Ecuador should re-negotiate its debt with the IMF. Businesses are welcome and his only stipulation is that “our government’s green policies require funding, so pay your taxes”. Also, the details in that recent poll show he has strong hard vote among (particularly in his home region of Cuenca, where he has been the main driving force of the anti-mining referenda) which all adds up to the likely result of kingmaker being confirmed and a new force to be reckoned with in Ecuador national level politics.

Regarding the likely ballotage election, polls assuming Arauz vs. Lasso puts the run-off at “too close to call” and suddenly Yaku Pérez is no longer a theoretical kingmaker but a real one. There’s no way he’d endorse Lasso (we know that) and he’s a staunch enemy of Rafael Correa, but not for nothing has the Arauz campaign been more than happy to comply with the Ecuador electoral body (CNE) rulings and remove all trace of Correa from their advertising and electoral campaign materials. The pliable Arauz and the “green pragmatic” Pérez are less apart than at the beginning of this process and while Rafa’s man may have enough in a tight race without the extra endorsement, we can be quite sure he’ll want it.

The bottom line: It’s up for grabs in Ecuador between Arauz and Lasso, with polls now slightly favouring Arauz in round one. The two big incognitos are 1) the 30% of Ecuador voters who have not decided and 2) LatAm’s notable recent left shift, something most polls have not picked up on before an election day. We’ve seen Argentina and Bolivia do it, if it happens here Arauz will be next President. However Guillermo Lasso is confident of his win despite his general unpopularity, he expects Ecuador will decide he is the least worst in the run-off. Finally, Yaku Pérez not only has the near-certain win in his Cuenca anti-mining referendum, but also the potential to gain tangible political leverage for his party. As for how this affects Ecuador and mining, any time Yaku Pérez approaches any lever of power is bad news. Andrés Arauz is almost certainly fudging his position because he wants a growing mining sector under his eventual government and is too chicken to say it out loud. The best result for the sector will be a Lasso win, while the style of an Arauz win may be as important as the substance. Finally, for those of you versed in Spanish here’s excellent source material on the position of the main 2021 Presidential candidates on mining (14) except the Arauz campaign, who said he would reply and didn’t after multiple prompts. Telling.

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