Conservative banker Guillermo Lasso secured a surprising victory over overwhelming favourite Andrés Arauz in Ecuador’s run-off presidential election, with 52.49% of the votes compared to Arauz’s 47.51%.
In the first round of voting back in February, leftist economist Arauz comfortably beat his closest competitors, Lasso and Indigenous candidate Yaku Pérez, with 32.72% of the votes. In fact, at the time, Lasso and Pérez, who both received just below 20% of the votes, were embroiled in a tight battle for second place, in which the National Electoral Council (CNE) controversially suspended its recount of votes despite Pérez’s allegation of “vote tampering”.
Arauz had secured the valuable support of former President Rafael Correa, who was in power from 2007 to 2017. Despite being sentenced to prison for corruption, Correa remains a highly popular figure in Ecuador for ushering in a period of sustained economic growth. Therefore, Correa’s vote of confidence, as well as the fact that Arauz had anointed himself as a “Correista” by pledging to give $1,000 to one million families, was seen as a sign that the leftist candidate would emerge victorious against Lasso.
Lasso, however, formed part of the anti-Correista camp, which takes a dim view of a leader who was found guilty of violating campaign finance laws. Unlike Arauz, Lasso also favours the austerity measures implemented under the administration of Lenín Moreno and has vowed to adopt a more free and open market. It is believed that Lasso would by and large abide by the terms of the $6.5 billion IMF loan deal, which stipulates the introduction of austerity measures, though he has expressed misgivings about increasing taxes.
He has also outlined a plan to create two million jobs and a universal health care system, increase the minimum wage, lower taxes for small businesses. This vision gained him the support of business elites, social conservatives, and the centre-right. Furthermore, he is also popular among Christians, and his Creating Opportunities (CREO) party teamed up with the Social Christian Party (PSC) in this election.
The former economy minister’s extensive background in the financial industry has generated optimism in the market, with Ecuadorian bonds reaching their highest level since last September.
Arauz, for his part, has conceded defeat and declared, “Thank you all for your support. We honestly believed we were winning, but our projections were wrong. Good luck to Guillermo Lasso, his success will be that of Ecuador. I only ask you to stop the lawfare, which destroys lives and families.”
Lasso’s victory has also generated unease amongst the country’s Indigenous communities, as the new president has stated his interest in expanding the country’s oil sector by increasing crude production. Many of the country’s Indigenous communities live in resource-rich areas in the country’s Amazon, and thus would be disproportionately impacted by the environmental degradation that energy projects bring.
In his victory speech, Lasso further said, “The first action will be to put the economy in order, promote investment and generate employment so that all Ecuadorians do not emigrate, stay in Ecuador and achieve the dreams they want for their families here.”
He also vowed to “humanely” treat Venezuelan immigrants, who have, entered the country in large numbers due to an enduring political, economic, and social crises back home. Further, he said that he will seek to bolster the country’s engagements in multilateral fora, and requested the United Nations’ assistance in dealing with Venezuelan migrants.
The new president’s first objective will be to get the economy back on track. Although the country is somewhat on the path to recovery, after 70% of businesses shut down last year and unemployment hit 68%, the country has been in a sustained period of economic downturn for the past five years due to falling oil prices. In fact, the economy contracted by 7.8% last year. Furthermore, Ecuador has a debt of $59 billion, or 60% of its GDP, with its economy contracting by roughly 9% in 2020.
Lasso won this year’s election following his failed attempts in both 2013 and 2017. However, his close margin of victory illustrates the polarisation in Ecuador. In fact, John Polga-Heicemovich, a professor of comparative politics at the US Naval Academy says, “Many Lasso voters seem to have celebrated the defeat of correismo more than the victory of their candidate. The fact that Arauz placed third in five provinces—behind Lasso and the null vote--also reflects Correa's divided legacy among the ideological left and poor record with the indigenous and the environment.”
Lasso’s power is also further undermined by the fact that his CREO-PSC alliance only holds a combined 31 seats (12 for CREO and 19 for PSC) in the 137-seat National Assembly. In fact, the Union for Hope (UNES) coalition, which put its weight behind Arauz, holds the largest number of seats, with 48. Likewise, Pérez’s Pachakutik commands 27 seats, demonstrating the challenges Lasso will face from socialists and Indigenous communities.
Therefore, despite his surprise victory on his third attempt, newly-elected Ecuadorian President Guillermo Lasso has his work cut out for him.