The left-wing candidate Lenin Moreno recently celebrated victory in Ecuador’s presidential election, beating rival Guillermo Lasso and bucking the right’s resurgent trend in South America and giving a major boost to the left in the region. He ran on the basis of promising to protect the social gains of the progressive government there in the last decade and to govern “above all for the poor.”
Lasso, a wealthy banker, stood on a platform of tax cuts for the wealthy, a greater role for the private sector in education and health and financial deregulation.
In contrast, Moreno ran his campaign on the promise of creating 200,000 new jobs, guaranteeing access to higher education, improving older people’s quality of life and building hundreds of thousands of houses to bring dignity to the poorest people without a home.
Moreno is paraplegic after being shot in a robbery in 1998. He served as vice-president during Correa’s first term in 2007-13 before becoming UN special envoy on disability.
As vice-president, he launched an innovative national job placement programme, targeting the institutionalised discrimination and social isolation which keeps many disabled people in poverty.
Lenin’s victory continues a process started when ten years ago President Rafael Correa was elected President in Ecuador. Since then, there’s been a tremendous shift in the country. He remained enormously popular throughout his time in office.
The achievements of this change are quite remarkable.
It is incredible to think that in Ecuador’s process of progressive change (known as the citizens’ revolution) – at a time when we are constantly told about the inevitability of cuts and austerity – spending in Ecuador on healthcare and education has doubled.
Upon Correa’s election the rich were forced to pay their taxes for the first time in the country’s history, and as a result government investment initially helped achieve economic growth of 4 per cent year by year. Even with extraordinarily low oil prices, the strong dollar and the devastation of a huge earthquake in April 2016, which pushed the country into recession, the government maintained funding for public services. Crucially, the Ecuadorean government chose to protect those most in need and to continue investing in the economy which is now once again growing again.
As Correa leaves office this year, for the first time in Ecuador’s history, extreme poverty is in single figures at less than 8 per cent, down from 16.5 per cent. Ecuador also has one of the lowest unemployment rates in the continent. Yet prior to 2006 Ecuador was a very unstable country, perhaps one of the most unstable in the region throughout the 1990s and 2000s.
It had seven presidents in 10 years, accompanied by a series of aggressive neoliberal economic packages, with a resulting sharp increase in inequality. This was most clearly illustrated in a major banking crisis in 1999, when as a direct consequence of deregulation about half of the banking system went bust overnight. People’s economic assets were frozen and many never had their assets returned. Indeed, in this period of neoliberal crisis in Ecuador, life got so bad that almost two million people left the country during the period of crisis, out of a population of 13.5m.
So how has such a dramatic change in the situation facing the country arrived, and what can we learn from it? The key point to note is that in contrast to the disastrous neoliberal packages much of the world has seen in recent years, there has also been a strong emphasis on public investment.
In 2006 public investment was little more than 4.2 per cent of GDP. Under Correa it has got close to 16 per cent. This has been a contributor of both growth and redistribution, and interestingly, has not crowded out (but instead complimented) private sector investment. A particularly progressive policy that should receive attention from all progressives internationally has been not allowing companies to pay out dividends on shares until they have paid their workers the living wage.
A similar innovative policy lead is also being taken now by Ecuador on tax havens, a policy confirmed on February 19 when it became the first country in the world to hold a national referendum about tax havens.
The people of Ecuador were asked: ‘Do you agree that, for those holding a popularly elected office or for public servants, there should be a prohibition on holding assets or capital, of any nature, in tax havens?’ Now this has been passed, politicians and public servants will have a year from the referendum date to repatriate their money or go!
This is a big issue for Ecuador, some $30 billion dollars, a sum equivalent to one third of Ecuador’s GDP, is in tax havens – equivalent to $2,000 for every Ecuadorian citizen.
This is certainly an issue on which we need global action – Oxfam calculates the sum hidden by wealthy individuals in tax havens across the world as 7.6 trillion US dollars, a figure not including the activity in this area of multinational corporations.
In short, Ecuador has shown what can be achieved with the political will to put people first by pursuing an agenda that prioritises investment over cuts.
So in terms of policy areas such as how we advance economic justice and social inclusion, and the need for real action not just rhetoric on tax havens, we can learn a lot from Ecuador. But most of all it shows that you can stay true to socialist principles and still be successful, both to win elections and in building a better, fairer society when in government.
- Celebrate and learn more at the event “VIVA Lenin Moreno: Celebrate social progress in Ecuador & Latin America” on Thursday April 27, an opportunity to hear a first-hand account of the election from Ecuadorian activist Alejandro Valverde and celebrate with speakers from Nicaragua, Bolivia and Venezuela. It takes place from 6.30-8pm at Unite the Union, 128 Theobalds Road, London, WC1X 8TN. Please register at http://bit.ly/vivaleninmoreno