Written by: Peter LaBelle

On April 10, Ecuador held the second round of its presidential election, which delivered a surprise victory to the conservative former banker Guillermo Lasso over the leftist Andres Arauz. Though Lasso had only narrowly made it into the runoff over another leftist candidate, Arauz may have been harmed at the polls by his connection to former president Rafael Correa, who has been found guilty of corruption in absentia. However, two other factors were critical to Lasso’s victory and will have important implications for his administration: first, the moderation of his conservative stance, which he emphasized during the runoff campaign; and second, a ballot-spoiling campaign by Ecuador’s Indigenous Pachakutik party, which took votes away from Arauz.

Lasso ran on a pro-market platform, promising to eliminate Ecuador’s budget deficit, attract foreign investment in agriculture, and develop free trade agreements with key trading partners like the United States and China. However, Lasso has matched these market-friendly statements by emphasizing the need for environmental protections in the development of oil and mineral resources and greater local control over such projects. These issues have been brought to the fore due to the success of Pachakutik, an Indigenous party, in the first round of the elections. Pachakutik has become a significant political force, winning 43 out of 137 seats in the legislature and almost displacing Lasso from the second round of the presidential election. The Indigenous movement has been closely tied to debates over the use of land and water. Many Indigenous Ecuadoreans, who make up about 8% of the population, feel that corporate extractive mining and oil exploitation projects have damaged their land and brought few benefits to the local population. In February’s election, a resounding 80% of voters in Cuenca, a major southern city, voted on five separate ballot issues to stop new mining projects in the city’s watershed.

In the second round of voting, many Pachakutik supporters appear to have spoiled their ballots rather than voting for either Arauz or Lasso. In total, about 17% of ballots were spoiled, easily enough to have shifted the election in Lasso’s favor. This, along with the fact that Lasso’s center-right CREO party holds only a small minority in Ecuador’s legislature, means that Lasso will be forced to work with left-wing and Indigenous parties to achieve his administration’s goals. 

Lasso has an opportunity to prove to the Ecuadorian people that his liberal economic policies can bring investment and jobs to a country where 7 out of 10 people lack formal employment, and which has been rocked by protest over economic reform in the last couple of  years. Ecuador saw significant economic growth during the commodity boom of the Correa years, but the country also acquired significant debts, including billions to China. However, widespread protests in 2019 resulted in president Lenin Moreno repealing austerity measures that would have raised gas prices.

To fulfill his promise of deficit reduction, Lasso will have to find a politically palatable way to reduce spending and grow the economy. Ecuador’s lucrative natural resources offer myriad opportunities to achieve these goals, if managed appropriately. In addition to mineral and oil reserves, renewable materials, such as balsa wood for wind turbines in China, promise to bring economic benefits to Ecuador, though these will have to be balanced with environmental impacts and concerns over Indigenous welfare. Lasso’s success hinges on his ability to navigate the conflicting desires of opposition parties and lift the country out of the COVID-19 pandemic, which has heated up again in recent weeks.