The following article by Matt Willgress was originally published by the Morning Star. It sets out some of Correa’s achievements since he was first elected President, including poverty reduction, low unemployment and an economy growing at four per cent a year – all underpinned by a huge increase in state investment, whose proportion of GDP has trebled in eight years.
Eight years ago President Rafael Correa was elected in Ecuador and, as in many Latin American countries in recent years, there’s been a tremendous shift in the country.
Today, at a time when we are constantly told about the inevitability of cuts and austerity, spending in Ecuador on healthcare and education has doubled.
On 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 has led to economic growth of 4 per cent year by year.
Additionally, for the first time in Ecuador’s history, extreme poverty is in single figures.
It is now less than 8 per cent, compared with 16.5 per cent previously.
Ecuador also has one of the lowest unemployment rates in the continent, with the figures for 2014 closing at only 3.8 per cent.
It is also a popular, democratic process of change. Correa has won his last two elections in the first round, winning the most recent vote by some 30 points. One hundred out of 136 parliamentarians are also with the governing alliance.
Yet prior to Correa’s election — as part what has been termed the “pink tide” in Latin America — 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?
Speaking at a packed meeting organised last week by Friends of Ecuador to analyse this democratic and social transformation of Ecuador, Minister Guillaume Long said that this process is best explained as “a recuperation of sovereignty … both in terms of international relations and also sovereignty in the domestic sphere.”
Long said that when Correa came along, “Ecuadorians voted for an anti-neoliberal proposal,” but that, unlike previously, “this time they were not betrayed.”
He said that prior to Correa’s election “the central government was so weak that regional strongmen were a lot more powerful than government itself,” but that this “was put straight by a constituent assembly that was elected and whose mission it was to draft a new constitution, a new social contract for the country,” to enable the state to put people first.
This was a process that Ecuadorians were highly involved in, with the new constitution ratified in a referendum with 67 per cent in favour, meaning that in Ecuador for the first time we have seen the “universal treatment of everyone as a citizen.”
Expanding on this theme, Long explained that “the name ‘citizen’s revolution’ has a lot to do with getting rid of private vested interests from the public sphere … so whereas once you had corporate regulation of public policy, for example bankers regulated banking, now the state regulates.”
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. In 2013 it was 15.5 per cent and now is close to 16 per cent.
Long explained that “this is huge (and) has been the real engine of growth and an engine of redistribution,” adding that “contrary to neoliberal dogma there has not been a crowding-out of private investment.”
Other policies that could be applied internationally include not allowing companies to pay out dividends on shares until they have paid their workers the living wage and a recuperation of territorial sovereignty by removing the US base from the port city of Manta.
Introducing the Friends of Ecuador event, former mayor of London Ken Livingstone argued: “As we look at the examples of countries such as Venezuela and Ecuador it’s a clear sign that those nations can break free from the very strong American grip” and that “Ecuador has struggled to ensure that its people are the beneficiaries of its mineral wealth.”
Livingstone also noted that there are still “people in Washington that would like to see corporate power’s priorities put at the forefront.”
This is undoubtedly the case — not only does Ecuador’s social change deserve our solidarity but we should also seek to learn the many lessons of it’s citizen’s revolution.
Matt Willgress writes a regular column for the Morning Star on Latin America.
This article originally appeared here in the Morning Star.