Ecuador, under the leadership of charismatic ex-president Rafael Correa, invested in new roads, hospitals, schools and social programs. Ecuador's vast oil and mineral wealth played a pivotal role in this infrastructure bonanza. When oil prices crashed in 2008, Correa borrowed heavily to maintain momentum, and the country is paying the price today in oil and mineral concessions to the lender nations, specifically China, to whom it owes billions. In early 2018 new president Lenin Moreno replaced the government's finance minister – twice.
The 'Citizens Revolution' is how President Correa describes the big changes that have swept across Ecuador, and despite the hyperbole, it's hard to deny the enormous gains many citizens have made during Correa's administration. Since first taking office in 2007, the poverty rate has fallen dramatically (from 45% in 2006 to 25% by 2014) as has unemployment (to below 5%), while wages have risen and inflation has been tamed. Annual growth in GDP has churned along at a steady 4%. Correa's administration nearly doubled government spending on public investment (from 21% in 2006 to over 40% by 2014), pouring money into healthcare and education. The result: infant mortality rates are down, and with the building of new schools and universities, more students have access to education.
Big infrastructure projects have sprung up across the nation, including new hydroelectric dams, brand new highways and bridges, and the opening of Quito's new Mariscal Sucre airport. Other projects underway or complete, include a 23km metro system in the capital (with an estimated cost of around $1.6 billion) and an expanded airport for Guayaquil. One of the country's most ambitious projects is the creation of Yachay, a sprawling university and research campus under construction in the northern province of Imbabura. Described as 'a city of knowledge' ('yachay' means 'knowledge' in Kichwa), this site is about the size of Atlantic City and is intended to be a major hub for science, technology and innovation – perhaps the next Silicon Valley if things pan out as planned. Critics have said that Yachay is only educating a small elite, however.
Given all this, it's not surprising that Correa enjoyed widespread popularity during his first term. He was one of the most popular leaders in Latin America, and probably the most popular president in the nation's history. However, his attacks on the press and the environment in his second term diminished his reputation, as did a running media battle with his successor, Lenin Moreno. After leaving office in 2017, Correa moved to Europe with his Belgian-born wife. He was indicted by the Ecuadorian congress in June 2018 for his alleged role in the kidnapping of his political enemy Fernando Balda in 2012. Some say he may seek political asylum in Belgium if things continue to turn against him.
What’s fueling this growth in public spending? It’s the worldwide thirst for oil and high crude prices on the world market. Ecuador is particularly well endowed when it comes to petroleum; it’s home to the third-largest oil reserves in South America (after Venezuela and Brazil), accounting for more than 30% of government revenue and half of all export earnings.
Until Correa, much of the wealth from Ecuador’s reserves flowed out of the country. A new law in 2010 changed the terms of contracts with multinational corporations and increased the government’s share of gross oil revenues from 13% to 87%, boosting annual state revenues by well over $800 million.
While oil has undoubtedly lined the nation's coffers, it has also brought greater threats to Ecuador's ecology. Parque Nacional Yasuní, a pristine area of the Amazon, holds one of Ecuador's largest reserves – thought to contain 846 million barrels (worth an estimated $7 billion). It also contains some of the greatest biodiversity on the planet, and is home to isolated indigenous groups. Attempts by environmental groups to hold a referendum on oil exploitation in the park were rejected by the government, and in late 2014, the environment minister announced that drilling permits had been signed and indeed, the state oil company Petroamazonas began drilling in this UNESCO World Heritage Site in early 2016. The building of access roads and pipelines – not to mention the possibility of oil spills – could be devastating for Yasuní.
Three indigenous leaders of the Shuar tribe have been killed in the struggle for sovereignty over the Amazon's resources.
In late 2017, the Moreno government tried to renegotiate the terms of oil contracts with China, which had extended billions in loans to Ecuador. Ecuador now seeks higher prices for its crude than originally specified in the contracts, which run through 2024.
Given such controversy, Correa amassed some enemies over the years. His opponents characterize him as a semi-authoritarian ruler who has undermined democracy by expanding presidential power, weakening the independence of the courts and antagonizing those who disagree with him. Organizations such as Human Rights Watch have also cited the sweeping powers enacted to silence his perceived enemies. In 2013, the environment minister dissolved the Pachamama foundation (an environmental and human rights NGO), alleging that members of its group had taken part in violent demonstrations. In the same year, Correa's supporters passed a communications law that mandates criminal charges if regulators deem journalists not to be reporting news in a fair and balanced way.
In his second term, Correa also became more pointed in his attacks on the popular press. For example, political cartoonist Xavier Bonilla’s newspaper El Universario was fined $93,000 for a drawing which hinted at corruption. Correa had also taken action against the same newspaper in 2012, winning a $43 million case in which he eventually pardoned the journalists involved. Ironically, at the same time, Ecuador’s London embassy provided shelter to WikiLeaks founder Julian Assange (since 2012, Assange has been an increasingly unwelcome guest in the embassy, and Ecuador is trying to extract itself from the situation).
In 2014, the Committee to Protect Journalists (CPJ) said that only Cuba had a worse record in the western hemisphere of muzzling its own press. Since the 2013 communications law went into effect, the government has sued its own media more than 400 times, and some journalists left the country to continue their careers. It has been hinted that Lenin Moreno may relax these laws.
And in late 2014, Ecuador's Constitutional Court deliberated on a proposition put forth by Correa's party Alianza País that would have removed term limits for all elected officials. This did not pass, however, and Correa's former vice president, Lenin Moreno, was elected in a runoff election in early 2017. In early 2018, the nation's voters rejected a referendum which would have allowed presidents to serve more than two terms, negating Correa's possible return.