Tuesday, April 17, 2007

Things to Consider in Coming Weeks

Odds and ends, cats and dogs subjects, loose items to look into or expound on as we move into the Constituent Assembly season:

1) At this point, the three major, traditional parties, PSP, PRIAN, and the PSC are in total disarray, with many, if not most of their lead players (who were mostly Diputados fired by the TSE in March) out of Congress, and out of political action (they can't even vote, at least through the election of members of the CA).

So, what, if anything, are the survivors/leaders of these parties doing right now? I would think that if there's any will to go on in the parties (right; like any cockroach with its head chopped off, a politico still keeps going), that people like Febres Cordero, Cynthia Viteri, Alvaro Noboa, and various PSP cronies are working their asses off to get candidates up from their parties for the CA itself.

2) The Estatuto that was just approved hace dos dias says that members of the CA will be elected on a "proportional basis", drawing members from the 22 Provinces, etc., along the lines I laid out in Sunday's post. What the Estatuto DOESN'T say is how the winners will be chosen from each Province. I'm assuming (thinking like a gringo, here, I'll admit) that members elected would be the top xxx number of vote getters in their Province, e.g., the 14 candidates getting the most votes in Pichincha, for example. That said, this is Ecuador, so it'll be interesting to see what the TSE says about vote counting and winner identification methods in the coming weeks.

3) A Commission of.... nine, I believe, retired Constitutional jurists have been at work over the last three/four weeks, preparing a draft document, a draft Constitution, actually, for the CA's initial consideration when it opens up shop later this year. The draft document uses the current Constitution as a point of departure, while, as I understand it, taking into account suggestions submitted by citizens' groups, ngo's, and individuals, intended to "improve things". I use quotes around that last phrase, because Lord knows what kind of suggestions are flooding into the drafting Commission's in box.

Reading and listening to interviews with some members of the Commission, I get the sense that they're leaving basic freedoms of speech and assembly, right to private property, political activity, and so on, alone, and sancrosanct, as well as the concept of governmental checks and balances and independent branches (lots of sensitivity to the Venezuelan model, which no longer has independent branchs of legislature and judiciary; all report to Chavez one way or another).

4) Subjects that will be hot button items for the CA:

--- Authorities/methods for naming heads of control insitutions in this country, including the Controller General's Office (kind of a combo GAO/Inspector General for the GOE), the Fiscal General (sometimes known as the Public Ministry; this is role analogous to that of the U.S. Solicitor, but not/not the Attorney General, who's known as the Procurador General here), and the Superintendencies of Banks and Insurance (Entities) and Companies, which regulate activities of these business entities. Correa is big proponent of changing this to take influence on this away from political parties. Trade off, of course, is if not the parties, then who? (Hint: His initials are Rafael Correa!)

--- Determination of the roles of the Central Bank of Ecuador (BCE), indeed, deciding whether there'll be a BCE at all. (NB: The attractive thing - to me, anyway - about the BCE is that it's an independent, repeat, independent monitor/reporting source on economic trends in country, which is problematic for any politico, especially Correa, who's intent on proving that his/his economic model is the right one for Ecuador).

--- Doing away with political party of control of the Supreme Court (analogous to the U.S. Federal Courts of Appeal), the Constitutional Tribunal (as its name implies...), and ironically, the Supreme Electoral Tribunal which effectively trashed the Congress last month. Correa's big leader on this theme.

--- Development of a more representative Congress. At present, there's a beautiful system for the traditional political parties, whereby Diputados are elected on a slate, at-large basis, ensuring continued control of the most populous Provinces. The same system precludes personal responsibility of the Diputados to any part of their Province, because all 18 Diputados in Guayas, for example represent the ENTIRE Province since there are no Congressional districts. A lot of people, including, notably, Correa, want to correct this, but in setting up districts, you're pulled into the question of population balance between the Provinces which could bring Ecuador back to a bicameral legislature, which I understand existed years ago.

--- Neoliberal economics vs. regulated economies - or maybe it won't be a "versus" question, so much as a mixed arrangement. Correa and team are true 70's statist die-hards who want to bring back directed credit, planned economies, super strong labor unions, and etc... The argument is that open market economies (Washington consensus, neolibs, etc.) have produced only lackluster growth in Latin America over the last 15-20 years and therefore, to listen to Correa, this should all be done away with to make way for state oversight of the private sector. Right. Well, again, we'll see what happens here. BTW, Correa was clear Sunday night that he won't tumbar/reversar dollarization; hope not, because he'll bring the place down tout suite if he does...

--- On this same subject (economics), Correa's put his finger on one, hot item with which resonates with a lot of people, including me, and that's the subject of exorbitant interest rates, fees, and commissions charged by the small and successful banking community here. Despite protests from donors, international groups like the IMF and the WB, not to mention the poor folks trapped in the capital markets here banks have held stubbornly to their oligopolistic practices and just taken borrowers to the cleaners.... Anyway, Correa has singled out the bankers for special opprobrium, calling them thieves, rats, and well, not very nice guys. The banking community was taken by surprise by all this because they'd operated pretty much with impunity for years; not any more

5) Regional (read, Venezuela) alliances: Not where will this go, but how far?

6) Before I forget it: Way too many comentaristas are equating the big majority vote in favor of a CA with Correa, saying that it's enhanced his political standing/power, and so on.

Yeah, well, some of that dynamic applies, for sure, but my own feeling is that there's way too much tendency to make this whole reform process into a power building exercise for Correa. Look, I don't have any illusions about this guy: I've said before that I view him as a hot-tempered, imperious sort with a strong streak of messianic righteousness. If he thought he could get away with pulling a "Chavez" on Ecuador, he'd do it. Thing is, Ecuador is way different from Venezuela (maybe I'll do comparative analysis piece on this in separate posting later) and people, as I've said in other posts, are watching Correa very closely for any moves that he might try to make in that (the Chavez) direction.....

What people really want is more honest, transparent, egalitarian and representative government, and a government that produces in terms administration of honest and fair justice, administration of public services especially health and education, and they're hoping that the CA process - with Correa's leadership, if he does it right - will bring these things about.

But not at the expense of a one party, totalitarian system which is what Chavez is well on his way to achieving up there.

.... Which reminds me of another subject meriting in-depth treatment later on:

7) What will happen with or to, the political party landscape in the coming months/couple of years? I've alluded to the traditional big guys being in disarray in the run up to the CA, but haven't mentioned the fact that the non-fired politicos/parties, including the PRE (what kind of relationship have Correa and that corrupt, dangerous crazy Abdullah Bucaram, cooked up?), the RED-ID, the Socialists and MPD, some elements of the UDC, and Patchakutik plus some turncoats from the trads (calling themselves the "Bloque de Dignidad") are milling around without benefit of an operating Congress.

..... And this doesn't mention the existence of a parallel Congress made up of the fired 57 Diputados, plus the Alianza Pais (BTW, separate research question: Who financed Correa during the Presidential campaign, and who's been financing AP activities during the Consulta Popular, and even more importantly, from now on out?)

All this said (item 7) the basic question is, how will this all shake out and specifically, which parties will win and which will lose, and what price will the winners pay to win?

Anyway, some preliminary things to consider/research/discuss in the coming weeks... Whew, just doing the list is wearing.. More later, with the hope that the citizenry of this country are ultimately wiser than the political Wiseguys....

Sunday, April 15, 2007

On to the Constituent Assembly

Well, initial results are in, per exit polls as reported by El Comercio, and it's 78.1% yes, with the balance no, about 11% and nulos, the rest. El Comercio and EFE quote Correa as saying that he, "discards foreign models (of one man rule), and that he will maintain a dollarized economy during his four years in office". A separate article in El Comercio quotes Correa as saying but that he will, "superar el nefasto (economic) modelo neoliberal".

Well. We'll see, I guess.

In separate news items yesterday, and a blog today, I note that there has been a $221 million decline in cash in banks (M1) in the first quarter of 2007, and employment has gone down from 48.04% to 44.8% since January, with attendant rises in unemployment from 9.03 to 10.28%, and underemployment from 42.07 to 45.31%. All figures are quoted from the Central Bank of Ecuador (BCE) which is the best tracker of such figures here, and an entity that Correa has said he wants to do away with, criticizing the BCE as a "unnecessary, bloated, bureaucracy". You bet, especially when that bureaucracy comes out with numbers critical of, I guess, a non-neoliberal economic model.

OK, returning to the CA for the moment, the next steps are:

1) The Supreme Electoral Tribunal has eight days to make the definitive results of the Consulta Popular public.

2) As soon as the results are formally published, the TSE will announce the convocation of the CA itself, which signals the start of a 45 day period (those are working days, I believe; the Estatuto doesn't say) during which would-be Asemblistas announce their candidacy and gather signatures equivalent to 1% of the votes cast in last year's Congressional/Presidential elections in the CA candidates' provinces. At the end of this period, the TSE will take 10 more days to validate the signatures of putative candidates, and when the TSE is done, the formal campaign period (another 45 days) starts up.

(It's probably worthwhile to note here, how the CA's supposed to set up:

-- There are to be 130 Asemblistas. One hundred of them will be elected from the country's 22 provinces according to the Congressional breakdown now used. That means for example, that 18 of the Asemblistas will come from Guayas, and 14 will come from Pichincha, the two most populous provinces in the country, and so on. Another 24 Asemblistas would be elected as at-large, national candidates, i.e., coming from anywhere in the country (there'll be separate slate for these guys, obviously), and the last six Asemblistas will represent overseas Ecuadorians, with two reps coming from Europe, North America, and South America, respectively. Any native born Ecuadorian, 20 years and older, can be an Asemblista.)

3) Elections for Asemblistas will be held at the end of the 45 day campaign period, and 10 days after that, the CA will be installed. The CA itself will have a life of 180 days, with an option to extend its ops for another 60 days.

4) After the CA wraps up its deliberations, the hope is that it will present the country with a revised Constitution, revised governance framework, etc., all of which will be submitted to another Consulta Popular Nacional. My guess is that by the time all of the foregoing happens, the next Consulta Popular to approve the CA's work will take place somewhere between March and June of 2008, depending on how smoothly things go - and depending on whether I'm right about working versus calendar days in my estimates.

Ahora, adding up convocation period, inscription period, campaign time, time to get the CA up and running and then 180-240 days for the CA work itself, that's.... around a year for all of this, and that's a lot of time for people here (and particularly investors, big and small, Ecuadorian and foreign) to watch how Correa y cia do.

As noted earlier, it appears that some people have made the decision to get their money out of the country now, but I'd guess that that's the big boys' money. The vast majority of people here are middle and lower class, and most of them don't/won't have the luxury/option of taking their money of the country; they need their funds to pay bills, mortgages, orwhatever, so they're going to have to sit here and pray that political events in the coming months don't adversely affect the economy.

I sure hope that the initial cash flow and employment figures I mention above don't portend continued negative or worsening trends in the coming months. Correa's the kind of guy who, if confronted with private decisions to move capital and etc., is quite capable of doing something crazy like calling bank holidays, freezing funds, or whatever, which would obviously only exacerbate the situation.

His statements about the banks, the BCE, the use of directed credit and so on have already made people nervous (what DID this guy learn at the University of Illinois, anyway?) and now he really, really needs to calm people down, lead and unite the country and not divide it or alarm it any more than it is now.

I can only hope that he or his supporters contain themselves and refrain from further attacks/accusations against business leaders, the media and opponents that might divide/frighten this country even more.

I hope, I hope that's not a forlorn hope.....

Saturday, April 14, 2007

Voting "Si", with Fingers Crossed

I've been reading a ton of Ecuadorian blogs, all of which are focussed on the Consulta Popular scheduled for tomorrow. In California, we call this process a referendum, and the Estatuto Popular itself, we'd call an Initiative.

Tomorrow's CP poses the simple question: Do you agree or disagree that a Constitutional Assembly should be convened with plenipotentiary powers, to change the institutional framework of the State and develop a new Constitution?

The CP itself and the question itself are the work of Rafael Correa and his government, that is, they are the proximate origin of this initiative. Correa had pledged the CP and made it the centerpiece of his electoral campaign this past year, and he has kept his promise to make the CP happen.

I say that RC and cia are the proximate cause of the CP because they've engineered the process, but in fairness to them, they've gotten this far because they are an accurate expression of the frustration that most Ecuadorians feel regarding the state of political institutions and affairs in this country, no matter your place on the political spectrum. People here are totally fed up with political and economic (e.g., non-payment of taxes) corruption, non-representative power politics, party control of the justice system, and incompetent governments who fail to provide decent social services, particularly in the areas of health and education.

That frustration and the attendant public yearning for change and improvement notwithstanding (I'll define improvement in a bit), a large number of people here - and I'll go out on a limb and say the majority - are wary of Correa and the degree of change he might bring to the country. Specifically, folks here are well aware of what's happened in Venezuela and the fact that Chavez took advantage of similar frustrations over corrupt politics as usual, and has taken control of the country for who knows how many years, all with the blessing of the electorate there.

It gets down to the old saying of "moderation in all things": People want improvement defined as tax, justice, health and education systems that work well and honestly (and jobs too, but that's another story), but the most Ecuadorians sense that you don't want to give your freedoms and liberties away to a dictator in exchange for the aforesaid improvements.

Venezuelans appear to have done just that - voted for modest improvements in social services in exchange for a soon-to-be one party system of government which wants to stay in power for the next 20-25 years. That same government is working hard now to marginalize, reduce, or outright eliminate (depends on what sector of the economy and polity you're talking about) private initiative and/or anti-government sentiment in Venezuela.

I don't think Ecuadorians want the Venezuelan arrangement, much less a Chavez wannabe, but they do want, as I say, improvement in the overall scheme of things here.

And that's the dilemma: How do you bring about change for the better in Ecuador, right now, with someone like Correa in power without running the risk of selling your electoral soul to a would be dictator?

Correa and his initiative hold out the possibilty of changes for the better and in fairness to him, he's expressed some good ideas regarding improvements in tax administration, administration of justice, health and education systems, as well as opening up the incestuous and usurious banking system.

At the same time, though, his statements regarding the media, political parties in general, anyone/anyone who disagrees with him ("corrupt oligarchs", "defenders of vested interests", etc.) portray a righteous, messianic certitude really reminiscent of Castro and Chavez. Along with this, there have been violent, physical attacks on opponents of the traditional parties, carried out by adherents of left wing groups. Not surprisingly, Correa has denied and condemned such attacks but since the police never moved to prevent those attacks (moving instead only to prevent political opponents from entering Congress, claiming they were merely enforcing electoral law; see earlier postings on this), many look askance at Correa's statements.

All of the above has been mooted about for weeks in the local media which has big reader/viewership, so this dilemma, as I put it, has not been lost on the general public, I'd guess.

Oddly enough, though, that same general public still seems largely unaware of the language of the Estatuto/initiative to be voted upon tomorrow, even though the Estatuto was published in virtually every newspaper in the country last Sunday. Human nature being what it is (I'm a big procrastinator myself), people will wait until the last minute to read up on what they're supposed to vote for, or maybe not read the damn thing at all.

I have read the document myself two times myself, though, and after reading it (and assuming I could vote here, which I can't), I'd vote Si on it. I'd vote Si for two simple reasons: 1) The initiative represents a chance to improve things here, as mentioned above; and 2) Article 23 of the Estatuto says that the work coming out of the Constitutional Assembly, everything, must be submitted to the electorate for approval in another Consulta Popular which would take place early next year (my timing estimate). Those two things, a chance for improvement, and a popular check on Correa and anything he might try to pull incline me to Si.

Well, we'll see what happens tomorrow. I see that Correa goes to visit Chavez Monday, which I'm sure is just a coincidence of timing, but it sure doesn't strengthen my trust in this guy; we're gonna have to watch him like a hawk. Fingers crossed as I say.....