Political Structure

Ecuador has been a presidential democracy since 1979, but its institutions are fragile. Economic deterioration in the past decade has contributed to increased political instability. Lucio Gutierrez, who is backed by left-wing and indigenous organisations, was inaugurated as president on January 15th 2003, taking over from the outgoing Gustavo Noboa.

The country has a fragmented and polarised political system with numerous parties. Constitutional reform in 1998 abolished mid-term congressional elections and deprived the legislature of the power to impeach cabinet members, but more reform is needed to improve governability. The undisciplined and opportunistic nature of Congress will remain a threat to economic reform.

1. The executive

Lucio Gutierrez handily won Ecuador's presidential runoff on November 24th. Running on a platform that promised a crusade against corruption and more attention to the needs of the poor, he is another in a string of "outsiders" who has gained political prominence in Latin American elections. The president, elected for a four-year term, appoints the cabinet and provincial governors. Mr Gutierrez took over in January 2003 from Gustavo Noboa, who assumed the presidency when Jamil Mahuad was ousted in a coup (led by Mr Gutierrez) in January 2000.

OVERVIEW

Following the break-up of the ruling coalition, the Partido Sociedad Patriotica 21 de Enero (PSP, the party of the president, Lucio Gutierrez), will have to construct pragmatic alliances with the main parties in Congress, which mostly distrust Mr Gutierrez. The government is under pressure to pass reforms to which it has committed under the IMF stand-by agreement that was signed in March, or risk the suspension of the accord. The government will target overall non-financial public-sector surpluses in 2003-04. Growth will be modest in 2003, before higher oil output in 2004 leads to slightly stronger expansion of overall GDP. Additional government revenue from a new oil pipeline will be used primarily for buying back external debt. Inflation will fall gradually, with a possibility of deflation in some tradeable sectors. The current-account balance will stay in deficit, but will be funded largely by foreign direct investment in the oil industry.

Key changes from last month
Political outlook

Mr Gutierrez has dismissed the indigenous party, the Movimiento Unidad Plurinacional Pachakutik-Nuevo Pais (MUPP-PP, or Pachakutik) from his government after months of escalating tensions. He will seek a new alliance, probably with the conservative party, the Partido Social Cristiano (PSC). One of the alliance's immediate aims may be to re-establish political control over the Supreme Court, rather than speed the passage of economic reforms.

2. National legislature

Unicameral Chamber of Representatives (Congress). 100 members are elected provincially by proportional representation, from open slates and for a four-year period, at the same time as the first round of the presidential election. Voting is compulsory for all citizens between the ages of 18 and 65 and optional for illiterates and persons over 65.

Composition of Congress 2003

3. Legal system

Congress selected a new Supreme Court with life tenure in October 1997 from nomination lists presented by electoral colleges and civic groups. The 32-member Supreme Court renews its membership with judges of its own choosing. The Court appoints a new Chief Justice every two years, and last did so in January 2002. Constitutional review powers are in the hands of a different court: the Supreme Constitutional Court, whose nine members are appointed by Congress and represent political parties according to their weight in the legislature.

4. National elections

General elections were held on October 20th 2002 and a second round was held on November 24th. The next presidential and congressional elections are due to take place on October 15th 2006. Provincial governors, directly elected provincial representatives and local councillors will be elected in May 2004.

Main Political Organisations

Partido Social Cristiano (PSC); Izquierda Democratica (ID); Partido Roldosista Ecuatoriano (PRE); Partido Renovador Institucional Accion Nacional (PRIAN); Movimiento Pachakutik-Nuevo Pais (MP-NP); Partido Sociedad Patriotica (PSP); Movimiento Popular Democratico (MPD); Democracia Popular (DP); Partido Socialista (PS); and Alfarismo Nacional (AN). Outside Congress: Confederacion de Nacionalidades Indigenas del Ecuador (Conaie)

The PSC was founded in the 1950s in Quito by a group of upper-middle-class Roman Catholics, but quickly developed a stronghold in the coastal area around Guayaquil. The reformist agenda espoused by the party in the past, as in 1996 when Jaime Nebot ran for president, has been superseded by stronger regionalist and clientelistic considerations. The elderly former president (1984-88) and former mayor of Guayaquil, Leon Febres Cordero, continues to be a powerful influence in the party, but lacks an obvious successor. His protege and former PSC congressional leader, Mr Nebot, became the mayor of Guayaquil in 2000 when Mr Febres Cordero decided to stand down on grounds of poor health.
The ID, founded in 1970, has a moderate reformist wing and a more radical element. Presided over by the former president Rodrigo Borja (1988-92), the ID tends to favour higher taxes for the wealthy, and to oppose public-sector job losses and privatisation. The ID-controlled administration in Pichincha (the province surrounding Quito) blocked the privatisation of the regional electricity distributor in 2002.
The populist PRE was founded in memory of the former president Jaime Roldos, who was killed in a plane crash in 1981. Support for the party is strongest on the coast, where it vies with the PSC for dominance, and in marginal urban and rural areas. The party was discredited by the brief presidency of Mr Bucaram in 1996-97, although subsequent revelations of corruption under the Mahuad regime have had the effect of making Mr Bucaram's sins appear less egregious. The party remains obsessed by the prospect of Mr Bucaram's rehabilitation and return from exile, and appears to have little interest in serious policymaking.
A major role in the 2003 Congress will be played by the populist PRIAN, that has only recently come into existence. The Supreme Electoral Tribunal (TSE) granted Alvaro Noboa (no relation to Gutavo Noboa) a franchise to establish his own personal political party-his main support in his failed bid for the 2002 presidency. Mr Noboa also lost narrowly to Mr Mahuad in 1998.
The Movimiento Pachakutik is the descendant of the umbrella group of indigenous organisations, social movements and trade unions formed in 1996 that achieved immediate electoral success, winning several seats in Congress. Pachakutik rejects privatisation and opposes dollarisation on ideological grounds. Its main concern is to achieve a greater share of the budget for welfare and projects aimed at helping indigenous groups and minorities. It remains the principal congressional vehicle for indigenous groups represented in Conaie, the Confederation of Ecuadorean Indigenous Nationalities. This grass-roots movement, which demonstrated its power in the January 2000 coup, continues to lobby the government from outside Congress, using the threat of a return to mass protest as leverage. The group's membership is divided over the extent to which it should become involved in electoral politics, and disputes between highland indigenous groups and the Amazonian minority have weakened it. It formed an alliance with Nuevo Pais, a like-minded populist party.
The military plays an important political role behind the scenes, especially in times of political instability. It has frequently been called upon to act as a broker to resolve problems triggered by severe labour unrest or deadlock between the president and Congress. In February 1997 it played a major role in negotiating the agreement that brought a swift end to the constitutional crisis that followed the ousting of Mr Bucaram. Most people believe that the military is much less corrupt than civilian politicians, business or the unions, although this image has been dented by recent scandals. The military also commands deep respect among the population owing to its role in providing education, infrastructure and healthcare facilities in marginal rural communities, especially in the Amazon region, during the years of military rule. However, the military's role as a guarantor of stability was compromised by its involvement in the January 2000 quasi-coup. Soldiers, like the civilian population, were aggrieved at the mismanagement and corruption scandals of the 1990s, and some had become sympathetic to radical indigenous movements. Many officers who supported the coup have since been removed. The army will remain powerful, and will use the threat of incursions from Colombia to press for increases in its budget.