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THE ARRIVAL OF GUTIERREZ

With only three years of political experience, retired colonel Lucio Gutierrez was elected President of Ecuador on January 15th, 2003. He had gained public respect after leading a coup d'état three years ago with military and indigenous groups, which successfully overthrew the former President Jamil Mahuad.

Gutierrez was determined to rise to the Presidency and when elections were called he jumped into the political arena dressed in a his military uniform and gathered a strong support from the native Indian movements, socialist groups, syndicate leaders and military generals who had accompanied him during his insurrection.

Because of his past as a military coup leader with revolutionary ideas, the world quickly compared Gutierrez with Venezuelan President Hugo Chavez. Yet Gutierrez followed his own leadership style and successfully built bridges with various interest groups in order to survive. As the election campaign progressed, he disassociated himself from previous radical speeches and sold himself as a pragmatic and driven leader who represented all aspects of Ecuadorian society.

"If fighting corruption and social injustice is leftist, then I am leftist! If generating wealth and boosting production is right wing, then I am right wing!" Gutierrez affirmed in a campaign speech.

The message hit a resounding note among the Ecuadorian people, who live in a country where 70% of the inhabitants live under the poverty line. Gutierrez also changed his military look for Armani suits and courted the international business community, offering a third way which would encourage foreign investment while eliminating poverty. In so doing, Gutierrez distanced himself from his old image and started to be compared with Luis Ignacio Lula da Silva, the former syndicate leader who is now President of Brazil.

"To combat poverty you have to generate richness through work, and for this we must attract investment". This was the new philosophy of a victorious Gutierrez.

In his first months in power, Gutierrez established a good relationship with the international community in Ecuador. "Everyone agrees that he has been an intellectually brilliant soldier, first in his class in all efforts, that he is a quick student and has a good grasp of the country's problems, although his background has been entirely in the military and he has never worked in private industry or academy" says the Canadian Ambassador to Ecuador, Otch Von Finckenstein.

Fernando Luis Santos Reis, General Director in Ecuador of the Brazilian constructor Norberto Oderbrech, agrees that the similarities between Lula of Brazil and Gutierrez of Ecuador are strong. Both leaders have "a strong focus on social issues, with the best intentions to do things fairly, and with effective actions against social inequity".

Unfortunately Gutierrez received a country with a bad international image where corruption and legal insecurity are common issues. His goal has therefore been to lower the investment risk rating of Ecuador, which Standard & Poors classifies as one of the highest in the region.

"In this government there is a great motivation to affect change and improve the bad international image that Ecuador has", said the President. The markets reacted positively, since the country risk has improved since President Gutierrez started his government, rising to the classification of CCC negative to CCC positive.

His efforts started to bear fruit at the end of January when the IMF (International Monetary Fund) signed a letter of intention with Ecuador which allocated $240 million of funds for fresh reforms. To crown his success, Gutierrez visited the main business and political organizations in Washington and New York and met with President Bush, promising to be a close ally of the United States in the future.

To Mauricio Pozo, Minister of Economy of Ecuador, the secret of the success of President Gutierrez is summed up in one word: "Trust".

"We have won the confidence of the international markets and our main commercial partner, the United States" he adds. Pozo added that the economy will grow 2.7% for the whole of 2003, and that he expects GDP growth of 5% in 2004.