Here’s my vote: President Moreno at a constitutional referendum in Quito, Ecuador, in February 2018 Gabriela Mena · Press South · Getty

Progressive Latin Americans were relieved when Lenín Moreno was elected president of Ecuador in May 2017. His victory over banker Guillermo Lasso seemed to halt the rightwing advance in the region following the election of Horacio Cartes in Paraguay in 2013 and Mauricio Macri in Argentina in 2015, and the nomination of Michel Temer in Brazil after the contested ousting of Dilma Rousseff in 2016 (1).

Moreno had promised during his campaign to pursue the Citizens’ Revolution (CR) initiated by Rafael Correa (president 2007-17) with its mix of development, wealth redistribution and reconstruction of the state. Moreno had also vowed to change Correa’s aggressive, vertical style of leadership, promising national dialogue to end the polarisation that had exhausted so many people. The challenge to Correa’s model increased with the economic crisis of 2015-16 and the corruption scandals involving key Correa government figures.

Once the elections were over, Ecuadorians discovered that the true purpose of Moreno’s ‘national dialogue’ was to bring about a rapprochement between the executive and the anti-Correa elite. As soon as he came to power, Moreno behaved as though his legitimacy depended on his ability to put this policy into effect. The platform on which he had been elected, and which might have obstructed such a dialogue, vanished.

Moreno’s first measures, including restoring market forces and aligning foreign policy with the US, astounded Ecuador’s left and pleased the right. His main adversary was Correa, though he had been Correa’s vice-president in 2007-13 and had pledged to pursue his policies. The CR, the progressive political movement that had transformed the country, had brought to power a man determined to eradicate that movement.

This February, Moreno’s government organised a referendum, which was presented to the public as vital to ‘overcome corruption’. Its real goal was to weaken Correa, still very popular with some people. The referendum had seven proposals, including one to ban political leaders from serving more than two terms of office, and another to remove officials appointed by the Council for Civil Participation and Social Control, deemed close to Correa. The government won the referendum, meaning Correa would be unable to run in the 2021 presidential election and was therefore considerably weakened. The vacuum left by his supporters’ departure made the government a comfortable nest for representatives of the elite, business leaders and the right.

Elite grows closer to Moreno

Alianza País (Proud and Sovereign Fatherland Alliance), founded by Correa in 2006, had become the largest party in Ecuador since the end of the dictatorship in 1979. In 2017 it won a parliamentary majority, despite going from 100 seats out of 137 in 2013 to 74. At the height of the Correa-Moreno dispute, the electoral court put Alianza País under the control of Moreno’s supporters, forcing Correa’s opponents to set up a new party; this was difficult because of obstacles created by the electoral authorities, now close to Moreno (2). The collapse of the forces that had embodied the CR brought the elite closer to Moreno, who disregards popular parties and mobilisation when it comes to constructing political blocs. The later appointment of business leader Richard Martínez as finance minister strengthened the alliance backing Moreno, although the split between the leaders deprived him of a parliamentary majority.

Moreno's government succeeded in casting doubt on ‘the winning decade of 2007-17', which gave Ecuadorians economic growth and reduced poverty and inequality

Moreno’s supporters are not just the traditional elite. At a subordinate level, they also include trade union representatives and key figures of the indigenous movement, dismaying some of the South American left. This August, Adolfo Pérez Esquivel, the Argentinian winner of the 1980 Nobel peace prize, addressed an open letter to the Confederation of Indigenous Nationalities of Ecuador (Conaie). Moreno had just proposed that Conaie move to the Ecuador offices of the Union of South American Nations (Unasur), which he and other South American rightwing leaders want to undermine. Esquivel wrote: ‘Lenín Moreno, together with other leaders of countries with neoliberal policies, are seeking to destroy these spaces of continental integration and participation such as Unasur.’ He added that the indigenous peoples of Ecuador had always mobilised to defend their rights and freedoms, and that this proposition aimed to weaken democracy, and pointed out that Unasur had played a vital role in forestalling and denouncing attempts to overthrow governments in Bolivia, Ecuador, Paraguay and Honduras, among other countries.

Once Moreno brought business leaders and the reactionary fringes of the trade unions and civil society organisations into the fold, which Correa had refused to do, he managed to govern with a party that had no political cohesion, electoral base or popular support. He promoted the idea that the crisis could be explained by ‘populist waste’. Martínez shifted to the right, aiming to liberalise trade and make labour laws more flexible. The Productive Development Law voted in this August imposed austerity and ended Correa’s policies of development and redistribution of wealth.

This law offered an amnesty to the worst tax delinquents, and tax breaks for major corporations to ‘encourage the return of investors’. Presented as a measure for financing the state, it pandered to the fiscal insubordination of the rich and powerful. The first article of Ecuador’s labour code, which had defended workers’ rights, was abrogated; it had allowed the authorities to prosecute business owners who undermined their employees’ interests by concealing assets or removing machinery from their workshops.

‘Neoliberalism by surprise’

The government stopped taxing the extraordinary increase in the cost of raw materials and the repatriation of foreign currency. Like the Brazilian government, it set an annual 3% cap on public expenditure and restricted the budget deficit to the repayment of interest on government debt. Investment disappeared from policy but privatisations were made easier by guaranteeing subsidies for several years. Heedless of the constitution, the government adopted an international investor-state dispute settlement system for foreign investors (3).

Besides weakening Unasur and the Community of Latin American and Caribbean States (Celac), Moreno wanted Ecuador to join the Pacific Alliance, a free trade organisation of conservative Latin American states. He also wanted to end the asylum granted to WikiLeaks founder Julian Assange, who lives in its London embassy (see Prisoner for free speech, in this issue).

It is hard to prove the ‘populist rout’ denounced by Ecuadorian neoliberals. Between 2007 and 2016, the poverty rate fell from 37% to 23%, while GDP leapt by 68%. Moreno used these changes to pander to international markets. The principles of his new economy look like the rent-based system that supported the old oligarchy.

Since Ecuador had just emerged from a long period under Correa’s progressive movement, there had to be a profound transformation in the balance of power and the mechanisms for establishing political legitimacy to make sure this dramatic reversal provoked little resistance. This was how ‘neoliberalism by surprise’ was imposed. Susan Stokes (4) first used the phrase in her 2001 analysis of the lack of democratic legitimacy in Latin American governments; like Moreno’s government, they came to power on programmes opposed to neoliberal formulas, and yet applied them. Alberto Fujimori in 1990s Peru had been so successful at this that he won a second term by promising security and order, to counter the Shining Path guerrilla movement, in exchange for structural adjustments.

In Ecuador, the neoliberal reversal has been presented as a result of the ‘Correist moral crisis’; the fight against corruption is used to justify abandoning the country to market forces.

The government set up this narrative using a politically active legal system and a vigorous campaign to support government decisions and cloud memories through mainstream and social media. The courts have become legal forums to assess the relevance of policies. Former vice-president Jorge Glas was imprisoned on charges of criminal conspiracy, and Correa, in exile in Belgium, was for a time the subject of an international arrest warrant (5). Moreno’s government has gradually succeeded in casting doubt on what Ecuadorians were calling ‘the winning decade of 2007-17’, which gave them economic growth and reduced poverty and inequality.

The government’s justification of these legal and media actions has imposed the idea of an unethical, bloated and opaque state linked to the left, which inevitably led to malfeasance and crisis. Government and media have taken up the new Latin American argument that leftwing redistribution results in corruption, and austerity is therefore a moral imperative.

The progressive camp is divided between a left wing opposed to Correa and militant Correa supporters weakened by the government's political and legal attacks and their inability to self-criticise

Would Moreno have succeeded had there not been a genuine crisis within the CR? The impunity of those responsible for corruption has led some Ecuadorians to agree with Moreno’s government, and despite the arbitrary nature of the anti-Correa campaign, the fight against corruption is now seen as a major public issue. For progressives to attribute setbacks to ‘Moreno’s betrayal’ denies the popular demand for integrity, and undermines any attempt to show that neoliberalism is not a remedy for the supposed excesses of the left, but an inegalitarian political project.

The progressive camp is now divided between a left wing opposed to Correa and militant Correa supporters weakened by the government’s political and legal attacks and their inability to self-criticise. A new shift to the left is unlikely, even though the right is sharing power and has not won a presidential election since 1998. A fall in the government’s popularity could jeopardise its chances of being re-elected, in which case Moreno, like Michel Temer, will have swallowed up both those who brought him to power and those who supported his anti-populist crusade. Everyone knows how that ended in Brazil.