Latin American Program in the News: Ecuador Re-Elects Correa on Vow to Spend Amid Record Deficit
Rafael Correa was re-elected as Ecuador’s president yesterday after pledging to boost spending on the poor while the country runs up its biggest-ever budget deficit.
Preliminary voting tallies showed Correa with 57 percent of the vote in his bid for another four-year term, the National Electoral Council said yesterday. With 71 percent of the ballots counted, Correa’s nearest rival, Guillermo Lasso, had polled 23 percent, the agency said. Final results will be released in days, the agency said.
Correa, Ecuador’s first president to be re-elected since 1968, begins a new term with few options to finance his campaign pledges as stagnant oil prices and slumping growth limit funds to boost outlays on social welfare. The self-described socialist revolutionary, who dubbed foreign bondholders “true monsters”when he defaulted on $3.2 billion of debt in 2008, may now return to overseas credit markets to take advantage of a record rally in high-yield debt to help fund spending needed to sustain an economic expansion.
“I don’t see very simple solutions to attract more investment,” said Carlos Andres Baca, an analyst at Quito-based economic and political consulting firm Politik. “It won’t be easy to find new financing.”
“Ecuador needs outside capital to continue to develop the oil industry and remain competitive,” Cynthia Arnson, director of the Latin American program at the Woodrow Wilson International Center for Scholars, said in a telephone interview. “They need outside capital but whether they will be able to attract private capital is a huge question mark.”
An increase in the price of oil, tax increases and loans from China have helped Correa more than double spending in the past six years, fueling growth.
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