Reduce to Simmer: Guillermo Lasso’s Temperature Down to Mild as New Challenges Mount

  • President Lasso’s rise to power and successful start is losing heat thanks to political and personal challenges.
  • Political tensions, Opposition in the Legislature and Pandora Papers challenge his impressive progress so far.
  • Expectations are high as Lasso’s response could be symbolic for right-wing viability in Latin America.
Guillermo Lasso's Temperature Down to Mild as New Challenges Mount
La Gaceta

Why is Lasso’s Heat Level Mild?

Answer: He had a hot start to his presidency, but increasing challenges are bringing down his temperature.

Ecuador’s President Guillermo Lasso’s political ‘honeymoon’ is coming to an end. The conservative former banker has enjoyed a hot rise to power and a successful few months at the beginning of his presidency, but now several mounting issues are drawing heat from the President. 

In terms of this success, Lasso has been praised on multiple fronts for his efficacy in his several achievements in office, the first of his merits being his victory over Ecuadorian populism. Lasso was elected on the 24th of May, a surprise to many as he clinched 52.4% of the vote in his third presidential election campaign. Before this, Ecuador had experienced over two decades of left-wing populism, most recently in the form of Lenín Moreno . Moreno indeed tried to distance himself from his predecessor Rafael Correa, (who in 2020 was found guilty of corruption.) and the left in general, embracing liberalism and reducing government spending. However, despite his efforts, Moreno suffered a harsh drop in approval ratings and is remembered as another Ecuadorian leftist president.

 The first time election of a centre-right candidate in 20 years highlighted the ideological fragmentation of the region and marked a dynamic political shift in Ecuador, whose electorate had become disillusioned with populist leaders. 

Equally important in understanding Lasso’s previously hot temperature, is the leader’s efficient approach and progress with regards to Ecuador’s vaccination programme. On assuming office, Lasso inherited majorly inadequate vaccination progress, wherein limited access meant that less than 3% of the population had received a dose. However, since his arrival, Lasso has delivered on his 100-day pledge and currently 56% of Ecuadorians are fully vaccinated.

President Lasso has also made great strides internationally, opening dialogue with the U.S. China, and Russia on everything from trade to vaccines. The president was also praised for his success in reaching a new agreement with the IMF, securing $1.5bln and helping to fulfil his promise to cut spending. 
These achievements all speak to his 74% approval rating, and are essential in understanding how new challenges are merely tapering his heat level, rather than freezing him in place.

Who is Changing Lasso’s Heat Level?

Answer:  Pandora Papers, Political Tensions and Crises are cooling Lasso down.

Despite what appears as a great start to his term, President Lasso is not by any means without critics and challengers. There are in fact, numerous factors that stack the odds against Lasso, each of them as potentially damning as the last.

The most immediate of these is without doubt his embroilment in the Pandora Papers leak, which named Lasso’s involvement with offshore companies and properties. The implications of these revelations have been serious, and a preliminary investigation has been opened by Ecuador’s attorney general’s office into the President for tax fraud. The investigation itself came about after allegations were presented by former presidential candidate Yaku Perez, who first urged a closer look be taken at Lasso’s finances during his first presidential campaign in 2013. Since the allegations Lasso has defended himself, claiming his disassociation with said companies in 2017, and refusing to attend a legislative commission of the National Assembly, who have also opened an investigation. 

President Lasso is also facing wider political tensions that are challenging his administration and heat level. The latest of which comes in the form of protests to rising fuel prices. The leader has faced criticism from unions and other groups such as CONAIE for the increase in fuel prices during a time where Ecuadorians are struggling greatly with the pandemic. After thousands of protesters launched their week-long protest, obstructing roads and disrupting traffic, the conservative Lasso was forced to re-evaluate his actions and the incremental fuel price increase was scrapped. Lasso also announced the freezing of prices on basic grocery products in response to indigenous demands and as a means of bringing stability to the ‘people’s pockets’ during the ongoing rising worries surrounding fuel prices.

Lasso has equally faced pushback from Ecuador’s legislature, who rejected without debate a tax reform bill that the President had submitted in September. The proposed bill would increase contributions from higher earners as well as request a one-time contribution from Ecuadorians with a worth of over $1 million. The proposal equally maintains its controversial goal of increasing taxes for those earning over $2000 a month, a questionable clause coming from an ex-banker turned President who has been found to have links with offshore accounts. This proposal highlights for many the idea that Lasso has no aligned interest with his electorate, and is perhaps not the ‘candidate of change’ they were promised. 

 The government will submit a modified version of the bill, but without a majority in the National Assembly, Lasso will have a hard time making the economic waves he needs to in order to fulfil his promises.  

Added to the list of inherited issues that continue to challenge Lasso’s heat level is the state of Ecuador’s penitentiary system. For several years now organised crime groups have enjoyed control in a heavily overcrowded prison system where police have limited resources. The crisis first reared its head under Moreno’s administration but reached a fever pitch in October when the largest riot in the nation’s history killed 118 inmates. The blame is mainly placed on either the former administration or the prisoners themselves, but many are turning to attribute these deaths to the inaction of President Lasso, who has done little to invest in further resources and has instead focused on taxing the middle class.

Undoubtedly, Lasso’s position in these situations: scandal, tension, and crisis could have both political and personal consequences that are far-reaching, and gives the leader’s opposition ample ammunition in the near future.

What is Driving Lasso?

Answer: Desire to meet great expectations and remain in favour with his electorate, while strengthening Ecuador’s economy and his own position. 

There are several drivers behind President Lasso’s actions, not only to maintain his approval ratings and appease his electorate but also to address Ecuador’s socioeconomic issues and secure opportunities for the nation’s near future. 

Lasso’s primary concern was to sustain his high approval rating and he at first aimed to do so by balancing what he initially called the ‘two cornerstones of a prosperous and equitable country’: economic recovery and social justice. Since then, the economic impact of Covid-19 that Lasso has inherited has been a key motivator of his policy decisions and has been at the heart of his vaccination pledge as well as economic reform. The motivation behind his proposed tax reform is two-pronged, as he aims to comply with his promises of economic recovery and a ‘zero-debt plan’ as well as maintain favour with the IMF, who already have been crucial in his plans for the country. It can be argued then, that between these two pillars of recovery and justice, the former has taken priority for the President; indigenous protests and arrests speak to how the latter has been somewhat left at the wayside.

President Lasso’s motives are manifested in the reconstruction of Ecuador’s fluctuating oil industry and strengthening relations with Ecuador’s northern neighbours. Ecuador’s biggest source of revenue in terms of oil is Petroecuador and with a hydrocarbons policy that opens the state oil company to private investment, Lasso aimed to increase crude oil production. Oil is an industry that took on heavy losses under the former left-wing governments, with an estimated $2.4bln lost between 2012 and 2016 due to corruption. Initially, the planned reconstruction was going well, however, after a severe systems failure and a decline in investment, Petroecuador reported last month heavy production losses. The setback comes as a heavy blow to a government that aims to increase production by the end of the year and depends on the interest of private investors who are not biting.

The motivation to strengthen Ecuador’s economy and position are at the forefront of Lasso’s policy-making decisions, not only in the aforementioned domestic policy but equally within Latin America. One of President Lasso’s first acts in office was to visit northern neighbour Colombia, where the priority of conversation with President Iván Duque was trade, security, and migration; namely, the course of action to be taken with tens of thousands of Venezuelan migrants entering the country. 

Ultimately, President Lasso’s decisions in tax reform, vaccination progress, strengthening of industry, and foreign policy have everything to do with meeting the electorate’s great expectations of the new administration. While the leader’s austerity measures and fiscal reforms have received pushback in places, Lasso has been responsive to the criticisms and is motivated primarily by the strengthening of his government and Ecuador as a whole, while maintaining favour with key sectors of the population. 

What does this mean for you?

Answer: Lasso’s response to challenges could have far reaching ideological consequences, proving the viability of conservatism in Latin America.

As the first centre-right candidate in Ecuador in two decades, Guillermo Lasso has broken the wave of populism in the country, meaning the effectiveness of this government and how it faces contention will be under heightened scrutiny from the rest of the region. 

The electoral success of Lasso can be largely attributed to the division and therefore weakening of the left in Ecuador, as well as the electorate’s disillusionment in a Correist or populist brand of socialism. This same dissent was similarly evident in the 2019 protests when former President Moreno’s decision to cut fuel subsidies and implement austerity measures resulted in mass demonstrations, crippling transportation and public services.

As a new flavour of government approaches its first real set of challenges, Lasso seems to a certain extent milder, with a more stabilised heat level. His success in vaccination and agreements are somewhat marred by his opposition in the Legislature and recent protests, and some outlets are reporting as much as a 30 point drop in approval. This falling popularity and Pandora Papers scandal threaten  Lasso’s ability to protect himself from opposition and rally support for his style of government.

While Lasso has claimed he does not identify himself with any specific ideological position, it is clear that his policy-making decisions have been distinct from the former governments’ approach. This new stage of Ecuadorian politics could be essential for the continent that is somewhat ideologically fragmented, proving the viability of a red-wave conservatism in the region and a representative shift in Latin American political dynamics. Depending on Lasso’s next moves, we could see a rise in popularity of fiscally oriented, centre-right governments in the region, a significant end to previously socialist tendency and a re-establishment of conservatism. 

However, with new approval ratings appearing to fall and some even starting to list impeachable offences, any message of viable right-wing prosperity is unlikely to be transmitted to the rest of the region. Lasso may have been the ‘candidate of change’, but as his temperature stabilises and his options become more limited, it seems nothing has changed for Ecuadorians disillusioned by their government.

Ross Hardy

Research and Analysis Intern