Skip to main content

Step by Step


On Sunday September 28 of 2008, Ecuador adopted its 20th Constitution. The new elected Constitution has 444 articles and by far give more power to the state in what respect to the economy and the political system. About 64.04% of Ecuador’s voting population approved the new Magna Carta, while 28.01% voted “NO”, the null votes added to 7.21% (vote that represents neither yes or no) and blank votes were roughly 0.74%. The decision is clear; Ecuador is following the steps towards a socialist economy or what Mr. Chavez has claimed “Socialism of the 21st century.”

President Correa has aligned his government with the social, economical and political structures those countries such as Venezuela, Bolivia, and others in the Latin American continent. These socio-economic and political structures have been implemented through the region with more emphasis in the last five years. However, it is important to mention that Latin America has always suffered from high levels of dependency in governments. Latin America’s history is full of state intervention through mercantilism, wealth transfers (privileges), and political corruption. Alvaro Vargas Llosa in his essay, The Case of Latin America, says the following about Latin America’s history:

“Reform meant replacing inflation with new taxes, high tariffs with regional trading blocs, government monopolies with private monopolies, price controls with regulatory bodies.”

Ecuador needed to clean its old and corrupted political system; Rafael Correa, who is an economist by education, became the “savior” of the country. He promised to clean after the decadent political system and change the country’s direction for a better future. However, Ecuadorians have forgotten to ask Correa (if he does all what he said he would do) at the cost of what? In addition, to who ultimately will pay for it?

The new Constitution gives Correa the possibility to stay in power until 2017. It gives Correa control over the central bank, judiciary and electoral authority. Correa’s new tool (Ecuador’s 20th Constitution) will create a quasi-Congress, which will be integrated mostly by politicians from his own political party, Alianza Pais. Correa is certainly creating in the short-run but even more in the long-run higher levels of bureaucracy, less property rights protection, fewer incentives for entrepreneurial activity, and more unemployment.

Ecuador is sadly, “Step by Step” moving towards a socialist economy that will only lead the country to a social chaos. It seems that President Correa forgot about his economic education and has become a senseless politician. Ecuadorians are losing their individual liberty, and economic freedom. Robert Lawson mentions in his essay, Economic Freedom and Property Rights;

“After over a decade of research, the empirical evidence is overwhelmingly clear: Societies that organize themselves with private property, rule of law, and free markets outperform, on almost every measurable margin, societies that are less economically free”

Ecuadorians must not allow Correa to become a dictator. If we want a better country for our future and the future of our children then open your eyes and see beyond the false promises of a corrupt politician like Correa.

Comments

Popular posts from this blog

De-dollarizing an Economy is not an Easy Task but in the Case of Ecuador it Makes No Sense

Ecuador adopted the US Dollar as its currency on January, 2000. The country at the time had almost a 100% rate of inflation and it used the US currency for major transactions such as: house, cars, and importations purchases, to name a few. However, there was a huge social cost of implementing the US Dollar in Ecuador. The political cost took a big hit when President Mahuad was ousted due to his decision in 2000.      Former President Jamil Mahuad in his book called: "This is how we dollarize Ecuador" (2021), makes a detailed account of the economic conditions in which the country was prior to the execution of the executive decree to use the US dollar as the country's official currency.  Mainly, in its chapter IX "Hyperinflation and freezing." Mahuad mentions the following: “We then had a triple run: a bank run (due to the withdrawal of bank deposits), an exchange run (due to the loss of Central Bank reserves caused by the purchase of dollars) and a flight of cap

Lasso: you failed

     Guillermo Lasso was elected as President of Ecuador in 2021. Since May of that year, Lasso demonstrated difficulties in managing its own political party, networking and lobbying with the National Assembly, and most of all keeping close his alliance with the Partido Social Cristiano’s Leader, Jaime Nebot.      Lasso backed his presidency initial months with a successful Covid-19 vaccination campaign, which was supported mainly by international organizations. But further than that; Lasso’s government is a failure. In an earlier post of this blog, it’s mentioned the following: “ With this in mind and having elections for president in Ecuador in 2024; time is an enemy for Lasso’s presidency. Ecuador’s President needs to increase speed in changes, reforms, and lobbying through a divided Assembly (Congress) to obtain legislation that allows: economic freedom, stronger rule of law, and presenting a positive environment for foreign investment. All these changes must be done quickly en

An Unlikely Runoff: González vs. Noboa

Source: BBC News Mundo  ( Luisa González & Daniel Noboa) Ecuador’s Presidential election took place on August, 20 th , 2023. According to the Consejo Nacional Electoral (CNE) official information, with more than 98% of the ballots in, it shows that Luisa González and Daniel Noboa are headed to the runoff in October this year. González, a disciple and loyal follower of Rafael Correa, achieved the 33.6% of the electorate; while Noboa, a self-proclaimed “progressive” –left-leaning- entrepreneur and son of banana mogul, got 23.4% of the ballots on Sunday. In other words, only 5 out of ten people supported both candidates in this election. Hence, 50% of the other constituents voted for other candidate (one out of the other 6 candidates that run for office) that means the October runoff duo have much work to do to get bigger support within the next 50 days.      However, the story goes beyond the introducing data presented in the earlier paragraph. The results show that Rafael Correa’s p