Conservative businessman Guillermo Lasso was sworn in as Ecuador’s new president on Monday, delivering a sombre speech to congress about the massive economic and social challenges his government faces.
The 65-year-old, who surprised everyone by winning last month’s election, said Ecuador’s previous leaders had failed the country by giving in to the temptation of authoritarianism and “the obscene cult of the caudillo” — the strongman who has so often dominated Latin American politics.
“Today, we’re receiving a country with historic levels of unemployment, a country that has stood out for its inability to deal with a brutal pandemic,” he told visiting dignitaries, including Brazil’s president Jair Bolsonaro and King Felipe of Spain. “Other countries in similar situations have tackled it in a more orderly, efficient fashion, and above all without corruption.”
Looking frail and walking with the aid of a stick, a consequence of a walking accident in 2013 followed by a botched operation, Lasso faces enormous challenges as Ecuador’s leader.
Lasso, who made his fortune in the banking sector before entering politics and winning the presidency on his third attempt, described Ecuador as “a country where the guilty fill their pockets while the most innocent — newborn Ecuadorians — can’t even fill their stomachs”, and “a country that has failed its youth in education and in the creation of opportunities”.
The country’s economy was in trouble even before the coronavirus pandemic. It contracted nearly 8 per cent last year, and the central bank forecasts a recovery of only 3.1 per cent this year.
Debt has jumped to about 65 per cent of gross domestic product and the fiscal deficit has widened. As the only formally dollarised country in South America, Ecuador is limited in what it can do to steady its finances.
Last year it agreed a $6.5bn lending programme with the IMF but, as the pandemic hit, found it could not meet the requirements. Lasso has refused to consider some of the tax increases the fund has called for.
He has appointed Simón Cueva, a 53-year-old economist, as his finance minister.
“It’s a good appointment,” said Sebastián Hurtado, head of local political risk consultancy Prófitas. “Apart from a brief spell at the central bank, Cueva has spent most of this time in the private sector and in academic research. He’s not as neoliberal as some of the other economists close to Lasso, and we might see more emphasis on social policies than one might have expected.”
Cueva has said Ecuador will start negotiations with the IMF on tweaking the current programme in the coming months.
“I expect Lasso’s government to have a healthy relationship with the fund,” Hurtado said. “The problem isn’t going to be reaching an agreement. It’s going to be implementing it.”
The other immediate challenge facing the Lasso government is the pandemic.
Ecuador has suffered the world’s second worst rate of excess deaths since the health emergency began, according to a Financial Times analysis. The response has been chaotic: there have been five health ministers in the past year.
Lasso said his government will oversee the vaccination of 9m people, more than half the population, in his first 100 days — an ambitious goal for a country that has administered fewer than 2m.