Ecuador’s constituent assembly has approved a draft constitution that would increase the powers of Rafael Correa, the president, and open the way for him to run for two more consecutive four-year terms.
The draft, approved by a 94 to 32 vote, will be put to the public in a September 28 referendum. Should it pass, new elections are likely to be held in 2009.
The new constitution would give Ecuador’s president the power to dissolve Congress and Congress the power to unseat the president, although in both cases a general election would have to be called.
Ecuador is one of the least politically stable countries in the region, having had eight presidents in the past decade. If approved, the document will be the country’s 20th constitution since 1830.
The constitution would hand Mr Correa, who came to power in January 2007 with an agenda to wrest power from Ecuador’s entrenched political elites, control over monetary and credit policy from the central bank.
Robert Andrade, president of the central bank, resigned this week ahead of the draft constitution’s approval. Some observers say the bank already has little autonomy in overseeing Ecuador’s dollarised economy.
Seven months into 2008, the bank has still not reported growth figures for 2007. Observers estimate the economy grew at about 2 per cent against a regional average of 5 per cent.
Mr Correa, an economist, has been trying to find “new and innovative ways” to estimate unemployment and inflation, according to Patrick Esteruelas, an analyst with Eurasia Group.
“Most people believe that Correa has been undermining the central bank’s ability to report on Ecuador’s economy in a transparent fashion because he doesn’t like what the figures show,” he said.
“Growth has been extremely poor, below 2 per cent of GDP last year. Frankly, with oil prices where they were last year and with the dollar artificially low, which should boost non-traditional exports, it is a tremendous opportunity lost.”
Mr Correa says the new constitution would dilute the power of corrupt elites and redistribute wealth more equitably, but his critics fear it will concentrate power in the president’s hands.
Mr Correa’s high approval ratings have been dented by unemployment, slow growth and inflation. His seizure this month of 195 companies he says are linked to the country’s banking collapse in the 1990s boosted his popularity. He has signalled that more seizures are possible before the referendum.
