One of them is a true fan of dialogue.

Photographer: Edu Leon/LatinContent/Getty Images

The Pope's Visit Won't Cure Ecuador

Mac Margolis writes about Latin America for Bloomberg View. He was a reporter for Newsweek and is the author of “The Last New World: The Conquest of the Amazon Frontier.”
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No one has ever accused Ecuadorean President Rafael Correa of modesty. In his welcome to Pope Francis, who arrived in Quito on Sunday to begin a weeklong, three-country visit of the region, the Andean strongman didn't disappoint.

Correa acknowledged that "the pope is Argentine" and "God is probably Brazilian," but added, playfully, that "Paradise surely is Ecuadorean." His political opponents might be forgiven for failing to see the humor.

For the last month, tens of thousands of Ecuadoreans have marched against Correa's government. Such discord is likely what Francis had in mind when, in a nuanced message, he called on his flock to embrace the spirit of "reconciliation" and enjoined Ecuadoreans to "value differences, fomenting dialogue and the full participation" of those who are excluded.

Problem is, Correa doesn't do dialogue. The 52-year-old Ecuadorean caudillo, who studied economics in the U.S., but learned his authoritarian style from the late Hugo Chavez, once again stooped to the occasion, answering the crowds with police, pepper spray and Bolivarian bombast.

In a national broadcast, he called the overwhelmingly peaceable demonstrators would-be coup makers and accused his adversaries of trying to embarrass him before the Holy Father.

Shouts of "Viva el papa!" ("Long live the pope!") mingled with "Fuera, Correa!" ("Correa, out!"), throughout Francis's first day in Quito.

For all Correa's thunder, this is a decisive moment for the conflicted Andean autocracy. The Ecuadorean press watchdog group Fundamedios has counted 1,234 "aggressions against freedom of speech" since 2008 and 123 official sanctions against the press since the 2013 media law went into effect.

And yet until recently Correa's plays to centralize power by stacking courts, courting the military, hushing critics and pumping up the pro-government press rarely drew more than a collective shrug.

Riding the oil boom and blessed by generous social spending, the poor and the emerging middle classes were too busy rising to notice the official hand over their mouths. Consider that from 2006 to 2014, Ecuador's poverty rate fell steeply while extreme poverty shrank by half.

But the mood has soured as the oil-rich country's fortunes have tumbled with falling crude prices: Economic growth has been slowing for three years running and may expand by just 1.9 percent this year.

Since 2000, Ecuador has avoided boom and bust by anchoring the economy to the U.S. dollar. But with fewer petrodollars coming in, and government barred under dollarization rules from printing money to goose the economy, Ecuador is in a vise.

To compensate, Correa hoisted import tariffs, nearly starting a trade war with Colombia and Peru, and ordered banks to adopt a virtual currency.

Playing to the cheap seats, he tried spinning a tax grab as retribution against Ecuador's richest "two percent," sponsoring a bill to take as much as 77.5 percent of inheritances and up to 75 percent in capital gains. Instead he drove the middle class to the streets in some of the biggest protests in a decade.

Correa also is weighing phasing out the lavish fuel subsidy, which keeps motorists happy but costs government 7 percent of GDP. That's about twice what the country spends on education.

He also pushed his majority in the unicameral congress to slash a $1-billion-a-year subsidy that covers half of pensions for state workers on a vague promise to pump more state money into pensions in the future.

These moves make fiscal sense, but are politically toxic. "The Latin American middle classes are conservative, and you don't mess with their pockets," Ecuadorean political scientist Andres Mejia Acosta, at Kings College in London, told me.

Mass demonstrations on the eve of the pope's visit forced Correa to "temporarily" withdraw the death tax proposal, though he vows he will not drop the matter, nor "budge a millimeter" before the protesters.

In a government where hubris trumps dialogue, Francis may be missed when he leaves.

This column does not necessarily reflect the opinion of Bloomberg View's editorial board or Bloomberg LP, its owners and investors.

To contact the author on this story:
Mac Margolis at mmargolis14@bloomberg.net

To contact the editor on this story:
Philip Gray at philipgray@bloomberg.net