Economy & Business - May 2021

ECUADOR: Lasso’s proposed economic agenda likely to face pushback

On 11 April the former banker, Guillermo Lasso, was elected as the next president of Ecuador, defeating his left-wing correísta rival, Andrés Arauz, by 52.4%-47.6% in a far more decisive victory than pre-election polls had anticipated. The country voted in the midst of a severe economic crisis, following an economic contraction of 7.8% last year and five years of stagnation beforehand. Lasso’s prescription for the immediate crisis and the general economic malaise of recent years is to implement an open, private sector-led model of economic development in contrast to the closed, state-led model which has predominated since 2007, despite some liberalisation reforms under the current government led by President Lenín Moreno. While investors have responded positively to the news, some of Lasso’s key market-friendly proposals will face significant pushback in congress, where he lacks a majority, and among large sectors of the population. Thus, the president-elect will be forced to make concessions which will limit the pace and magnitude of his economic reform agenda.

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