Andean Group - February 2008 (ISSN 1741-4466)

Perhaps as many as 120,000 people joined the protest march led by Jaime Nebot, the mayor of Guayaquil, on 24 January. The size of the anti-government demonstration, in which all the protesters wore white, was bigger than either the government or Nebot had expected.

The demonstration reinforces Nebot's role as the leader of the opposition to the government of President Rafael Correa. The big question for him is whether he can expand his support beyond Guayaquil.

Crucially, Nebot, who is a prominent member of the rightwing Partido Social Cristiano (PSC), managed to distance the march from the PSC. The march was against Correa, not for the PSC. Historically, the PSC has been one of the traditional powerbrokers in Ecuadorean politics, but the corruption and greed of its leaders propelled it to defeat at the hands of President Rafael Correa - first in the presidential election in 2006 and then in the elections for the constituent assembly in 2007.

It will be interesting to see if Nebot can transform a successful protest demonstration into a presidential campaign. Nebot has run twice for the presidency before and unsuccessful on both occasions. The government's strategy is to paint Nebot as a representative of the old PSC, while Nebot's strategy is to wrap himself up in the blue and white flag of Guayaquil. One reason why his demonstration was so successful (and so much bigger than the pro-Correa demonstration of 19 January) was that Guayaquileños resented the fact that Correa had bussed in supporters to swell his demonstration.

Nebot wants to depict himself as standing up for Guayaquil and other regions against a doctrinaire leftwing government. The problem with this is that although Correa is radical and often overreacts to criticism, he is probably not dogmatically leftwing.

Nebot's theme was: "Guayaquil is on the march and soon Ecuador will be as well." To the surprise of the government, a smaller, apparently spontaneous demonstration, also in support of Nebot, took place in Quito at the same time as the Guayaquil march.

What makes the confrontation between Correa and Nebot so piquant is that both come from Guayaquil. Correa claims that he, unlike Nebot, still speaks for Guayaquil. On 24 January Correa challenged Nebot to run against him for the presidency and asserted that he would beat Nebot in Guayaquil. Congressional and presidential elections are likely to be held in October under a new constitution which is currently being drawn up by the constituent assembly.

The government's response to Nebot's demonstration was cool. It argued that the size and peacefulness of the demonstration show that democracy is alive and kicking in Ecuador. Some of Correa's critics - but so far not Nebot - claim that he wants to impose a dictatorship.

Nebot's speech put the emphasis on preserving the integrity and autonomy of Guayaquil, the country's main business centre, which has its own flag and anthem. This approach, however, may not play well outside the province of Guayas. Three times Nebot asked the demonstrators what is the name of Guayaquil's enemy: three times they chorused: "Correa". "I did not say that; you did," Nebot answered. Nebot went on to say that he was not seeking to confront Correa but to stand up to Correa, who was bullying the country.

However, Nebot stopped short of completely condemning Correa's constituent assembly, which is rewriting the constitution. Nebot's line is that the constitution should be fair but should not penalise ("enslave" was the word he actually used in his speech) those people Correa blames for creating the mess the country is now in.

The constituent assembly: President Rafael Correa's Acuerdo Paí­s, the dominant group in the constituent assembly, published some of its proposals for constitutional change on 23 January. It wants to strengthen the presidency against congress. The president will have the new right to call congressional elections, (albeit only once, and only for two specific reasons) and the presidential term will be extended from four years to six.

The two reasons for dissolving congress are: first, when congress acts unconstitutionally in the view of the constitutional court; and second, if congress refuses to approve a government's development plan. Acuerdo Paí­s is also keen on the idea of allowing presidents to be re-elected.

Oil: On 26 January President Rafael Correa said that oil companies operating in the country would have 45 days to accept new agreements. Correa is bringing forward the deadline; the energy minister, Galo Chiriboga, had talked about settling terms by May.

The government wants to change the contracts from joint ventures - which allow the oil companies to include Ecuadorean reserves on their balance sheets - to subcontracting deals, which do not. Five foreign oil companies still operate in Ecuador. They are: City Oriente; Petrobras; Perenco; Repsol-YPF and Andes Petroleum.

The navy: On 21 January President Correa appointed Rear Admiral Livio Espinosa to head the navy. Espinosa was one of the four rear admirals who protested against the appointment of Vice Admiral Homero Arellano as navy commander earlier in the month. The government backed down and dismissed Arellano in mid January.

As the government is using the navy to manage the state oil company PetroEcuador, the shenanigans in the high command have major economic and political implications. Two of Espinosa's fellow rear-admiral protesters were also promoted. The new chief of the naval staff is Aland Molestina and the chief of operations is Milton Lalama.