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Welcome to the Latin News Podcast, a fortnightly deep dive into key developments from across Latin America and the Caribbean.
- Speaker #1
Here's your host from Bogota,
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Colombia,
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journalist Richard McCall.
- Speaker #0
This is the Latin News Podcast. I am your host, Richard McCall, here in Colombia. Our very special guest this week is Walter Spurrier, who is on the line from Guayaquil in Ecuador. Walter is the president. of Grupo Spurrier and an editorialist in the Diario El Universo in Ecuador. He's also the director of the political economic publication Weekly Analysis, also known in Spanish as Análisis Semanal. Welcome on the Latin News podcast, Walter.
- Speaker #1
Oh, thank you, Richard. I'm very pleased to be in the Latin News podcast.
- Speaker #0
No, it's an absolute pleasure because it's been a while since we discussed Ecuador on the podcast, but so much has been going on and we haven't talked about it since the elections. And I think it's a good place to start before we get into all of the issues of insecurity and power outages and the economy. But if we address that second round of the presidential elections in which Noboa won by a larger margin that many of us had expected.
- Speaker #1
Yes, Richard. Actually, there are two surprises. The first surprise was in the first round, it was a tie between he and the candidate from Correismo. And it was a surprise because Paul gave him a victory or at least an important advantage to ease his way into the runoff. And he did it. And actually, he took it very badly. He didn't make it. no statements afterwards. And the polls suggested that González was going to win in the run-up. That he was going in behind the polls. However, there are a couple of things he did. Another thing that the other side did, which shifted the situation. First of all, he approved several... He was acting president, so... He approved a series of social programs with immediate application that essentially put some money in the pocket of everybody from the lower middle class down who was not enrolled in Social Security. People did not have a regular income. And that he did and spent quite a bit of money in that. And then on the other side, information started pouring in that Correa and his... team considered González just a puppet because they referred to her as a hermit in their podcast and the government got hold of that information. And in addition Correa chose González as a candidate because he was absolutely sure she would be loyal to him but in his party, in his movement, there are Lots of people with a very good curriculum who were really expected to be the chosen candidate for the presidency. And they were very disappointed by being relegated. So some of them probably did not campaign as hard as they were supposed to do. And in addition, in the middle class, the middle class, which is particularly strong in Quito, So that is like. Correa very much because of his authoritarianism and his way of having no control on his activities. I already analyzed things in Ecuador at the time of the military government. This was much more authoritarian than the military government we had in the 70s. So they disliked that type of government and also the um Since he was a very strong president, during the decade he was in power, he did not tolerate people making protests, making demonstrations in the streets. So he clashed down very heavily on the indigenous movement's complaints. Therefore, the indigenous felt that with Correa, they're going to be repressed if Gonzalez was president. All of the things added up. Frankly, Richard, when the results of the elections were started pouring in, at first I said, well, probably the war is ahead because the key to votes are being pulled first, are coming out of the system first, but then this is going to change. time and he did it and I was also surprised and no polls were predicting at that time he was going to win such an advantage so I think these are the two factors that had the more incidents and the result on the one hand Novoa's spending freely to get support from the population, and on the other, mistakes made by the Korea side and resistance on the middle classes and indigenous people they have regarding a new Korea administration.
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Actually, fascinating that, again, we should all stand corrected, but then that's the way these things work out. It does seem to me very interesting, of course, The indigenous communities have that suspicion of Correismo and the authoritarian, let's say, management employed by Correismo. But it's a huge step for them to get behind Novoa, because you'd see them as a bit more allied, perhaps, to González's politics in that one. Even after what you said, I mean, ideologically, they're more aligned. wouldn't you say with Luisa Gonzalez?
- Speaker #1
Well, the indigenous movement is not homogeneous. On the one hand, you have the guy who took control of the indigenous movement as a slave, which is Yudidas Issa, who has staged a very strong challenges to constitutional governments, with the last three constitutional governments, and who is a leftist. He advocates the Indian Marxism, which was started by a Peruvian indigenous political philosopher. But then most of the indigenous people are not that ideologically oriented. And Novoa, you have to realize that, first of all, the Novoas have been in politics for some time. since the father of Daniel Navoa, Álvaro, was president, candidate for president several times, and on three occasions, he won in the first round and lost in the runoff against Mahuat and against Lúcio Gutiérrez and also against Correa. And also, there were all the time that Álvaro Navoa was running for president. His wife, Annabella, who's a doctor, and her father was Italian, she's tall, blonde, and she worked as a doctor and had all of these social services, medical services in communities. She would go with her, with ambulances and doctors and nurses that give medical services to poor people in the highlands and also the coast, and they loved her. the Minarist Noboa, so it's always done well in the Indigenous communities because of that. So in Indigenous communities you have on the one side the people that voted with Issa in the first round, not necessarily in the second round, and then you have the other people who said Noboa, his mother, has been very kind to us and I think this would be a very pleasant government. And then the The Korea side of a very repressive regime, we should not see it only on the negative side. He tried to put order. And what the oil companies told me at the time was that before Korea, if they were sending supplies to an oil field, to the workers in the oil field, people would attack the cars, the convoys, and take away the supplies. This was the Wild West. The Wild West, and Korea put order. So that's the other side of it. It's not only that it was in abuse, it was also putting order. and people felt they were being repressed because they could not do as they wanted. So there's two sides to Correa's repression, the positive side and the negative side. But also, as I said, the social programs from Anabela Simo, Novoa's wife, helped her son with the presidency.
- Speaker #0
It's very interesting that, again, the memory runs that far back as politics tends to be so ever-present. in the countries in which we are located. One concern, I believe, that's coming up at the moment and, of course, is threatening to undermine... would you call it the friendship or the, as you say, sort of marriage of convenience between the indigenous groups and the Noboa government is that of the National Solidarity Bill and it's the human rights concerns. Perhaps you could give us a little bit of background on this National Solidarity Bill.
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Well, we always have here in Ecuador, and I noticed in other countries too, Every government comes. We were concerned whether it's too authoritarian, or it is too weak. In the case of the previous government we had, which is the last administration, we tried to follow the rules and try to understand and give space to all other... of it. powers of the state and all the other branches of the state. At the end, he had to resign because he was going to be impeached for invalid reasons. The Constitutional Court and the Assembly were both against him. And Navarro tilts on the other side. So there is some concern, yes, that he is above the law because he's controlling the courts. He's moving to control the courts. and to reduce the rights, to tighten his control over rights. And that's true, but on the other hand, perhaps this tilt towards a slightly stronger government is necessary now. The constitution that we had under Correa Well, actually, that constitution that Correa set in 2008, and it is still the valid constitution in Ecuador now, of course, what the constitution said at the time, it didn't matter at all because we really had a dictatorship, but it tilts too much towards the right in the sense that judges close to the uh to uh or being bought by the uh by the criminal gangs which easily automatically decide that uh um criminals could be given um substitute measures and go home and be and behave and have to show up to the judges. once a month and would not take any time in jail. So sometimes you get a criminal being caught in the morning and in the evening he is shooting the police who caught him in the first place. So we've gone too much towards that side. In my particular concern, I'm really not that much concerned. regarding abuses of civil rights on the presidential administration, I think once he puts some order on crime, range crime in, I think it will be a time to start the pressing for relaxing his control over the courts. Perhaps it's going to be too late, but right now we have, very violent country with criminals being not controlled at all. And the things has to change. He has to change the judges, which are close to the criminal gangs. And this law allows him to do that. But of course, there's always the danger that he would just put just men and then he could violate civil rights.
- Speaker #0
Yeah, as you said, I mean, the weakened judicial institutions and the weakened, I guess, security institutions and so on keep this very much on the fore. I mean, it seems like a time, a good moment to jump into the ever present topic right now in Ecuador, of course, of that of security and insecurity. as you mentioned the criminal groups the their links to the drug Brit business and then of course their infiltrations within the security forces and I guess you know judges and so on in the pockets of those. How can Ecuador possibly or how can Noboa address this at the same time of trying to improve public security? It's all connected but from what I've been reading and listening to murder rates continue to be high even despite. the, let's say, almost militarization of much of the country. What is the situation right now in Guayaquil where you are?
- Speaker #1
Well, it's very dangerous. And in general, with Novoa's claim to solve, that he's going to be able to solve the violence situation pretty soon and in a short period of time with his campaign of having the armed forces engaged in the fight against crime. I think it's going to be very difficult for him to meet this goal because the criminal, the violence has not been solved in Colombia, has not been solved in Mexico, has not been solved in Rio de Janeiro. And I mentioned Rio, not Brazil, because in Brazil security matters are handled by states. It really works like a federal country, Brazil, which it is. them. And then the reason why we have so much crime in Ecuador is since Ecuador is the world's largest exporter of bananas. Bananas is a cheap product and makes a huge volume of exports to the point that the Guayaquil ports handle as much cargo, as much containerized cargo as Lima's port Callao, I mean, in Peru, more than double the size of Ecuador. And so it's very easy to hide drugs inside the banana shipments. So that's the reason why Mexican and Colombian cartels agreed to send some of their connections through Ecuadorian ports. In addition, this was helped by Correa, who brought in Farc into Ecuador and brought the local gangs, brought them into his government. And so right now to do... away with criminal activities, it's going to be very difficult. Criminal activity has very different compartments. One is fight between cartels for control. And we do have that. And a lot of the people who died are people who fight intra-gang fights and also the innocent bystanders. They go on and shoot people. at a cafe, some people get killed or kill somebody who is walking on the street. They also hit bystanders. That's one crime. Also, the clampdown on the drug trade means that these local gangs that have been organized by the Colombian and Mexican cartels also try to get more money out of the local population and start extortion rackets. spreading and that's very difficult to control. It's not only extortion brackets regarding big business, it's extortion brackets regarding poor people. For instance, a taxi driver, I used to get his services whenever I had to go someplace which was too much traffic to go there and I didn't want to be driving and seeing where to park and so on and so forth. He was shot a month ago. And he was waiting for his wife to come out from a medical facility. And the reason is that he had not accepted to pay, to be extorted. They were asking him to pay so much a week to them for as an extortion. The gangs that looked for him, he refused, so they shot him. And so we do also have that other crime. So things are very dangerous in Guayaquil. And people tend to restrain themselves to go out in areas which they feel comfortable in. And yes, it's one of the most dangerous cities in Latin America right now. And we're all all very concerned and we don't see yet how the government is going to be able to control that. It's very hard for us to evaluate what the government is doing to know how successful it's going to be. Now with this new law, And if this means that now he's going to be able to grab criminals and put them in jail, and he's building a higher security jail to be able to have these criminals to stop this. people from controlling their gangs from jail as they do presently perhaps is going to have some some success um but but so far i don't think he has had much success this year is uh more violent than last year okay
- Speaker #0
well it is his first full term it's his first full term there's still a significant period of time but again the figures are very much a concern the day-to-day life for everyone guayaquil and ecuador very much a concern and when we talk about the successful nature of uh militarization and campaigns it's all there are so many different factors to bring in and you'd say that the the recent capture of of the the leader fetal uh was that he escaped in january 2024 and was captured i guess it was a couple of weeks ago, you know, so late June or early July 2025. I mean, it was billed as a huge success, but of course it was an embarrassment that he got out. And this event overshadowed, of course, the escape of the leader Fede from El Itoral prison. So we sort of three steps forward, two steps back. And then we come back to that issue of the deep penetration of the illegal groups and the gangs into all of the different institutions. So President Nuboa is facing some serious challenges on this front. I mean, talk about a need to overhaul and really weed out corrupt elements within this. Do we... even see this as possible?
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Well, we have two goals which are sometimes are at odds. One is fight against crime and the other is have support for his policy against crime. And at first this may seem to be two things that go together and that's not so. For instance, capturing Fito is a success for the president in terms of the support of the population. He's doing something. He's cutting this big fish. He cut him, and he's probably going to deport him to the U.S. But, I mean, these people are not the geniuses behind crime. They are just cogs in a wheel. And Kvito got there because his predecessors were shot. And there are other people that are ready to get into his shoes. And in addition, probably there are two or three people who want that position in the Chornobyl. And therefore, we're going to have more violence in Turkmenistan. It's a gang between factions of the gang to see who gets control of the network and gets all the money Peter was getting. So in terms of actual success against gangs, I don't think this is much of a victory. It's mainly a public relations victory. And in addition, there is... Well, I cover very many different topics. We've mentioned one first and very many different topics, but I'm not necessarily an expert on them. And there is a political scientist, Benjamin Lessing, who has studied the case of Colombia, Mexico and Rio in particular, the three crises. And he claims that there are three goals which are very difficult to have success in simultaneously. One is to end violence, second, to end corruption, and third, to end the drug business. He says it's impossible. You have to settle for one. And the first one you have to settle is to control violence. And he says what you should do is have a conditional policy towards the gang, saying if you get into violence, we are going to repress you. But others are just into drug dealings. We're going to be more lenient. those because our first goal was to control drug control crime control violence and uh but that's not necessarily popular because people say they're doing nothing they're not they're not getting people in jail they're not killing uh criminals and in the end this the policy commerce abused that policy had to abandon it so uh i think this is coastal This is going to take a long time to solve and this is just as a to surmise if he really does not clamp down in violence enough and this keeps dragging on that may mean that he would lose his popularity. So I think it's yes this is the main challenge he's facing towards his is accessing this administration.
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- Speaker #0
Access Latin News' full portfolio of reports at www.latinnews.com. That's right. He stands or falls on the security issue. Let's talk about other things that are occurring in Ecuador. And we will focus a lot on the indigenous issues we focused a lot obviously on security all of these things do tether in to together with everything that's going on in ecuador um a major concern to to to the people are these massive power outages taking place perhaps
- Speaker #1
you could explain a little what's going on there please yes um the first point is that um Ever since the military came to power in the early 70s, at the time, the policy, the economic policy that was the consensus in Latin America was import substitution and a huge role for the state. at the time um a lot of people around the world felt that uh community style socialism was going to be what's coming next into the world that everybody was moving into that situation and then um we've had a very dominant situation of the state in the economy and uh of course the military military took over in the early 70s where oil's equator started producing oil and then when korea came in which is very much the same viewpoints, we also had a new increase in oil production. So he came out with a constitution that essentially said the state is going to build power generations and it's going to do it out of its own revenues and costs of power generation and they're going to be passed to the public. So as if we're going to believe forever on an economy running on oil revenues And that stopped less than 10 years after. the constitution was approved so what he did at the time is he spent a lot of money i mean actually took a lot of debt with china to have a power stations built and most are on on the amazon range in other words the end is to look and search the amazon and so uh he would say ecuador is one of the countries of the world that needs less thermal electricity it's mostly hydropower were being great now first of all those hydro plants uh many of them have huge problems uh and um and secondly um in the uh looking towards the uh to the amazon there have it has a a rain system in which during six months of the year uh they have very heavy rains you know six months they don't have rain at all so when they don't have rain at all um these are not uh uh power stations that have a huge dams reservoirs they mainly uh administrate the water that comes the flows of the river so when you have a dry season um regeneration goes falls down falls terribly and when you are on the high season when you have a lot of rains it rains so much that water comes murky it's muddy waters that uh clogs the power the power generation so they have to stop generation to clean the station so so the muddy waters won't hurt the engine. So it was a very bad idea to depend on this kind of electricity. So that's the situation we have now. And all the thermal power that we had at the time, they didn't build any.
- Speaker #0
New thermal units, thermal units were built in the 70s, so very obsolete thermal units in very bad shape. So Ecuador has been trying to solve this problem. But then they cannot ask for power generation, power companies to come in and build power stations as they have in Colombia, for instance, because the law requires that this station, the new power generator, has to sell to the state. Now, the state power company owns the utilities, and the utilities have the rate, the tariffs have a very low rate for low-income consumers, so they work at a loss. And so they don't pay to the state power generation company. So if a power generation comes in, They have to sell to clients that won't sell, won't pay them back. So you don't have private investment because of that. They say we need some kind of guarantee from the government that we're going to get paid. The government would pay if the utilities don't pay. So they haven't solved that problem yet. So it all depends on the government contracting new power units. And the government procurement process is slow. It's inefficient. And so we are running behind installing enough power generation to meet our needs. What the government has decided, on the one hand, is because the government says we're not going to have blackouts anymore, which I think we're going to have blackouts. But what the government is going to do is, first of all, is relying on the needs for a new power generation. partially been met. We don't have as much, the problems are going to be as serious as it was last year. But what he's going to do is going to cut power to business. It's not going to basically to manufacturing companies, to huge consumers. He's not going to cut generation to, he's not going to cut energy towards residential use, so it won't affect him. on his popularity front. He would still remain popular, but that's going to hurt the economy. So this is an issue we have right now. And he wants business to build their own generating plants. But that's a huge problem because he wants them to build generating plants for their own use, which they can only use whenever they're not being... sold energy by the state, not being supplied energy by the state, which is a very inefficient system. So we still have a huge problem, but it's now more concentrated on business more than on residential consumers.
- Speaker #1
It's hard for me to get my head around all that you just said and the complications of trying to untangle this. This is a multi-generational issue that will need to be addressed not just by President Noboa, but several successors to President Noboa. And him cutting back, I can understand the popularity side of things. You know, it's great optics not cutting power to people, but cutting to business and affecting the economy. You know, there are major challenges presently and ahead for Ecuador. or they've got a Big budget deficit, huge debt obligations, fiscal austerity measures have been agreed with the IMF. This issue with the power generation doesn't look entirely positive.
- Speaker #0
Yes, it doesn't. What they have to do, this is what I've been arguing, is they have to repeal this idea of a state monopoly. on the energy sector, which is not only on power sector, it's also in oil. And because then you're going to have international power companies coming in Tukador, talking to business, signing contracts, having secured the market, and come in and build new power units. And you could have solved the problem in a couple of years that way, but you have to have that solution and the government still has not moved in that direction. It's been addressing other matters such as security issues. but has not addressed the problem of how to allow private investment in power generation and in transmission he has to address that issue he still hasn't and and the other side of the problem is that um this is government is uh doesn't give much information out this is the time in which i have been the least have the least sources within the administration of what they're really thinking they're going to do we so um in that sense and we don't know if he is ready to open up power generation for private investment if he does he can solve the problem pretty easily relatively few years but otherwise this is going to continue and drag on for a long time.
- Speaker #1
This is where I see it all coming together. And sadly, the power generation not being resolved. There's no information from the government. Maybe they don't have a plan. Hopefully, there is some sort of plan. The power generation failing to be solved, the economy due to businesses being hit by this, leading to an instability socially and that feeding more into the insecurity in the country. All of these... these points do come together. Walter, how do you see the next six months to a year in Ecuador?
- Speaker #0
Well, we're going to have a short-lived improvement on the economy. On the one hand, business is much relieved by the fact that Navarro won the election after all his His family owns one of the largest business groups in Ecuador, Esperana Grower. Definitely, he's not going to follow anti-business policies. He may follow policies or take measures that business won't like, but not... anti-business by any means and so they may be looking towards increasing investment private investment in their businesses whatever they need in their businesses if gonzalez had won the election we would have a capital flight the substantial capital flight and this is not happening. Since the banks were ready towards So it's a possibility of Gonzalez winning the election and starting to issuing fake dollars, which is what they planned to do, and also shutting down the economy. Banks were building reserves that were trying to be very liquid, just in case you had to run on deposits and therefore they could stand an adverse economic and political situation. Right now, banks find themselves with a lot of funds in which they're paying interest on and which they have sitting in their coffers and they don't need to have so much liquidity at the time. So they are searching for businesses and consumers to take loans. So you have a tent. If you want to invest, banks will come to you and offer you money to invest. In other words, we do not have a... financial problems from that standpoint then the money that the uh that business the money that the government is spread among lower income people they went out and started buying food stuff buying uh cheap goods and services and that has come into the economy and also a private um exports are doing quite well of course most of all coco business which is very high prices of cocoa. Ecuador is the third largest exporter of cocoa in the world, which is far behind the two African countries at first and second. But still, cocoa exports now are on the same level than banana exports. And also we had a boom in shrimp exports. So Ecuador's non-oil exports are doing quite well. And that money has come into the economy. We have substantial reserves. in the banks for all the money from oil exports. So this is going to get into the economy. We're going to have some improvement in the economy in the short time, in the short while, but we're still missing an economic growth policy in the terms of the government. The government is still trying to be in good terms with IMF because IMF has been supporting the economic program with their loans. And so... Economic measures so far have been geared to improving the budget situation. So either measures to improve tax control, tax payments, but they're also about to issue a new tax legislation. So we're going to have an increase in taxes probably. Probably this will be sent this year to Congress, which President controls. totally and and this is going to be a new tax measures for next year so that's uh and what the government is aiming is for country risk to fall far enough so that he could issue new bonds in international markets new bonds not so much to increase debt but to be able to roll over our debt in international markets our chief debt problem is that the the bonds are coming due and uh the international markets don't want more equity in bonds so we have to do something similar to what uh similar in its aims not on its policies what uh mila issued in argentina to get argentina back in international markets that's that was his striving for now but so far uh he's improving the uh the uh the the government's budget situation but uh It's mainly at the expense of our business expenditures, which is growing. And therefore, this is not helping the government to grow, because essentially, the budget problem, the long-term solution is having economic growth. If you have economic growth, you're going to be able to have more revenues without increasing taxes. And this we're not achieving. We're so far achieving more money. coming into the government from the economy so we could attend our public debt mainly it's external debt and that means essentially taking money out of the local economy to pay foreigners so this doesn't help so it's a current situation and we still this is a new administration after all he was just uh preparing for for this new period during the time he was finishing lasso's period but um the midterm uh um goal of the guadalcanal economy's uh perspectives in the midterm are not much more than two 2.5 percent of economic growth a year which is too low but in the in the short time in the next six months we could have is slightly better because of the conditions i just mentioned uh short term short term uh positive long-term concern
- Speaker #1
i think uh we could put that done Walter, thank you so much for your time. I think we'll bring this to an end here. We've covered so much of what's going on in Ecuador and looking at the obviously the key issues of the economy, power outages, the indigenous, indigenous, let's say, concerns and of course, and of course, insecurity and security in Ecuador. This has been the Latin News Podcast. I've been Richard McColl talking to Walter Spurrier, who is an economic analyst. He's got a background in political science, director of the Political Economic Report Weekly Analysis or Analysis Semanal, is also an editorialist for the Diario El Universo in Ecuador. Thank you so much for your time and sharing what seems to be a, well, in the knowledge without end on Ecuador.
- Speaker #0
Thank you very much, Richard. And I'll do everybody linked to the Latin post.
- Speaker #1
It's been an absolute pleasure. Remember, we'll be back in a couple of weeks time discussing further topics from the region with experts in their fields. Bye bye.
