Ecuadoreans vote for president; austerity-weary nation leans toward socialism
By Alexandra Valencia and Brian Ellsworth
QUITO, Feb 7 (Reuters) - Ecuadoreans choose a new presidenton Sunday, with many voters weary of painful economic austeritymeasures and eager for a return to socialism, encouragingleft-wing candidate Andres Arauz who hopes to win withoutneeding a runoff vote.
The 36-year-old economist, a protege of former presidentRafael Correa, leads in polls on promises to make $1 billion indirect cash payments to families and to disavow the conditionsof a $6.5 billion IMF financing package.
His main rival, Guillermo Lasso, has been hurt by his imageas a conservative banker, and pollsters say the possibility oflow voter turnout due to the pandemic could dent his support.Lawyer and indigenous activist Yaku Perez is third in the polls.
An Arauz victory would extend Latin America's return toleftist policies, already evident in Argentina and Bolivia, achallenge for Washington as it duels with China for influence inthe hemisphere.
"We have to continue convincing (people), so that ... ourvictory, the victory of hope, will be in a single round," Arauzwrote on his Facebook page on Friday.
"Let's do this right away."
A brutal coronavirus outbreak last year left bodiesuncollected on the streets of Ecuador's largest city, Guayaquil.Lockdowns around the world slashed fuel demand and prices foroil, Ecuador's main export, battering an economy also reelingfrom sharp cuts to government spending.
President Lenin Moreno, a former Correa ally, drove apro-market agenda on hopes of reviving a sluggish and heavilyindebted economy. His efforts sparked an angry backlash, with 10days of violent street protests in 2019 against a planned fuelprice hike.
Ecuadorean law makes voting mandatory and applies a $40penalty for abstention.
Middle class voters who favor Lasso may be more likely topay the fine to avoid coronavirus exposure, while low-incomevoters that lean toward Arauz have greater incentive to votebecause they are less able to afford the fine.
Pollsters in recent days have started to see a slightlygreater likelihood of Arauz winning a single round. Arauz alliesare expected to make a strong showing in voting for a newlegislature.
Financial markets are watching, and Arauz's rhetoric hasalready sparked a bond selloff.
He has said he will continue paying the country's debts, buthas said social investment will take priority and also hascalled for an investigation of last year's $17.4 billion bondrestructuring.
Arauz's mentor, Correa, used nearly identical rhetoricduring his 2006 election campaign. His government quicklydefaulted on bonds and then bought them back at a discount.
Last month, Ecuadorean bonds were the worst performers amongthe JPMorgan EMBI Global Diversified index, with a -15% totalreturn.
To win in a single round, Arauz needs more than 50% of validvotes, or 40% total with 10 percentage points more than therunner-up. Otherwise, a runoff vote will be held on April 11.
Perez, third in opinion polls, is running on an anti-miningplatform, vowing to protect watersheds from pollution.
Also, the city of Cuenca will vote in a referendum onwhether to ban mining around any of the rivers that go throughthe city. This could spook mining companies already contendingwith opposition from indigenous activists.(Reporting by Alexandra Valencia, writing by Brian Ellsworth;Editing by David Gregorio)
