VZCZCXYZ0160
OO RUEHWEB

DE RUEHQT #0768/01 0892215
ZNY CCCCC ZZH
O 302215Z MAR 07
FM AMEMBASSY QUITO
TO RUEHC/SECSTATE WASHDC IMMEDIATE 6704
INFO RUEHBO/AMEMBASSY BOGOTA PRIORITY 6566
RUEHCV/AMEMBASSY CARACAS PRIORITY 2483
RUEHLP/AMEMBASSY LA PAZ MAR 0526
RUEHPE/AMEMBASSY LIMA PRIORITY 1547
RUEHGL/AMCONSUL GUAYAQUIL PRIORITY 2131

C O N F I D E N T I A L QUITO 000768 
 
SIPDIS 
 
SIPDIS 
 
TREASURY FOR STEVE GOOCH 
 
E.O. 12958: DECL: 03/30/2017 
TAGS: ECON PGOV EC
SUBJECT: PRIVATE SECTOR RESPONSE TO PERCEIVED CORREA THREAT 
 
 
Classified By: Ambassador Linda Jewell.  Reason:  1.4 B and D 
 
¶1.  (C) Summary.  The usually fractious Ecuadorian private 
sector has begun to develop what could become a cohesive 
response to what it perceives as threats from the Correa 
administration.  This effort, led by Guayaquil-based figures 
and supported by the leading business chambers, has two main 
elements:  projecting a positive message emphasizing 
 
democratic and economic principles, and supporting candidates 
for the Constituent Assembly that share their vision.  End 
summary. 
 
Broad Private Sector Concern about Correa 
----------------------------------------- 
 
¶2.  (C) A number of Ecuadorian private sector contacts have 
approached the Embassy and Consulate to air their concerns 
about President Correa's political and economic intentions. 
Mostly, the concerns have been heartfelt but lacked 
specificity.  The most common theme is that Correa intends to 
follow Chavez's model of "21st Century Socialism" by 
increasing presidential control over other democratic and 
economic institutions, but there is great uncertainty over 
actual measures Correa would seek to implement.  When asked, 
many did not have a well-formed idea of how to respond to 
Correa's approach or what alternative policies they would 
offer a populace that clearly wants change.  Typical of a 
tradition of looking to others to do their heavy lifting, 
some hope and urge that the United States will take a leading 
role in challenging Correa's policy.  We have emphasized the 
importance of domestic sectors working toward consensus and 
offering responsible alternatives as a necessary 
pre-condition before any international engagement can be 
truly effective. 
 
Establishing a Systematic Private Sector Response 
--------------------------------------------- ---- 
 
¶3.  (C) Guillermo Lasso, President of the Banco de Guayaquil, 
on March 12 briefed the Ambassador on a systematic effort he 
is coordinating to develop a cohesive private sector response 
to the Correa administration's policy.  A group that he had 
formed, Ecuador Libre, has worked with former El Salvadoran 
President Francisco Flores to analyze the risks that Correa 
administration might take.  He stressed that the analysis was 
completed before Correa took office, and noted how the 
threats are now indeed being realized.  The four threats that 
Ecuador Libre identified are:  manipulation of democratic 
institutions, increased state control of the economy, 
promotion of violence and class hatred, and replication of 
Venezuela's "comites familiares" to facilitate control at the 
local level. 
 
¶4.  (C) Lasso said that he had shared the analysis with the 
business community in meetings with the Chambers of Commerce 
and Industry in Quito, Guayaquil, and Cuenca.  Initially the 
business contacts were nervous about doing anything, but one 
by one they called him to sign up to an effort to counter 
Correa's policies.  Lasso said that the business community's 
approach is to challenge the Correa administration on key 
principles, and not to defend particular interests.  Lasso 
said the key messages will stress the importance of economic, 
political and individual freedoms.  He also said that the 
business community is developing "tactical fronts" to analyze 
developments and develop a private sector response. 
 
¶5.  (C) Lasso said that he also talked to opposition leaders 
Lucio Gutierrez (former president), Alvaro Noboa 
(presidential runner-up), and Jaime Nebot (mayor of 
Guayaquil), but there are real limits to working with these 
political leaders.  Gutierrez is willing to work with the 
business community, but only on his terms.  According to 
Lasso, Noboa does not understand what is going on in Ecuador. 
 Nebot is the smartest of the three, but has chosen to frame 
his role as defending local Guayaquil interests (e.g., the 
status of the Guayaquil port), rather than seeking the mantle 
of leader of the national opposition to the Correa agenda. 
 
¶6.  (C) Lasso reported that the business community had 
launched one series of radio spots, which featured a 
Venezuelan voice discussing the situation in Venezuela and an 
Ecuadorian voice responding that she would not want the same 
situation to develop in Ecuador.  He also cited the spot as 
an example of how the Correa administration will attempt to 
exercise control ) he said that the government called up the 
radio stations and told them to pull the spots (although it 
lacked legal authority to do so) and that the company that 
designed and placed the spots quit out of fear. 
 
¶7.  (C) Lasso shared another example of the Correa 
administration's effort to exert control.  He said that Lucio 
Gutierrez identified Lasso as a possible candidate for the 
Constituent Assembly, without consulting with Lasso. 
Following Gutierrez's announcement, Correa's chief of staff, 
Vinicio Alvarado, called Lasso to report that Correa did not 
appreciate hearing Lasso,s name associated with a potential 
run for the constituent assembly. 
 
¶8.  (C) Lasso said that when the government learns of the 
private sector's efforts, it will respond with a "hard blow." 
 He did not ask for extensive support from the Embassy, 
except to request that the USG echo the private sector's 
appeal for individual freedoms should the private sector come 
under fire from the government. 
 
Positive Message, Not Confrontation 
----------------------------------- 
 
¶9.  (C) In a meeting with the Ambassador on March 27, three 
newly elected officials of the Pichincha (i.e., Quito) 
Chamber of Industries (President of the Board Francisco 
Roldan, Vice President Diego Fernandez-Salvador, and 
Executive President Sebastian Borja) echoed the same themes, 
although they did not make any reference to an organized, 
Ecuador-wide business response to Correa.  They said that 
they would seek to avoid confrontation with Correa, which 
would only increase his popularity.  Instead, they would 
pursue a positive message focused on democratic and economic 
principles. 
 
Principled but Provocative Ad 
----------------------------- 
 
¶10.  (U) On March 30, the Guayaquil Chamber of Commerce 
published an advertisement directed at Correa, entitled "No, 
Mr. President."  The ad said that any member of the Chamber 
that demands respect for his or her rights is not an enemy 
but an Ecuadorian, and demanding liberty of association, 
expression, judicial security and other basic rights is not 
opposition, but a way to build the country. 
 
¶11.  (C) Maria Gloria Alarcon, President of Guayaquil Chamber 
of Commerce, told the Ambassador on March 29 to look for the 
advertisement.  She said the Chamber was placing the ad on 
Friday in hopes of provoking a strong reaction by Correa 
during his Saturday radio show.  Alarcon said that polling 
shows that Ecuadorians do not like Correa's aggressive 
attacks, which lower his popularity.  Thus the ad has the 
double purpose of presenting a positive message while 
potentially getting Correa to respond inappropriately. 
 
Business Delegates for the Constituent Assembly 
--------------------------------------------- -- 
 
¶12.  (C) Alarcon and Miguel Pena, President of the Guayaquil 
Chamber of Industries, told Econcouns on March 14 how the 
business sector plans to address Correa's call for a 
Constituent Assembly.  (Both stressed that the information 
about the private sector's plans to support delegates for the 
Constituent Assembly should be carefully protected.) 
 
¶13.  (C) Miguel Pena said that one of his biggest challenges 
is to calm his nervous members and urge them to deal with the 
Correa administration in a rational manner.  Regarding the 
Constituent Assembly, he said that the business community is 
not planning to run its own candidates but is beginning to 
identify candidates whom it could support. 
 
¶14.  (C) Maria Gloria Alarcon said that she views the 
Constituent Assembly as inevitable, and noted that an 
internal poll of her chamber's membership showed a surprising 
68% supported the Assembly.  However, she said, the business 
community intends to raise questions in the public mind about 
Correa's objectives for the Constituent Assembly ) she 
mentioned the radio spots, and said the business community is 
also planning to place television ads.  She echoed Pena in 
saying that the business community is examining candidates 
for the Constituent Assembly, saying that it is a careful 
balancing act of identifying candidates who can win votes, 
have the right views on constitutional changes, and are 
sufficiently strong to resist pressure and overtures from the 
Correa administration.  She said that whomever business 
community decides to support will "have a lot of money" to 
support their campaign. 
 
¶15.  (C) Alarcon also said that candidates opposed to 
Correa's vision for the Constituent Assembly would have to 
win a sizeable majority, since if there were only a small 
majority, the Correa administration "has so much money" that 
it could win over a few members of the opposition.  Finally, 
she said that the business community has talked to opposition 
parties, such as Noboa's Prian, Nebot's PSC, and Gutierrez's 
PSP.  The parties currently say that they would work together 
with the business community, but Alarcon was skeptical that 
they would remain cohesive during the campaign for 
Constituent Assembly delegates. 
 
¶16.  (C) Alarcon asserted that Ecuador is not Venezuela, 
noting that Venezuela does not have a "Guayaquil" to serve as 
a bastion of opposition to the government's policies.  In 
contrast, she said, Bolivia does have its "Guayaquil" (in 
Santa Cruz), implying that opponents of radical change in 
Ecuador would be able to stymie Correa's more radical agenda. 
 
Comment 
------- 
 
¶17.  (C) Traditional leaders of the Ecuadorian business 
community are deeply concerned with the possible direction of 
the Correa administration's economic and political policies. 
They are also very frustrated with their limited access to 
the Correa administration, blocked from exercising "politics 
as usual" in guiding policy-making (often to advance 
particular rather than national interests). 
 
¶18.  (C) Ecuador's business community is as fractious as 
Ecuador's political system, with divisions across industries 
and regions.  Concern about Correa's policies seems to have 
pulled much of the business community together, although the 
number of individuals who are well informed about the effort 
appears to be limited given the desire to maintain 
confidentiality.  We perceive that Guayaquil businesses may 
 
SIPDIS 
be more committed than those of other regions to this unified 
business sector response, and since the Sierra business 
community often defines its interests in opposition to 
coastal initiatives, it could be hard to maintain a national 
coalition.  Therefore we wonder whether this alliance will 
hold under pressure and as the election for Constituent 
Assembly delegates progresses. 
 
¶19.  (C) Up to now, the business community's focus on 
democratic and economic principles and supporting delegates 
for the Constituent Assembly appears to be a responsible 
reaction to the uncertainty regarding the future direction of 
the Correa administration.  Given the current weakness of the 
established opposition parties, systematic business support 
(if it actually happens) for delegates to the Constituent 
Assembly may be a key element in generating diverse 
representation in the Constituent Assembly and a broader 
perspective towards reforming the Constitution that balances 
competing interests. 
JEWELL