Ecuador - Direct Military Rule, 1972 79

Direct military rule, 1972-79

The military regime called itself "nationalist and revolutionary," but the well-known connections of Rodríguez Lara to the Guayaquil business community signaled disappointment for those who anticipated that he would head a progressive military regime such as was ruling in Peru at the time. It shortly became apparent that, ideologically, the Rodríguez Lara regime was a hybrid, reflecting a tenuous equilibrium among the widely divergent political tendencies within the Ecuadorian armed forces. Nevertheless, like the contemporary Peruvian and Brazilian regimes, the regime of Rodríguez Lara, he promised, would not be an interim government, but rather a long-term venture dedicated to introducing structural changes thought necessary to unfreeze the development process.

Rodríguez Lara's regime gave early emphasis to a campaign designed in part to exert firm control over the nation's petroleum resources and in part to consolidate the government's political authority. Several former political leaders, including ex-President Otto Arosemena, were tried for corruption in connection with oil concessions granted during the 1960s. In addition, a large number of functionaries of the Velasco government, supporters of Bucaram, as well as drug traffickers, legitimate importers, and customs officials were charged with corruption and "illegal enrichment." Although it thus assailed its major opponents from the start the military regime, however, failed to build its own civilian base of political support.

Promises of a "meaningful agrarian reform" under the auspices of Minister of Agriculture Guillermo Maldonado, a dedicated reformer, were frustrated by intense opposition from traditional elites. Maldonado was eventually forced out, and by the end of Rodríguez Lara's four years in office less than 1 percent of Ecuador's cultivable land had changed hands under the reform. More notable achievements came in the areas of building infrastructure projects, such as the major oil refinery and petrochemical complex in Esmeraldas; various highway and electrification projects; and state capitalist enterprises, particularly the Ecuadorian State Petroleum Corporation (Corporación Estatal Petrolera Ecuatoriana-- CEPE). The lateter corporation was founded in 1972 and grew to become the major actor in Ecuador's exploitation of its oil reserves.

Oil policy was the regime's vehicle for its most forceful expression of nationalism. Minister of Natural Resources Gustavo Jarrín Ampudia presided over Ecuador's 1973 entry into the Organization of Petroleum Exporting Countries (OPEC), with all its attendant prestige and economic benefits. He was also responsible for Ecuador's renegotiation of a number of oil concessions, including the key Texaco-Gulf concession in the Oriente, on terms much more favorable to the state, such as substantial increases in both the royalties paid by foreign firms and the tax rate they paid on petroleum exports. These efforts were initially successful in allowing the government to retain a larger share of Ecuador's petroleum earnings.

The oil companies became increasingly disconcerted, however, when Jarrín proposed in late 1974 that the share of stock in the Texaco-Gulf subsidiary held by CEPE be increased from 25 to 51 percent. Claiming that the terms of their concessions negotiated with Jarrín had priced Ecuadorian oil beyond the world market price, the oil companies cut back drastically on their exports, at a cost to the government of hundreds of millions of dollars over the following nine months. This intense financial pressure finally led to a July 1975 announcement that taxes on the oil companies' exports were being reduced. It was thus clear that the military regime had overplayed its nationalistic oil policy, having failed to keep in mind that Ecuador was, after all, a relatively small oil producer and thus not a powerful player within OPEC.

The moderation of the regime's oil policy, however, did not result in the anticipated resolution of mounting economic problems. Oil exports rose only slightly, while imports, particularly of luxury items, continued to soar, aided by a low-tariff policy that had been designed to soak up petroleum earnings, and thus control inflation. In excess of 22 percent during 1974, inflation was rapidly eroding the real value of wages within the middle class.

In August, in an effort to resolve its balance-of-payments difficulties, the regime decreed a 60 percent duty on imported luxury items. The measure was condemned by the Chambers of Commerce in Quito and Guayaquil, whose constituents had grown dependent on the sale of imports, and caused, a week later, a bloody attempt led by the chairman of the Joint Chiefs of Staff, General Raúl González Alvear, to overthrow Rodríguez Lara. Although this coup attempt failed, at a cost of twenty-two lives, on January 11, 1976, a second, bloodless coup was successful in removing Rodríguez Lara. He was replaced by a Supreme Council of Government consisting of the commanders of the three armed services.

Virtually the only item on the agenda of the new military triumvirate was to preside over a return of the government to constitutional, civilian rule. The bloody September 1975 coup attempt had revealed the depth of the breach in the institutional unity of the armed forces. Handing the government back to civilians, it was hoped, might remove the causes of divisions within the military, or at least make it easier to hide them from public view.

The original timetable, announced in June 1976, called for a transition that was to culminate in presidential elections in February 1978. First, new government charters and electoral laws were to be drafted by appointed commissions, and then a public referendum would choose between two proposed constitutions. The transition was repeatedly slowed down, however, and in the end, instead of the less than two years originally scheduled, three years and eight months elapsed between the 1976 coup and the inauguration of a civilian president.

Two reasons are commonly cited for the delay: the slowness of decision making within the Supreme Council of Government because of ongoing disagreement within the military high command and repeated maneuverings by the military government to manipulate the electoral process, thereby controlling its outcome. Like the Rodríguez Lara government, the Council was particularly interested in seeing a poor electoral performance by the CFP and, especially, preventing Bucaram from winning the presidency.

The national referendum to choose the constitution was finally held on January 15, 1978. The results saw 23 percent of the voting population nullify their ballots, an action that had been advocated by the traditional right; 31 percent of the population voted in favor of a revised version of the 1945 constitution, and a plurality of 44 percent voted in favor of the newly drafted national charter. The charter was the more progressive of the two constitutions, its major reforms being the acknowledgement of a role for the state in socioeconomic development, the legalization of a worker self-managed (autogestional) sector in the economy, a unicameral legislature, no presidential reelection, and, for the first time in Ecuador, electoral suffrage for illiterates.

Five candidates then campaigned for the presidency. The consistent favorite in polls was Rodrigo Borja of the social democratic Democratic Left (Izquierda Democrática--ID). Because the Supreme Council of Government made sure that Bucaram was barred from running, the CFP strongman named his second in command, Jaime Roldós, to be the party's candidate. In order to broaden the appeal of the ticket, Osvaldo Hurtado, the leader of the Christian Democratic Party (Partido Demócrata Cristiano--PDC), was tapped to be Roldós's vice presidential running mate. The traditional rightist vote was split between two candidates, and the various parties of the Marxist left coalesced to name one candidate. After a lengthy recount, the final results of the July 16 election confirmed the initial tally of a surprise victory by Roldós, with 27 percent of the national vote. Sixto Durán Ballén, candidate of a coalition of rightist parties, finished second with 24 percent. The electoral law mandated that when no candidate achieved a majority vote, a run-off election between the two top finishers be held.

It was more than nine months before the second-round election took place, however. They were months of considerable political tension and doubt as to whether the transition would proceed as planned. First, widespread problems in organizing the election and in the vote count during the first round left serious doubts as to the competence and honesty of the electoral authorities. The Supreme Electoral Tribunal (Tribunal Superior Electoral--TSE) was, as a result, completely reorganized. Second, the government-- remembering a campaign slogan calling "Roldós to the government, Bucaram to power"--was understandably dismayed with results of the first-round election. By delaying the second round, the government sought to give rightists the time to build an anti-Roldós coalition under which Durán could emerge as the second-round victor. To complicate matters further, Abdón Calderón Múñoz, a populist candidate who had won 9 percent of the vote in the first round, was murdered under circumstances implicating the government. Finally, as a further distraction during this difficult period, Velasco returned from exile to bury his wife and died in March 1979 at age eighty-six.

The second round was finally held on April 29, 1979, with the Roldós-Hurtado ticket sweeping to an overwhelming 68.5 percent victory against a weak performance by Durán. Doubts persisted, however, up to the moment that the winners took office three months later, that the military would allow them to assume their duly elected offices. The size of their popular mandate and, according to political scientist John D. Martz, pressure from the administration of President Jimmy Carter in Washington made it difficult for the military to stop the "democratization" process at this late date. The military did extract as a price, in any case, unprecedented powers to name representatives to the boards of directors of major state corporations and to participate directly in the naming of the minister of defense. The outgoing government also made it clear to Roldós (who had an early campaign slogan of "we will not forgive, we will not forget") that it would not tolerate any investigation into the behavior of the military with respect to human rights. With his autonomy thus diminished, Roldós finally assumed the presidency on August 10, and thus Ecuador returned to constitutional, civilian rule after almost a decade of dictatorship.

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