ECUADOR - - ITS PROBLEMS AND PROSPECTS

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79T00826A002000010022-9
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 13
• Document Creation Date: December 16, 2016
• Document Release Date: July 25, 2002
• Sequence Number: 22
• Publication Date: May 22, 1967
• Content Type: IM

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Secret
DIRECTORATE OF
INTELLIGENCE
Intelligence Memorandum
ECUADOR--ITS PROBLEMS AND PROSPECTS
Secret
,2 L3
22 May 1967
No. 1112/67
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WARNING
This document contains information affecting the national
elefensc of the United 'itates. within the meaniirog of Title
18, sections 793 and 794, of the US Code, as amended.
Its transmission or revelation of its contends to or re-
ceipt by an unauthorized person is prohibited by law.
GROUP I
EXCF.UOEO }ROM AUTOMATIC
.IONN [lA[)INC ANG
CF l4 SIFICATIOY
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CENTRAL INTELLIGENCE AGENCY
Directorate of Intelligence
22 May 1967
INTELLIGENCE MEMORANDUM
Ecuador--Its Problems and Prospects
Summary
Ecuador is one of the most politically un-
stable and economically backward countries in South
America. For the past year, the country has been
engaged in a precarious effort to re-establish con-
stitutional rule through the mechanism of a con-
stituent assembly. Elections are set for June 1968,
with the new government scheduled to take office
the following September. In the meantime, the re-
public will continue to be ruled by a weak interim
government headed by the provisional president,
Otto Arosemena Gomez.
The task of governing this volatile country
has always been a difficult one, and it will continue
to be so. Arosemena's government is continually
saddled with labor unrest stemming from a myriad of
economic problems, an undisciplined student element,
and the irresponsibility of political leaders and
parties. Essentially a caretaker chief executive,
Arosemena has neither the mandate nor the political
power to correct Ecuador's ills.
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Ecuadorean Politics--Bravado in a Vacuum
1. Since gaining independence in 1830, Ecuador's
history has been characterized by a succession of
dictators, military juntas, intense regional rivalries,
and constant socioeconomic and political chaos. In
137'years there have been 48 elected presidents, only
a few of whom have served full four-year terms.
Ecuador has had 16 constitutions and the seventeenth
is currently being written. Since 1960, Ecuador has
not had a government capable of retaining popular
support. Civilian governments were overthrown in
1961 and 1963, and a military junta gave up in March
1966 under intense public pressure and after a suc-
cession of bloody demonstrations. In 1966 alone,
there were three different governments: a military
junta, an interim government headed by Guayaquil
businessman Clemente Yerovi Indaburu (April to Novem-
ber), and the provisional constitutional government
of Otto Arosemena Gomez (November to the present).
2. Even more than most Latin American countries,
Ecuador has conspicuously failed to develop responsible
political institutions or leaders. There are only
two real political parties, the Conservative and the
Liberal. All the rest--and they are numerous--are
ad hoc political groupings that rise and fall with the
political fortunes of their leaders. Neither the
parties nor the movements can command nation-wide sup-
port, nor are they able to achieve political dominance
by themselves. Therefore, flimsy political alliances
and temporary pacts of convenience are commonplace,
born out of back-room maneuvering and bargaining.
3. What differentiates the parties from the
movements and groups is their longevity, historic
role, and more formal organization. Ideology tends
to be vague or nonexistent among all. A Liberal
Party leader commented before the constituent assembly
elections in October 1966, for example, that his
party did not have "time" to write out its ideological
platform. A reading of party pronouncements produces
only confusion. Almost all bemoan Ecuador's under-
development and current economic difficulties, and
most support the broad aims of social justice and
economic progress, but none spell out specific pro-
grams.
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4. The parties and movements are as lacking in
organization and finances as in policy. Generally
speaking, they come to life only at election time when
funds are more plentiful. Moreover, the national
leadership of the various parties often does not ex-
ercise effective control over the provincial branches.
Thus, the Liberals in Quito and the Liberals in
Guayaquil often are so ill-coordinated as to seem two
entirely separate organizations.
5. The dominant factor in Ecuadorean politics
is personalismo, i.e., the adherence to a leader be-
cause o1 is--s --- c-Sarisma, his manliness, his honesty,
his forceful speaking ability, and perhaps his Ca-
tholicism. Personalismo runs so deep that demagogues
such as Jose Maria Velasco Ibarra can occupy the
presidency four different times and try for a fifth
despite having been thrown out of office on three
occasions by popular acclamation. Personalismo al-
lows I lex-Presi-
dent Carlos Julio rosemena (Otto 's cousin to wield
tremendous power in the constituent assembly despite
a complete lack of popular support. Otto Arosemena
knows the importance of personalismo in Ecuadorean
politics, and he sought to cuTtivafhis own with
his performance at Punta del Este.
6. All the bravado, the confusion, and the ir-
responsibility that is Ecuadorean politics is conducted
in an atmosphere of widespread public cynicism and
apathy. The irresponsibility breeds cynicism and
apathy, the cynicism and apathy breed irresponsibility.
The end result is political stagnation.
The Rise of Arosemena
7. When the junta fell on 30 March 1966, there
was nothing to take its place. Businessmen, politicians,
and military leaders got together and decided that
the best way to restore constitutionality was through
the mechanism of a constituent assembly. Until the
assembly could be elected and installed, however, a
provisional government was needed, Clemente Yerovi
Indaburu, a successful Guayaquil businessman, was chosen
to organize a government, and this he did quickly and
effectively. The primary duty of the Yerovi administra-
tion was to see that elections for a constituent as-
sembly were held. After some delay for lack of funds,
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the assembly elections were held on 16 October.
Sixty-seven delegates were elected by direct popular
vote; 12 delegates, called functional deputies, had
been elected indirectly earlier to represent various
professional and economic interests. The 79-man as-
sembly was installed on 16 November and elected Otto
Arosemena Gomez as "Interim Constitutional President
of the Republic." Yerovi turned over his powers to
Arosemena on 17 November.
8. Arosemena emerged from relative political
obscurity to national prominence virtually overnight.
In the constituent assembly elections, Arosemena's
own minuscule political movement, the Democratic In-
stitutionalist Coalition (CID), won but three of the
67 seats. The CID received only 20,000 (13 percent)
of the votes in Guayas (Guayaquil) Province, the only
province in which it ran candidates and in which it
has any semblance of popular support. The manner in
which Arosemena parlayed these three votes into the
presidency is a good example of the vagaries of Ec-
uadorean politics.
9. Three political blocs had emerged from the
October voting: the center-right bloc composed of
Conservative Party delegates and their long-time al-
lies, ex-President Camilo Ponce's Social Christian
Movement; the center-left bloc composed of Liberal
Party delegates and assorted leftists; and an "inde-
pendent" bloc of persons of all political hues who
were not committed to either of the other two blocs.
The Conservative-Poncista bloc was the strongest, but
did not have the required 40 votes to elect its can-
didate, Ponce, as interim president. They therefore
looked for a compromise candidate and found Arosemena.
A deal was struck whereby Arosemena got the presi-
dency in exchange for an agreement to support Ponce
in the next election and to include a number of Con-
servatives in his government.
10. Arosemena had been a militant Liberal most
of his young life, and had served in both houses of
congress from that party. In recent years, however,
he had become more conservative, and wealthy Ecua-
doreans considered him "middle-of-the-road." In De-
cember 1965 he organized his own political movement,
the CID, drawing into it a mongrel group that included
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several former extreme-leftist sympathizers and fol-
lowers of ex-President Jose Maria Velasco. Despite
this, he drew his principal support from the oligarchic
ruling class, and had financial backing from Guayaquil
banking and business interests.
11. Arosemena was born in July 1925 in Guayaquil
into a family with a well-known name but only moderate
means. In 1954, when he was only 29 and still a law
student, he was elected to congress where he soon es-
tablished a reputation for violent opposition to the
Conservatives. In the 1956 presidential elections he
campaigned actively in support of the Liberal Party
candidate. Three days after the Cpnservative Party
candidate, Camilo Ponce, was elected, Arosemena was
arrested on charges of conspiring against the elec-
tions. By September 1956 Arosemena was adopting a
new conciliatory approach to the Conservative Party.
In August 1957 he was elected president of the lower
house.
12. In 1960 Arosemena was elected "Functional
Senator for Commerce from the Coast." He was for a
time an ardent supporter of then-President Jose Maria
Velasco, but later became directly involved in the
rebellion that forced Velasco out of office in 1961
and installed Arosemena's cousin, Carlos Julio Arosemena,
as president.
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Arosemena's Current Problems
14. Arosemena's ascendancy to the presidency
caused considerable political fireworks. The Lib-
erals cried foul and charged him with selling out
to the oligarchy. Although he wanted a cabinet of
"national conciliation," no Liberals would accept
appointment for fear of being thrown out of their
party. Demonstrations were organized against the
new President, and the police and army had to be
called out on a number of occasions to maintain law
and order. Arosemena's collapse was expected at
any moment, but he held on because the left-of-
center was not quite strong enough to topple him
and because the military was not about to take on
the responsibility of governing again so soon. He
nevertheless was on extremely shaky ground, and
not until February--when he was able to get an ex-
tension of his term until 1 September 1968--was his
position fully consolidated.
15. Since that time, Arosemena's major prob-
lem has been with labor. Hardly a week goes by
without a strike in some part of the country. Most
are based on wage grievances, but many are "civic
strikes"--incidents where the entire town or prov-
ince will strike to protest alleged government in-
action on local problems. In many cases the strikes
have degenerated into violence, such as that of 11
and 12 May in Guayaquil during which three persons
were killed and scores injured in clashes with the
police and army.
16. A good deal of the strike activity is di-
rected at pressuring the constituent assembly, which
is also acting as a unicameral legislature, into
action on bills under consideration or proposed b
various interest groups.
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17. Most of the assembly's work in the legis-
lative field has consisted of investigating the
activities of the former military junta. As a re-
sult of its zest to reveal all the "misdeeds" of
the junta, the prestige and morale of the Armed
Forces have sunk to a new low. The former junta
members have been stripped of all honors, status,
and respectability, and two of them recently took
political asylum and fled into exile to escape
further humiliations and possible imprisonment.
Another of the more celebrated "investigations" of
the assembly was the one into the 1964 "secret modus
vivendi" between the military junta and the United
States. The bilateral agreement in question eased
restrictions on US vessels fishing within Ecuador's
claimed 200-mile territorial sea. It had been
abrogated even before the assembly was chosen, but
some delegates deemed it necessary to go into the
whole matter. The issue caused a wave of national-
ism and anti-Americanism in the assembly. As a
result, Ecuador enacted even stronger claims to its
200-mile territorial sea. The 200-mile limit is a
constant source of friction between the US and
Ecuador, and there is little likelihood that rela-
tions over this issue will improve over the near
future.
18. At the moment, the assembly is about a
month away from completing the new constitution.
Over-all, it has done a creditable job in this re-
spect, and it appears that the new constitution
will be an improvement over the old in terms of
political reality and social justice. Oncethe as-
sembly sessions end--probably in mid-June--op-
portunistic politicians will be deprived of an easy
forum.
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The Outlook
19. At the moment, Arosemena has no serious
rival for power. He should manage to finish out
his term, barring an economic collapse or a ser-
ious breakdown of law and order. The armed forces,
however, remain the most powerful group in the
country and are essentially the key to continued
political stability. Military prestige suffered
greatly during the last days of the military junta,
and senior officers are loath to reassume the mantle
of office at this point.
Military leaders strongly believe, o ,
a it is their duty to protect the country from
chaos and anarchy, and they could therefore be ex-
pected to intervene if they thought such a situation
had arrived.
20. The military is powerful primarily because
subversive groups are weak and disorganized. The
Communist Party is split between a hard-line, pro-
Chinese faction that is further weakened by faction-
alism, and a soft-line, pro-Moscow group. There
are also two small leftist-extremist terrorist
groups, but their activities are currently limited
to isolated bombings. Rural insurgency is not an
immediate danger because of the continuing lack of
organization and the ineptness of city-bred leaders.
Insurgency in the cities, however, is of greater
danger. On a number of occasions, pitched battles
of several days' duration have been fought in both
Quito and Guayaquil between civilian insurgents and
security units. A major obstacle to insurgency thus
far in both city and country has been the lack of
suitable leadership and the nonexistence of a siz-
able popular will to undertake the sacrifices en-
tailed in violent revolution. The police, backed
by the army, have done a creditable job of handling
urban violence, but would be inadequate in the face
of an organized and well-led rural threat.
21. Fortunately for Arosemena, the Ecuadorean
economy has been relatively stable during his term
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of office. The most serious problem has been the
fiscal situation of the central government. It
is estimated that the government's unfinanced
deficit in 1966 amounted to $25 million, or an
amount equal to approximately one sixth of budget
expenditures. The inability of the government
to pay its employees on time has been the cause
of many strikes and labor disturbances. Important
development programs have been obstructed or
virtually halted by a lack of funds and the loss
of personnel.
22. The Ecuadorean economy has fundamental
institutional and structural defects. The country
is predominantly agricultural and excessively de-
pendent on a few export commodities, with the re-
sult that resources cannot be readily shifted in
response to changes in world market prices. To
complicate matters, public sector revenues are
derived in substantial measure from taxes on for-
eign commerce, thus assuring that adverse trade
developments will cause serious fiscal problems.
23. The prospects for important advances in
economic development in Ecuador in the next few
years are not bright. The labor force is largely
untrained and illiterate. The country is in an
increasingly unfavorable position to meet competi-
tion in international markets with its primary ex-
port, bananas. External resources are being used
mainly for economic and social development, where
prospective returns are in the more distant future.
24. The nation faces an election next year.
In the tradition of Ecuadorean politics, the cam-
vio-
paign promises to be hard fought, and perhaps
lent. The political parties are in desperate need
of a rejuvenation with responsible, progressive
leaders at their head, but this does not appear to
be in the cards. There are no young, dynamic pol-
iticians on the horizon who are good presidential
timber. The leading candidates for president at
this juncture are the old, shop-worn party hacks
and demagogues, such as ex-presidents Camilo Ponce
and Jose Maria Velasco Ibarra. Otto Arosemena's
political star has risen since Punta del Este, and
he is currently among the front-runners. The new
constitution as currently written is vague and would
seem to exclude him from running, but this may be
changed at a later date.
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