Ecuador vote for reforms seen as limiting freedoms

QUITO, Ecuador, May 23 (UPI) -- Ecuador's President Rafael Correa has won Ecuador's referendum on judicial and media reforms but by a smaller margin than widely expected, leaving intact his plans and the opposition in disarray over the outcome.

Critics say the president's reforms will entrench and widen his authority over the courts and channels of communication and media. Correa says both the judiciary and media are riddled with corruption and need a major clean-up to restore international confidence in Ecuador.


The truth lies somewhere in between and the outcome will still undermine the independence of judges and nonpartisan functioning of the media.

Correa embarked on the reforms as part of a wider plan to give Ecuador greater credibility in the international capital markets where investors remain hesitant about venturing into the country.

This is especially hurtful for Ecuadorians as it contrasts with the virtual "gold rush" climate that has seen tens of millions of dollars of foreign direct investment pouring into Brazil and Chile, two countries with attractive interest rates and welcoming investment climate.

Although the uncontrolled inflow capital in Brazil and Chile has led more recently to countermeasures to protect the countries' currencies from overvaluation, Ecuadorian business leaders say they wouldn't mind swapping places with counterparts in the neighboring countries.


Correa's aides argue the judiciary and media reforms will improve Ecuador's image as a destination for new business and investment. Tied into the reforms are the government's plans to reduce violent crime, which it sees connected to corruption in the judicial system.

Correa had already declared victory in the May 7 referendum before the final results showed him winning by narrow margin.

Public opinion on Correa remains somewhat divided. While the opposition sees him consolidating power, the Ecuadorian masses have reacted warmly to increase state spending on developing the country's infrastructure, including roads, schools and hospitals. Surveys showed Correa's approval ratings exceeding 55 percent.

Ecuador has struggled to stage a convincing recovery from the 2008 downturn despite being an oil producer.

A fence-mending exercise is was also in the cards after Correa angered existing investors by resorting to public quarrels and state seizure of assets. The government's intervention in the private sector left the energy industry shaken and prompted some investors to quit.

Brazil's state-run Petrobras was among companies that pulled out in angry response to Correa's intervention in the oil sector with the aim of forcing investors to relinquish larger shares of profits for his government.

The referendum doesn't add directly to the investors' woes but Ecuador is hoping to catch up with economic gains made in neighboring countries, including Brazil, Chile and Peru since the 2008 economic downturn.


In 2009 the country found itself marooned in capital markets after a $3.2 billion debt default.

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