Spotlight: The two economic models facing off in Ecuador's October election

Ecuadorans will go to the ballot box on October 15 to choose a new president to replace Guillermo Lasso until May 2025, when the current government's term was originally due to end.

In the August 20 presidential election, former assembly members Luisa González, an ally of former leftist president Rafael Correa, and Daniel Noboa, the son of businessman and five-time presidential candidate Álvaro Noboa, came first and second, respectively, and will now compete in the runoff.

González received 33% of the vote and Noboa 24%, according to the national electoral authority (CNE).  

Local analysts are portraying the runoff as a face-off between two very different economic models. González will likely try to emulate the government of Correa, with strong state intervention in the economy and high public spending, while Noboa plans to promote the private sector, bringing in regulations to increase Ecuador's appeal to foreign investment and improve the business climate.

BNamericas takes a look at the main economic proposals of the two candidates.

LUISA GONZALEZ

González represents former president Correa's movement, Revolución Ciudadana. Her vice-presidential candidate is Andrés Arauz, who lost to Lasso in the 2021 election.

In statements to journalists, González has said that she will inject US$2.5bn of the country's US$7bn international reserves into the economy.

In her 69-page government plan, she proposes to stabilize growth and production, expand instruments to manage the liquidity of the economy and promote the transition to the post-oil era.

She also mentions "carrying out a comprehensive audit of the prepaid public debt during the pandemic," boosting state investment in social sectors, stabilizing non-oil revenues, adjusting the tax burden in line with international parameters and reviewing government subsidy policies.

The candidate also proposes to strengthen public banks as a driver of investment, reducing active interest rates and auditing and, if necessary, halting and reversing concessions, privatizations and sales of public assets.

The plans also outline reforming aspects of the country's institutional structure by calling a constituent assembly and establishing lines of public-private investment to support the use of electric vehicles powered by electricity or alternative energies.

DANIEL NOBOA

The candidate of the Acción Democrática Nacional (ADN) alliance has businesswoman Verónica Abad as his vice-president.

His main objectives are to establish strategic partnerships with international private companies to promote the economic reactivation of the country, improve productivity, competitiveness and the quality of Ecuadoran products, as well as expanding export markets.

Noboa also proposes to strengthen the dollarization system in force in the country since 2000 through greater fiscal discipline and responsibility in the management of public finances, as well as increasing international reserves to be able to cope with possible external economic shocks.

He also mentions creating an attractive environment with greater legal certainty to help attract foreign investment to the country.

Noboa's government program also outlines creating tax incentives, such as reducing corporate taxes, to attract productive investment, as well as combatting tax evasion.

The candidate is also considering creating an infrastructure development program, focused on areas such as transport, energy, water and sanitation, which could be financed through a combination of public and private funds.