Strafor analysis for Ecuador

Strafor.com analysis Ecuador – The Ecuadorian legislature’s decision to remove presidential term limits and bar President Rafael Correa from running in the 2017 election will force the ruling Alianza Pais party to choose a new, lesser-known candidate to compete against the opposition.
If oil prices continue to fall, Ecuador will have to cut government spending even further, raising the risk of protests from communities accustomed to services in the coming years.
Foreign direct investment in the Ecuadorian energy sector is unlikely to increase because of depressed oil prices and investor wariness stemming from previous expropriation threats against oil companies.

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Regardless of who wins in 2017, the next president will have few options to improve the country’s sagging economy, which will make it more difficult to retain constituents’ loyalty. Low oil prices have hurt the exports that Ecuador depends on for economic growth. To maintain public finances, the government will have to continue making cuts to spending, raising the risk of igniting protests among groups that have come to rely on generous social programs. In the end, barring a quick rise in oil prices, the next Ecuadorian president’s term will be marked by slower economic growth and potential social unrest. Read Article