On Thursday, Ecuador suddenly cut Wikileaks founder Julian Assange loose, surprising many people. To understand why Ecuador’s president Lenin Moreno suddenly revoked asylum, it’s necessary to go back to the presidency of Rafael Correa, who originally granted Assange asylum in 2012.
Correa was originally the Minister of Finance in Ecuador, where he established relationships with many of the rising leftist leaders at the time, including Argentina’s Nestor Kirchner, Brazil’s Luiz Inacio Lula da Silva, and most importantly Venezeula’s Hugo Chavez. He also frequently blasted and bashed the United States in public. He was a committed socialist ideologue, and frequently attacked international institutions led by the Western powers, including the World Bank and the IMF.
After a major political crisis in Ecuador, Correa ran for president in 2006 with his party, the Alianza PAIS, on a message of change and reform. After being elected, Correa promptly defaulted on Ecuador’s considerable foreign debt and instituted left wing policies, using government money to buy the loyalty of the citizens in a way similar to Hugo Chavez, through various poverty assistance programs.
He also launched a harsh crackdown on the Ecuadorian press, and created a regime of censorship, even jailing some reporters. It’s important to understand that Correa was not some brave defender of the free press when trying to explain his decision to give shelter to Julian Assange.
As I noted above, Correa hated the United States. He routinely made incendiary comments about the United States and then-president George W. Bush in speeches. This comment from 2006 was typical of the socialist loudmouth:
“Calling Bush the devil is offending the devil,” said Correa, a U.S.-trained economist who leads 12 other candidates in polls ahead of the Oct. 15 election. He said “the devil is evil, but intelligent.”
“I believe Bush is a tremendously dimwitted president who has done great damage to his country and to the world,” Correa said.
Correa, who has been highly critical of free market policies advocated by Washington, said he merely expressed “personal opinions” and promised that if elected, “between states and at the level of leaders, the most absolute respect would be shown.”
Given how much he hated the United States, it stands to reason that Correa would happily grant asylum to Julian Assange. The Americans wanted to punish Assange for embarrassing them by leaking classified documents related to the Iraq War, and the left rose in his defense almost by reflex. Granting Assange asylum was an excellent opportunity for Correa to improve his standing on the far left and embarrass the Americans.
As with most socialist economies, eventually the “good times” brought on by high levels of spending came to an end. Ecuador’s economy was heavily dependent on revenues from the state oil company, Petroecuador. The oil price shock of 2014, where prices dramatically crashed in the second half of the year, forced Correa to rein in his spending and start going hat in hand to foreign investors for assistance. Correa had not saved any money for a “rainy day.”
In 2017, Correa decided to step aside and allow Lenin Moreno, his then vice-president, to run for president in his place. At the time, political analysts thought this was a move similar to what Vladimir Putin had done in Russia with Dmitry Medvedev. The plan seemed to be to let Moreno to act as a puppet for Correa and guide the country through the economic crisis so Correa could avoid the blame for it, with Correa easily sweeping back into power after the crisis was over.
The problem with this brilliant plan was that Moreno turned out to to not be a committed socialist. He also wanted to rule in his own right:
Instead, Moreno departed from the script. A quieter, more conciliatory figure than Correa—Moreno is the world’s only head of state in a wheelchair, having been paralyzed in a 1998 robbery attempt—his political maneuvering has been swift and decisive. He quickly turned on Correa, seeking to distance himself from perceived rampant corruption and an economic crisis. With a gentle tone, he has built new bridges with the opposition, the private sector and the press—all without alienating his base of working-class voters who benefited from Correa’s self-proclaimed “Citizens’ Revolution.” And with a high stakes referendum over term limits set for Feb. 4, Moreno has boldly moved to consolidate his gains and lock Correa out of office forever.
The first move on Moreno’s chessboard came barely two months after taking office. Last August, he stripped the vice president, Jorge Glas, who had been in the position since 2013 and is a close ally of Correa, of all responsibilities, stopping just short of firing him. Glas was accused of taking $13.5 million dollars in bribes from the Brazilian construction giant Odebrecht as part of the sprawling scandal involving kickbacks across Latin America. He has since been convicted, sentenced to six years in prison and removed from office.
It took Moreno some time to consolidate power, though Glas’ downfall and arrest was a major step on the road to it. In early 2018, Moreno successfully held a referendum in February in which citizens voted to ban Correa from seeking office again in Ecuador.
Once he had finally obtained full control over the levers of power, however, Moreno was faced with the same problems that had plagued Correa at the end of his presidency. The economy was still on the rocks due to low oil prices and years of overspending, huge levels of indebtedness to China, and low levels of foreign investment. He also had to deal with the fallout from the large earthquake in 2016 as well.
Moreno’s main strategy has been to try to reverse and cool down Correa’s socialist policies, attract foreign investment into the country, and get rescue financing from multilateral lending institutions. In order to achieve these goals, he has to re-establish good relations with the United States and his centrist or center-right neighbors in Latin America, such as Colombia and Peru.
In July last year, I wrote about a meeting between Mike Pence and Lenin Moreno, which seems to have led to Moreno’s decision to dump Correa’s old alliance with Venezuela. While it enraged the left, it was undoubtedly the right decision, because the alliance with Venezuela held no benefit for Ecuador, because Maduro had been attacking Moreno in public for “betraying” socialism, and because the Venezuelan refugee crisis was creating serious problems for Ecuador.
More recently, Moreno scored a major win in February, securing more than $10 billion in a multilateral aid package for Ecuador from multiple international lending institutions, including the IMF and the World Bank:
Ecuador has reached a $4.2 billion staff-level financing deal with the International Monetary Fund (IMF), President Lenin Moreno said on Wednesday, as the Andean country grapples with a large fiscal deficit and heavy external debt.
The country will also receive $6 billion in loans from multilateral institutions including the World Bank, the Inter-American Development Bank, and the CAF Andean development bank, Moreno said in a message broadcast on national television and radio.
Ecuador’s sovereign bonds surged last week after the IMF confirmed it was engaged in formal talks with Moreno over a possible financial arrangement. Staff-level agreements between the IMF and member countries are subject to approval by the Washington-based lender’s executive board.
The OPEC nation’s debt grew under former leftist President Rafael Correa. Moreno earned Correa’s support during the 2017 election campaign, but has implemented more market-friendly economic policies since taking office.
I think it is very possible that in exchange for this lending package, Washington demanded Moreno turn over Assange. If it wasn’t for this aid package, then it is likely Assange was the price for additional aid packages and investments further down the road.
In breaking with Correa and ruling in his own right, Moreno has lost the support of the far left, so he must seek more traditional means of economic growth and foreign support. If he wants to maintain power and repair the damage the Correa administration did to Ecuador, he is going to have to play ball with the United States.
When seen in this context, it becomes easy to understand why Moreno did what he did. I am not happy about what’s happened to Assange, but I don’t think it’s fair to blame Moreno. We should instead blame the far left, which is obsessed with hunting down and punishing its critics and dissenters such as Assange, and forced Ecuador to give him up.