Sunday, April 15, 2007

Sharp Left Turn in Ecuador

April 9, 2007

"When plunder is organized by law for the profit of those who make the law, all the plundered classes try somehow to enter -- by peaceful or revolutionary means -- into the making of laws."

--Frederic Bastiat, The Law, 1850

To understand the constitutional crisis that Ecuador finds itself in today -- and why the Organization of American States, yet again appears incapable of constructively intervening in an authoritarian power coup -- there can be no better guide than this little book, written more than 150 years ago, by a Frenchman to warn his fellow citizens of the dangers of an all-powerful state.

The modern day plunder frenzy in Ecuador pits President Rafael Correa, an outspoken admirer of Venezuelan President Hugo Chávez, against members of Congress who wish to preserve the country's institutional balance of power. At stake is the future of democracy, with 13 million Ecuadoreans facing the prospect of life under a soft dictatorship allied with the Venezuelan strongman.

The outcome of this struggle is not only of concern to Ecuadoreans. Tucked alongside of Peru and Colombia, Ecuador is perfectly situated to provide safe haven to the organized crime and rebel groups that Mr. Chávez has been known to shelter on his own border with Colombia. A non-democratic Ecuador, led by the pro-Chávez Correa, would almost certainly further diminish stability on the South American continent.

Mr. Correa was elected fair and square last year in a runoff against a banana tycoon. His victory hinged largely on his ability to tap into the popular, and correct, sentiment that the country has been plundered by a corrupt status quo. He promised that he would do some plundering of his own -- legally of course -- to get what was owed for the majority poor.

Yet Mr. Correa also had a reputation for extremism and even disenfranchised Ecuadoreans weren't ready to follow him blindly. To win in the runoff, he was forced to moderate his speech substantially. After the election was over he reverted to his former fiery self. At his inauguration in January, he pledged allegiance to "21st century socialism," waving about a "Bolivarian" sword which was a gift to him by Mr. Chávez. He also threatened to default on his country's external obligations, and more recently he stated that creating uncertainty in the debt market is part of his strategy.

So far this is mostly the stuff of standard Latin populism, laced heavily with nationalism and served up with Mr. Correa's trademark macho-man appeal. It is an economic agenda that is bound to damage investment and Ecuador's risk profile, and further impoverish its people. But under democracy, the president gets to put his program in place and see if it works. His opponents may not like it, but it is within his presidential powers.

On the other hand, his plan to rewrite the highest law of the land, crush the opposition and make himself ruler for life is not a presidential prerogative and this is what has sparked the constitutional crisis.

To get the ball rolling on the new constitution, Mr. Correa has decreed a national referendum on whether the country wants to elect a constituent assembly with "full powers." A "yes" vote would mean that the assembly would not only be charged with drafting the new law, but also be given authority to dissolve Congress, remake the courts and end term limits for the president.

Mr. Correa's opponents feel certain that he is following the road mapped by Mr. Chávez, whose power grab rested mainly on a constitutional rewrite that allowed him to destroy competing institutions designed to act as checks on his power. And since, by law, only the legislature has the power to call a constitutional referendum, Congress, in the past few weeks, tried quashing Mr. Correa's "full powers" referendum through a series of technical legal maneuvers.

Mr. Correa fought back by getting the electoral court to expel 57 of his opponents from the 100-seat unicameral legislature and enlisting the police to enforce the expulsions. Then he called in his militias. In recent days the streets of Quito have been flush with violent activists sending a message in favor of the Correa plebiscite. The president also seems to have "convinced," although no one knows how, one key judge and other political actors to side with him so that the referendum -- now scheduled for this Sunday -- is likely to go forward, despite objections from the legislature.

Having been "democratically elected" and now enjoying an approval rating of about 60%, Mr. Correa seems to believe he has carte blanche to make the law whatever he decides it is. We wonder where he got that idea if not from the OAS and other bright bulbs in Washington (like Connecticut Sen. Chris Dodd) who continually defended Mr. Chávez's right to steamroll his opponents on the grounds that he won an election.

If the OAS has any raison d'être besides taking up valuable real estate in Washington, it is to support the balance of power that makes a democracy different from a mobocracy led by a caudillo. Up to now it has offered only vague support for democrats by stating that legitimacy requires the referendum to be "carried out in a framework of absolute respect for the democratic rule of law." That hardly seems possible at this point, since the referendum is outside the law. Instead of trying to end what Bastiat called "lawful plunder" the OAS seems more concerned with respecting the revenge of the plundered classes. It's as if it doesn't know why Mr. Correa and his supporters should not be permitted to take their own turn at power and plunder.

Bastiat had the answer to that too: "Woe to the nation . . . when the mass victims of lawful plunder . . . in turn seize the power to make laws." The losers, of course, will be the majority of Ecuadoreans.

• Write to O'Grady@wsj.com1

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