Ecuador Runoff to Pit Correa’s Pick Against Businessman

Stephan Kueffner and Marcelo Rochabrun
·5 min read
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(Bloomberg) -- Ecuador’s presidential race will be decided in an October runoff between socialist candidate Luisa Gonzalez and entrepreneur Daniel Noboa, providing contrasting visions for how to bring prosperity to a violence-torn country.

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Gonzalez, 45, led a field of eight candidates Sunday with about 33% of the vote with two-thirds of ballots counted at 9:30 p.m. local time, according to the nation’s election authority. That was short of the level needed to win outright against the other seven candidates. Noboa, 35, was solidly in second place with more than 24%. All other rivals conceded.

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Noboa immediately becomes the favorite to win in October since backers of other candidates are more likely to choose him over Gonzalez, said Ruth Hidalgo, dean of political science at Ecuador’s Universidad de las Americas. While Gonzalez’s affiliation with former president Rafael Correa gave her the base of support she needed to win the first round, she’ll need to win over other voters with less fond memories of his tumultuous time in office.

The snap election was triggered by President Guillermo Lasso’s decision to close congress in late May amid an impeachment attempt led by the Citizen Revolution party, for which Gonzalez held a seat. The runoff is set for Oct. 15 since no candidate got more than 50% of the vote, or 40% with a lead of more than 10 percentage points.

Ecuador’s dollar bonds fell in early London trading on Monday, with the note due 2040 down 0.2 cent at 33 cents on the dollar.

Violence and lawlessness were already major issues in the unique short campaign, but they became the focus after the assassination of candidate Fernando Villavicencio, gunned down exiting an event in Quito Aug. 9. A surge in homicides and political violence in the South American nation has made it one of the most dangerous in the world. All candidates had pledged to tackle crime.

Villavicencio was killed so close to the election that his name couldn’t be substituted on the ballot by his replacement, Christian Zurita, who conceded as the result became clear. The election returns had him in third place with 16% of the vote.

“We had just one day to campaign,” Zurita said at his party’s rally.

Whoever wins in October will only be president for a year and a half before a regular election is held. That means he or she will have to make a quick impression on voters to get a chance at a full term.

Gonzalez, a former aide to Correa, ran on a platform of nostalgia for the record decade he was in power, during which high oil prices and borrowing from China fueled a popular surge in government spending. For the third straight time since 2016, Correismo, as the free-spending but socially conservative movement of Gonzalez’s mentor is known, failed to win support beyond its core base and win the election in the first round.

“We’ve seen that the country doesn’t settle for just single-issue voting, like security. No, this country must demand everything, must ask for the best conditions,” Gonzalez said in a news conference, going without the bulletproof vest that had been a mainstay for candidates on the campaign trail.

Banana Tycoon

Noboa, a conservative entrepreneur from Guayaquil and former lawmaker, hails from a family with deep ties to the business world. Notably his father, Alvaro Noboa, a banana tycoon, ran for the presidency a record six times and made the runoff three times — the last time against Correa himself in 2006 — but never won. His mother Anabella Azin is also a former lawmaker.

“People who wanted change won,” Noboa said in televised remarks from his campaign headquarters in Guayaquil. “First, the young person who is hoping to attend university, to get a job; for the family hoping to get security in their neighborhoods; seniors to get a dignified pension; the businessman who wants to be able to work safely without being extorted or strangled by a bank.”

Like Correa, Gonzalez is a socialist who favors government programs and spending to aid the poor. Noboa is more market-friendly and wants to encourage private investment to lift the economy. Neither stood out as the toughest on crime among the field — Jan Topic, a former soldier, promised a crackdown on criminal gangs, and Otto Sonnenholzner pledged to pardon police officers who kill on the job.

While Correa’s party immediately led in polling and resurged in local elections in February, Noboa had trailed most other candidates in polling for most of the race. Two days before Villavicencio’s murder, he was polling in sixth place with 3.7% of the vote in a Comunicaliza poll. He began surging in the days after an Aug. 13 presidential debate.

“Noboa grew due to two factors: the first was Villavicencio’s death, which changed everything, and the debate, where Noboa was the winner,” said Francis Romero, president of pollster Click Research. Noboa’s campaign managed post-debate positioning on social networks very well, and he convinced voters “that he is prepared, that he has a plan to reactivate the economy of the country and generate employment,” Romero said.

Noboa’s road to the runoff had some hurdles. As a lawmaker in September 2022, he led a congressional delegation to Moscow that he said he paid for himself, undermining Ecuador’s foreign policy, which has sided with Ukraine after it was invaded by Russia.

His campaign claimed he was the target of a shooting during a rally Aug. 17, but police denied the shooting in the violent Guayaquil suburb of Duran targeted him.

Heavy Security

Candidates were heavily guarded during the election and several wore bulletproof vests. Zurita was covered by a bulletproof blanket as he cast his vote.

Despite Ecuador’s violent reality, no major safety incidents were reported during election day. Ecuadorians abroad had some technical problems with the voting system for expatriates, the Foreign Ministry said.

--With assistance from Netty Ismail.

(Adds details on bond-market reaction in fifth paragraph)

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