When Ecuador Elected a Free Market President

Atlas’s president, Alex Chafuen, has a story about when he first met my father, Romulo Lopez-Sabando,  in 1985. Alex asked him what the biggest challenge for free markets in Ecuador was. My dad replied, “Winning the country’s presidency”.

My father was president of the Chamber of Industries of Guayaquil, where he fought alongside Leon Febres- Cordero,( former president of the Chamber and a Congressman) for free market reforms. Their efforts were so successful that in 1984, Febres-Cordero won the presidency. Not only did he win, he won while preaching a free market message. The left called him “the most insolent oligarchy’s messenger ” for being so straightforward in his arguments for free markets.

Ecuador talked about free market reforms in Latin America  before Argentina, Peru, Brazil or Venezuela; on a continent where the only other free market option was Chile under Pinochet’s dictatorship. As is always the way, Ecuadoreans have been the first ones to talk about many reforms, like dollarization and privatization, but the last ones to actually implement these reforms. No free market reforms or privatizations were ever accomplished (except for a bank privatization) under Febres-Cordero’s government. Their only success was fighting against the guerrillas, and literally wiping them out. His government became the favorite whipping boy of the Ecuadorean left.

Later on, as mayor of his hometown Guayaquil, he recovered his political image by transforming the city from an ” American Calcutta”(no offense to Calcutta)  into a decent and livable place. I had the chance to ask Febres-Cordero (thanks to my dad’s friendship with him) why he never implemented any free market reforms during his presidency, given his admiration for Ludwig Earhart’s reforms in Germany. His only response was that the special interest groups made reforms impossible.

You can view Leon Febres-Cordero’s obituary in the Washington Post. I might add, that due to his failure to implement the reforms he  so ardently called for, it has been difficult to promote free markets in Ecuador. He was a great leader for Ecuador, but his great opportunity to implement lasting reform was squandered. His is a classic example of Hayek’s warning to Atlas’s founder, Antony Fisher against getting involved with politics in order to advance reforms.

It was not until recently, thanks to the steady work of Dora Ampuero (Instituto Ecuatoriano de Economia Politica established in 1991) and others (too many to name here) like my father, university students, Movimiento Libertario in Quito (Juan Fernando Carpio) and most recently Fundacion Ecuador Libre (winner of a 2008 Fisher Venture Grant), that the bad reputation left by Febres-Cordero has slowly been cleared away.  Little by litte the people of Ecuador are coming to appreciate the need for free market reforms, especially after the Pro-Chavez-Castro regime of Rafael Correa.

Originally posted here