Special Assembly Approves New Proposed Ecuadorian Constitution

A special assembly dominated by members of President Rafael

Correa's Alianza PAIS party recently approved a proposed

new Ecuadorian constitution that would grant the president

broad political and economic powers. The proposed new

constitution now faces a national public vote scheduled for

September 28, 2008.

If passed, which seems likely given President Correa's

landslide victory in 2007 and current popularity, the new

constitution would grant President Correa the power to remove

Congress, seek re-election for additional terms and control

monetary policy. While critics questioned the concentration of

power, supporters reportedly welcomed the vote with chants of

"We don't want . . . to be a North American

colony."

Under the new constitution, the regulatory powers of the

heretofore independent Central Bank would be vested in

President Correa. Seen as an important source of economic

stability to date, the Central bank establishes interest rates

and controls the release of U.S. dollars into the dollar-based

Ecuadorian economy. Critics' concern that President

Correa's political interests might interfere with sound

monetary policy is heightened by his prior intervention in...