In July 1996, Abdalá Bucaram was elected president of Ecuador. A showy and eccentric populist, Bucaram quickly alienated most of the political establishment. Under Bucaram, US ambassador Leslie Alexander told Ecuadorians the country was gaining a reputation for pervasive corruption. Bucaram had come to describe himself as “El Loco,” or the madman, and citizens began to believe that he was indeed crazy. By February 1997, they had had enough. More than 2 million Ecuadorians marched, calling for his ouster during a one-day strike. On February 6, Congress declared Bucaram mentally incompetent, charged him with corruption and ousted him from office. During the presidential crisis, Bucaram at first refused to leave office, and sought refuge in Guayaquil. Vice President Rosalia Arteaga and Fabian Alarcon, leader of Congress, claimed the presidency. Bucaram finally fled to Panama, while Arteaga agreed to briefly become president until Congress could establish right of succession. Alarcon emerged as interim president, and held office until the next presidential election in 1998. Bucaram was accused of absconding with $100 million to $300 million in public funds during his brief presidency. This sum was a significant one for a country in deep financial crisis. Through most of the 1990s, Ecuador suffered double-digit inflation as high as 50% to 60% a year. By 1999, the economy had contracted by 7.5%, and only one in three Ecuadorians had a full-time job. By 2000, over 62% of Ecuadorians lived in poverty, some with virtually nothing to their names.
Many of the country’s Pacific Coast communities were battered by El Niño storms during early 1998, causing millions of dollars in damage. In this atmosphere of economic uncertainty, presidential elections were held in May 1998, with Harvard-educated Jamil Mahuad facing Alvaro Noboa, a banana tycoon and reputedly the richest man in the country. With promises for political stability and economic recovery, Mahuad prevailed at the polls and took office in July 1998. The next month, extensive constitutional reforms approved by a National Constituent Assembly took effect. Reforms gave unprecedented new rights to the country’s indigenous peoples, who had become more vocal about their rights during the 1990s.
In 1996, the leaders of 11 indigenous groups joined with women, ecologists, and human rights workers to found the Pachakutik (”change” or “revolution” in Quichua) political movement. Under this new political umbrella, native peoples urged massive social changes, and won several seats in Congress by 2000. In the meantime, Mahuad was unable to bring the economy under control and was making political enemies. In May 1999, Mahuad and Peruvian president Alberto Fujimori formally ended their border dispute. Ecuador gained a small sliver of land, and navigation rights on some Peruvian rivers. The peace accord was seen as a defeat within Ecuador, where the military resented its loss of power and resources and was embarrassed by territorial concessions to Perú. By late 1999, native peoples had grown disenchanted with Mahuad. Amerindian leaders accused him of lacking sympathy for native peoples’ economic problems. Mahuad also had overseen a $1.2 billion bailout of 18 corrupt banks. The financial scandal only widened after a jailed banker claimed he had given $3.1 million to Mahuad’s presidential campaign.
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