A tough defeat
On November 16, nearly 14 million Ecuadorians voted on four questions in a referendum: on the presence of foreign military bases in Ecuador, reducing the number of legislators, eliminating public financing of political parties, and changing the 2008 Constitution through a constitutional assembly. All four proposals were rejected, by roughly 60%-40%. Unfortunately, in Ecuador, results of referendums have never been evidence of how people feel or think regarding the topics proposed, but rather, indicate the voters’ approval or disapproval of the president.
The current referendum took place after a reasonable amount of time for Ecuadorians following the elimination of the subsidy on diesel. Even though polls showed that 52% of people were against the indigenous demonstrations that this measure provoked, the public did not necessarily approve of the measure itself.
The announcement in recent days of a possible trade agreement with the United States awakened the enthusiasm of the export sector and was certainly received as good news by many, but not necessarily by those who strongly promoted rejection of the measures in the referendum.
The silence of the government on the main changes it would propose to the constitution bothered and worried even those supporting President Noboa. If one question was important to win, it was precisely this one. However, it was the proposal most openly attacked by Noboa’s detractors and thus the one that received the lowest percent of approval (38.35%).
President Noboa needs to address this defeat with respect for the popular decision and carefully craft a strategy to keep the official leadership in congress until the end of his mandate. In this context, there is certainly space for the resurgence of the Correistas and Conaie, forces that repeatedly have proven they are not dead or as powerless as some people might think.
A political setback in the presence of financing scarcity is twice as difficult. The government presented the budget for 2026 with a deficit of $5.4 billion–similar to that for 2025–and far above the $2.624 billion considered under the agreement with the IMF.
The current fiscal and political situation does not provide room for a tax reform, and the increase in debt is becoming unsustainable. Private investment—domestic and/or foreign—is critical, and President Noboa will have to convince investors that the referendum outcome, while not positive, will not impede him on the corrective path the country has undertaken under his mandate, nor will it close investment opportunities.
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