Ecuador's Development Agenda: Insights from Noboa's Re-election

On April 12, 2025, Ecuador's incumbent right-wing President Daniel Noboa won re-election after runoff vote. Noboa defeated Luisa González, the successor of former President Rafael Correa. This election follows a 2023 snap election in which Noboa narrowly defeated González and which was marked by high voter turnout and intense campaigning from both candidates.

González demanded a recount, refusing to recognize the results, even though Ecuador’s Electoral Council declared the results in favor of Noboa as irreversible. Noboa received 56% of the votes, compared to González's 44%.

Noboa's First Term Legacy

Noboa took office in November 2023 after his predecessor called for early elections amid impeachment proceedings. During his tenure, Noboa’s administration implemented several measures to reform the country, focusing on economic and social reforms to drive sustainable development.

Noboa also introduced significant developments in Ecuador's judicial system to address inefficiencies, reduce judicial backlogs and combat corruption. Noboa's administration introduced specialized constitutional courts and, in 2024, the Supreme Court was reconstituted with 27 new judges (31 total), which some critics argued could undermine judicial independence.

Ecuador is a country with oscillating policies on foreign investment. Since denouncing the ICSID Convention in 2009, Ecuador terminated 24 bilateral investment treaties containing ISDS provisions. It rejoined the ICSID Convention in 2021 and executed an investment treaty with Costa Rica in 2022, but in July 2023, the Supreme Court declared it unconstitutional. In April 2024, the Ecuadorian government held a referendum to amend a provision in the Constitution that prohibits Ecuador from yielding sovereign jurisdiction to instances of international arbitration in contractual or commercial disputes between the State and private parties.  The proposal sought to allow the State to enter into treaties or international agreements allowing dispute resolution through international arbitration, both for investment and commercial disputes.  However, 65% of the voters rejected the proposal. 

Despite these fluctuations, Noboa's administration seemed committed to creating a climate favorable to investments. For example, his administration secured a $4.4 billion deal with the International Monetary Fund (IMF) to enhance fiscal sustainability, which includes measures like tax hikes and subsidy cuts. Noboa is also advocating for public-private partnerships (PPP) to finance, build, and operate public infrastructure projects such as roads and hospitals. 

Additionally, Noboa reopened Ecuador's mining register to combat illegal mining and attract responsible investment, aiming to regulate mining activities and reduce corruption in the sector.  Noboa's efforts extended to expanding renewable energy projects, including investments in solar and geothermal energy and natural gas as part of a broader strategy to diversify Ecuador's energy grid and improve infrastructure.

Ecuador's Path Forward: Noboa's Strategic Governmental Plan

During his campaign, Noboa presented his Governmental Plan of the Candidates for President and Vice President of the Republic of Ecuador (“Governmental Plan”).  The Governmental Plan focuses on improvements in four areas: (i) social, (ii) economy and employment, (iii) environment, energy and connectivity, and (iv) organization of the state.

In the social sector, the Governmental Plan prioritizes the enhancement of social protection systems to reduce poverty and ensure universal access to healthcare and education. It aims to promote sustainable urban development, improve healthcare infrastructure, and expand educational opportunities.  Additionally, Noboa plans to implement community-based programs to support vulnerable populations, including women, children, and the elderly.

The economic strategy in the Governmental Plan focuses on transforming productive sectors by fostering technological innovation and encouraging circular economy practices while ensuring fiscal responsibility. Noboa emphasizes the importance of strengthening Public-Private Partnerships (PPPs) to drive economic growth and development. This includes initiatives to support small and medium-sized enterprises (SMEs), enhance the competitiveness of key industries, and attract foreign investment especially in the technology, energy, agriculture and tourism sectors. The plan also aims to modernize infrastructure and promote digital transformation to boost economic productivity. 

Noboa’s environmental agenda is centered on enhancing conservation efforts, efficiently managing water resources, and transitioning to renewable energy sources. The Governmental Plan highlights the importance of expanding investments in solar, geothermal, and natural gas projects to diversify Ecuador's energy grid. Additionally, it emphasizes environmental sustainability and infrastructure development, as well as efforts to combat illegal mining and promote responsible investments.  At the same time, the Governmental Plan also provides for the strengthening of environmental regulations to protect biodiversity and natural habitats.

Finally, Noboa aims to promote the efficiency and transparency of public agencies, underscoring the need for judicial independence and democratic governance. The Governmental Plan seeks to continue reducing judicial backlogs, combating corruption, and strengthening regulatory frameworks, as well as focusing on enhancing public sector accountability and improving citizen engagement in the governance processes.

Noboa’s policies aim to increase private participation in the country's development and foster foreign investment. The election results now ensure the continuation of such policies.  However, looking ahead, Noboa faces the challenge of maintaining public support while addressing the ongoing issues of crime, corruption, and economic instability. His administration's success will depend on its ability to deliver tangible results.

Although not explicitly referred to in his Governmental Plan, upon celebrating his victory, Noboa also proposed calling for a constitutional assembly to reform Ecuador’s Constitution.  The specific details of such proposal are not yet clear.

During Noboa’s new term, his party, Acción Democrática Nacionalista (ADN), will not have a majority in the National Assembly. In the February 2025 congressional elections, ADN secured sixty-six seats in the legislature.  The opposition coalition, led by the socialist Citizens' Revolution, obtained sixty-seven seats. The Indigenous party Pachakutik has nine seats.  Consequently, ADN will be required to form coalitions with Pachakutik or other smaller political parties to ensure the viability of the Governmental Plan.

Conclusion

Noboa's re-election marks a pivotal moment for Ecuador as his administration seeks to continue the implementation of policies aimed at economic growth and social development. However, Noboa faces challenges ahead, and his leadership will be tested through his ability to secure coalitions in a divided National Assembly, maintain public support, and address crime, corruption, and economic instability.

We encourage you to subscribe to be kept informed of the latest developments. Please contact the authors or your usual Herbert Smith Freehills contacts for more information.