Austerity Causes Mass Protests in Ecuador

On Oct. 1, Ecuador’s President, Lenín Moreno, announced a round of austerity which abolished the nation’s fuel subsidy and cut several forms of welfare. Ecuador’s fuel subsidy decreases the average price of gas from $2 to $1 according to The Washington Post. This cut is vital for rural farmers who are generally members of Ecuador’s sizable Native American population. 

After the passage of Decree 833 by Moreno, which formally ended the subsidy, mass protests broke out throughout the nation. The Confederation of Indigenous Nationalities of Ecuador spearheaded the demonstrations, as they claim that the elimination of the fuel subsidy would disproportionately impact Native Ecuadorians. Protesters occupied vital infrastructure including government buildings, transportation terminals and perhaps most importantly oil fields. Ecuador is heavily reliant on oil revenue and with a disruption in the fuel supply, Ecuador’s economy began to collapse. 

These economic difficulties were exactly what the repeal of the fuel subsidies was meant to prevent. Ecuador is currently deeply indebted and to receive a $4.2 billion loan from the International Monetary Fund (IMF), it had to institute an austerity package; the repeal of the fuel subsidy was a part of this plan. During the protests, Moreno stated that these harsh economic measures were necessary because of the economic mismanagement of his predecessor and former mentor, Rafael Correa. Moreno even claimed that Correa collaborated with the Venezuelan government to destabilize Ecuador according to Reuters.

Protesters also occupied city centers which led to violent clashes with the police, that killed five. The capital, Quito, was not immune to this unrest which led Moreno to move his government south to the city of Guayaquil. Human rights organizations have criticized the government’s crackdown on protesters. Amnesty International released a statement that read “the Ecuadorian authorities must put an immediate end to the heavy-handed repression of demonstrations.”

After nearly two weeks of debilitating protests, the Moreno administration came to an agreement with Indigenous activists on Oct. 14, which reinstated the fuel subsidy. The Washington Post reports that the protests cost Ecuador ~$1 billion in damages and lost income. This economic hit further strains Ecuador’s stagnant economy, and Moreno’s concession has put Ecuador’s IMF loan in jeopardy. However, in the aftermath of the deal, Moreno is optimistic, stating “peace is regained.”

This protest wave has reasserted the political power of Indigenous Ecuadorians who have ousted previous presidents. While in most of the Americas Indigenous Americans are disregarded in Ecuador they are a politically salient force.

Be the first to comment

Leave a Reply

Your email address will not be published.