Mass anti-government protests have paralysed Ecuadoran transportation and other services for more than a week. Protesters are angry over President Moreno’s decision to cut fuel subsidies and implement several tax and labour reforms. At least five people have been killed and hundreds wounded. More than 700 people have also been arrested. The background is a long battle between IMF, World Bank and the Ecuadorian people.
Protests began on October 3 when President Lenin Moreno cut petrol subsidies that had been in place in the country for 40 years. The cuts saw the price of diesel more than double and petrol increase by 30 percent, overnight. But this is only a part of the explanation.
The government also released a series of labour and tax reforms as part of its belt-tightening measures it was forced to undertake when it agreed to a $4.2bn loan with the IMF. Controversial reforms include a requirement that public sector workers donate one day’s worth of wages to the government each month, and a decrease in vacation days from 30 to 15 days a year. Moreno also boasted that 23,000 public workers had been dismissed during his term and that non-permanent contracts in the public sector would be renewed with 20 per cent lower pay.
The unions started the protests - others followed
Transportation unions (taxis, trucks and buses) were the first to organise a national strike, blocking roads and highways and bringing the country to a stand-still Thursday and Friday of last week. After talks with the government, national transportation union leaders called off the strike last Friday.
But mass protests continued, with thousands from the indigenous movement, student groups, human rights organisations, labour unions, and local transportation unions taking to the streets throughout the country. They have pledged to stay in the streets until the government reverses the reforms and cuts. They argue they are bearing the brunt of the measures, which is untenable for many in a country where the minimum wage is just $394 a month. On the union side protests are organised by the United Front of Workers (FUT) that includes the ITUC affiliate CEDOCUT.
Long battle between IMF, World Bank and the Ecuadorian people
The battle between the IMF, World Bank and the Ecuadorian people has set the scene for decades of politics in Ecuador and the wider region. A banking crisis in 1998 led to the fragmentation of politics and the imposition of US, IMF and World Bank programmes in the country, including dollerisation. In 2005 President Lucio Gutierrez, who himself was elected on an anti-neoliberal ticket, was ousted from power over his acceptance of free trade policies and IMF backed economic reforms in the country.
In the incoming government in 2005, an audacious finance minister Rafael Correa made a reputation by denouncing the IMF and World Bank and their demands on the country. He would eventually resign after the World Bank withheld agreed loans, only to return as President in 2006 at the head of a new leftwing party, the PAIS Alliance. Inaugurating a ‘Citizen’s Revolution’, which saw mass participation by social movements in economic, political and social reform including the replacement of corrupt governing institutions with a national assembly.
Moreno was elected in 2017 as the candidate for Correa’s centre-left party but has since moved to the right. Within just months Moreno had largely abandoned his election policies and was attacking Correa’s legacy on every front. Correa himself was forced to flee the country as Moreno established extra-constitutional instruments to purge the state apparatus of supporters of the former government. Austerity measures, privatisations, attacks on workers rights and the halting of ambitious land and wealth taxes followed an unmistakable course of political reaction.
The presence of outside actors including the US, IMF and World Bank, was all too apparent. Moreno is carrying out a rapprochement with the IMF, accepting many of its demands for austerity programmes conditional upon a $10bn loan in march this year.
State of emergency
Moreno has deployed the military to the streets of the capital Quito and declared a state of emergency only four hours after the first protests began, but this move seems to have backfired as protestors stormed the parliament, forcing Moreno and other officials to leave the capital. He has accused protesters of being part of a larger plan to destabilise the government, orchestrated by former President Rafael Correa, who lives in Europe.
Hard to see an end in sight
It is hard to see an end in sight, as protesters are demanding the government call off the state of emergency, reinstate petrol subsidies, and repeal the labour and tax reforms – calls Moreno has already refused.
Jaime Vargas, leader of the national indigenous movement CONAIE, told Al Jazeera he will not speak to the government until it agrees to repeal the reforms. The indigenous movement also has their own grievance as they are also protesting against extraction activities in their territory
The International Trade Union Confederation (ITUC) demands an end to the state-led political violence and also demands the release of protestors. The ITUC says that the social and economic situation is similarly dire in Argentina, where identical policies were introduced under the conditionalities of the IMF. At the outset of its loan to Argentina, the Fund praised the policies of President Macri as seeking “to foster growth and job creation, while reducing poverty”. The country, however, now records the worst rates of unemployment, poverty and inequality of the last 18 years. "The IMF policies place an overwhelming burden on working people while bailing out corrupt financial elites and corporations. Argentina and Ecuador need the space to implement economic recovery by investing in people – not by imposing a failed model that drives countries into deeper economic and social crisis,” said general secretarySharan Burrow.