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4 points to understand the agreement that ended – for now – the protests in …

by Ace Damon
4 points to understand the agreement that ended - for now - the protests in ...

Ecuadorian President Lenin Moreno and indigenous leaders have agreed to end violent protests that left seven people dead and paralyzed the country – at least for now.

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The deal struck late Sunday to reinstate fuel subsidies whose repeal triggered 11 days of demonstrations was the result of negotiations brokered by the United Nations (UN) and the Catholic Church.

The announcement ended another violent day in Quito, paralyzed by protesters, divided by barricades, swallowed by tear gas.

Moreno, who had repeatedly emphasized the need to end decades-long fuel subsidies to stimulate Ecuador's stagnant economy, celebrated the deal and said it was necessary to restore order. "A solution for peace and for the country," he said. "Peace is recovered."

As workers and protesters began a massive cleanup effort on Monday, the Confederation of Indigenous Nationalities of Ecuador (Conaie), which led the protests, warned that the protests could resume.

"We celebrate the victory," the group said in a statement. "But that doesn't end until the deal is complete."

What does the deal say?

Not all details have been resolved. But the most important point is already settled: the repeal of decree 833.

The decree, announced on Oct. 1 by Moreno, ended subsidies that he said cost the country $ 1.3 billion annually. He announced the withdrawal of subsidies as part of an austerity package to meet the requirements of a $ 4.2 billion International Monetary Fund (IMF) loan.

Moreno said Sunday that the government will replace the decree
833 by "a new one that contains mechanisms to focus resources on who else

It is unclear when the new decree will be announced or what it may entail. But it will not "end up (just) benefiting the rich and smugglers," the parties said in the UN-announced deal.

What was the impact of removing subsidies?

What drove Moreno to the negotiating table was both the protests and the rising costs of the austerity package itself.

Moreno's elimination of fuel subsidies raised gasoline and diesel prices, which jumped from about $ 1 a gallon to over $ 2. This led to speculation and high prices on many consumer goods.

Those who suffered the most were the rural workers and the poor. But the impact on individuals, communities and businesses has been widespread.

The demonstrations imposed new costs. Ecuador, whose economy depends on oil exports, produced about 430,000 barrels a day. But as protesters occupied the oil fields, that number dropped more than half, according to the Associated Press.

After the first week of protests, officials said the disruption in transport and trade cost the country more than $ 1 billion.

What does the agreement say about Ecuadorian politics?

Indigenous peoples, marginalized in many countries of the Americas, have enormous political influence in Ecuador and have demonstrated this many times.

Indigenous-led protests are widely credited with overthrowing three presidents in the last 25 years. Now they made another president fold.

"A neoliberal government cannot sell the blood of our
to the IMF, which is why we have declared ourselves in an endless struggle, "said the
indigenous leader Jamie Vargas at Agence France-Presse last week.
"We are historically warrior peoples who liberate ourselves in all these
processes ".

What happens next?

Ecuador's economy is in big trouble. Tied to the vagaries of commodity markets, it was hit hard by the international decline in oil prices. Ex-President Rafael Correa's government spending increased Ecuador's debt, compounding the problem.

Now the central bank predicts that the economy will contract 0.2%
this year.

Looking for a way to change the economic landscape, Moreno turned to the IMF for help. To receive a $ 4.2 billion loan last month, he struck a deal to get rid of fuel subsidies, raise taxes on high-income companies and increase the number of families receiving a small monthly payment of US $ 15.

But now there are doubts about Ecuador's agreement with the IMF, which depended on the repeal of fuel subsidies.


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