18 | NOV | 2019
Lenín Moreno’s harsh neoliberal measures are withdrawn in Ecuador
People celebrate on the street after the government of Ecuadorian President Lenin Moreno agreed to repeal a decree that ended fuel subsidies in Quito, Ecuador - Photo: Carlos García Rawlins/REUTERS

Lenín Moreno’s harsh neoliberal measures are withdrawn in Ecuador

Gabriel Moyssen
Mexico City
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Popular and indigenous movements in Ecuador achieved a victory after President Lenín Moreno's government withdrew the austerity program that included an IMF loan and the sharp increase in fuel prices

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Popular and indigenous movements in Ecuador achieved a victory over neoliberal economic measures after the government of President Lenín Moreno withdrew the draconian austerity program, unveiled on October 1, involving a USD $4.2 billion loan from the International Monetary Fund (IMF) and a sharp increase in fuel prices.

Despite the repression launched against the mass mobilization, a strike, and street clashes that left at least 7 dead, 550 injured, and 1,000 arrested, forcing Moreno to move his government from Quito in the Andes to the coastal city of Guayaquil, a negotiation held on Sunday night, moderated by the United Nations and the Episcopal Conference, resulted in the cancellation of the program and an agreement to create a commission to design new measures to address the country’s deficit.

Indigenous leaders called off the protests and Moreno signed a decree on Monday, officially repealing the elimination of fuel subsidies that saw the price of gasoline and diesel rising to more than double overnight, triggering a price hike of basic goods.

However, just hours after thousands celebrated the withdrawal of the controversial Decree 833 at “El Arbolito” park in the center of Quito, Paola Pabón, prefect of Pichincha province -its capital is Quito- was arrested by authorities on charges of rebellion while she was sleeping in her house.

Pabón is a member of the left-wing opposition party Citizen Revolution Movement (MRC), close to Rafael Correa, Moreno’s predecessor in the Carondelet Palace and now self-exiled in Brussels.

The Mexican embassy in Quito has offered protection and shelter to six people, including legislators from the National Assembly and their spouses, Mexico’s Foreign Affairs Ministry (SRE) reported on Monday. On Saturday, the embassy offered shelter to legislator Gabriela Rivadeneira, also a member of the MRC, accused by Moreno of promoting a coup with Venezuelan President Nicolás Maduro.

On Tuesday, the SRE sent a diplomatic protest note to the Ecuadorian chancellery, due to the phrase “AMLO terrorist” that was painted on the embassy wall alluding to Mexican President Andrés Manuel López Obrador. The following day Moreno supporters protested in front of the embassy against the protection granted to the legislators.

The State repression on the MRC is behind the cautious approach to the negotiations adopted by the Confederation of Indigenous Nationalities of Ecuador (Conaie), which deployed in Quito over 20,000 activists during the crisis and stated that the base of its proposal at the special commission would be the rejection of any measure “affecting the interests of the poorest.”


Indigenous protests convulse Ecuador as President Lenin Moreno decries 'coup attempt'

Ecuador’s government is struggling with a large foreign debt and fiscal deficit and earlier this year reached a USD $4.2 billion loan deal with the International Monetary Fund that hinges on belt-tightening reforms
Indigenous protests convulse Ecuador as President Lenin Moreno decries 'coup attempt'Indigenous protests convulse Ecuador as President Lenin Moreno decries 'coup attempt'

Opposed to extractivism and neoliberalism, Confederation’s leader Jaime Vargas said that gasoline and diesel prices and public transportation fares must return to levels that were in effect before the approval of Decree 883.

“We have lost our fear; we are no longer those natives that let the government humiliate us. People have to express themselves. We have freed a right, enough with the looting of the Ecuadorian people,” remarked Vargas.

Adjustment package
Proposed by the IMF as part of the USD $4.2 billion financial agreement approved in February, the most severe measure included was the elimination of USD $1.3 billion in fuel subsidies, created by the military dictatorship in 1974 and which cost the state nearly USD $60 billion annually, according to international banks.

A 2019 study by the Inter-American Development Bank found that the greatest beneficiaries of the subsidies were oil companies and businesses; however, their cancellation would cut the incomes of the poorest 40% of the population by 4.5 to 5%.

Other actions announced in October were cuts to tariffs and taxes on certain imports, a labor reform to facilitate “flexible” contracts, a 20% wage cut for new hires in the public sector and a reduction from 30 to 15 yearly vacation days. In addition, over 20,000 public employees have been fired since 2017.

As president (2007-2017), Correa focused on social policies which earned him great popularity; nevertheless, his former vice president Moreno inherited a nation affected by the fall of oil and other commodities prices, just as its neighbors Brazil, Argentina, and Venezuela.

His conservative approach to foreign affairs led Ecuador to withdraw from the Quito-based regional bloc Unasur and to allow the United States to use the Galapagos island of San Cristóbal as a military base.

Designated by Unesco as a World Heritage Site and a biosphere reserve, San Cristóbal is an island visited by Charles Darwin in 1835. In spite of the proclamation of Ecuador as “a territory of peace” in 2008, U.S. spy planes are now using its landing strip in the context of the trade war and military buildup designed for preventing China’s rise as an economic and geostrategic rival in the eastern Pacific (Beijing has loaned USD $6 billion to the South American country).

Due to its relevance 1,000 kilometers from Ecuador, Washington sought to establish bases in the Galapagos since 1911. During World War II, the U.S. stationed 2,500 troops in Baltra island; in 1999 a base was installed in Manta (Manabí province) by the U.S. Southern Command on the pretext of fighting drug trafficking until it was closed in 2009.

Moreno’s government, however, is better known by the hand over of WikiLeaks founder Julian Assange, who was granted asylum in 2012 in the Ecuadorian embassy in London to escape persecution for exposing U.S. war crimes and secret diplomatic communications.

In 2016, Correa first cut off Assange’s Internet access; Moreno then gradually increased the Australian cyber activist’s isolation until opening the embassy’s doors to British police last April, paving the way for his extradition to the U.S., where he faces espionage and conspiracy charges that imply sentences of up to 175 years in prison and, potentially, the death sentence.

Ola Bini, a Swedish software developer and Assange’s friend residing in Ecuador, was also arrested in April for alleged links to WikiLeaks. He worked for the Ecuadorian-Spanish Digital Autonomy Center on issues of privacy, security, and cryptography; the U.S. Justice Department said that Bini would be questioned by its personnel.

His detention has been related to the scandal of the “INA Papers” in March, implicating Moreno in a scheme in which a Chinese firm deposited USD $18 million in payoffs in an offshore company, which in turn transferred the funds to shell companies that included INA Investments, owned by Edwin Moreno, the president’s brother.

Ecuador’s recent history has been marked by instability. In 1997, two years after the Cenepa War between Quito and Peru over Amazonian territory, right-wing President Abdalá Bucaram “The Madman” was impeached by Congress to appease protests against privatizations and corruption, forcing him to flee to Panama.

In 2005, President Lucio Gutiérrez resigned and had to seek asylum in the Brazilian embassy due to demonstrations over similar grievances, including the return of Bucaram to Ecuador.

These days, the conservative corporate sector based in Guayaquil is also criticizing Moreno for his alleged weakness in the crisis; pending the results of the negotiation between his administration, indigenous groups and unions, observers are anticipating the return of the leftist “pink tide” to Latin America, underscoring the likely victory of Kirchnerist Alberto Fernández in the Argentinian presidential elections on October 27, as well as the weakening of the governments of Jair Bolsonaro in Brazil and Iván Duque in Colombia.

Editing by Sofía Danis
More by Gabriel Moyssen

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