Ecuador Protests: State Of Emergency Declared As Fuel Subsidies End

QUITO (Reuters) – Protests over fuel subsidy cuts halted
transport and blocked streets around Ecuador for a second day on
Friday as 350 people were jailed for unrest triggered by President
Lenin Moreno’s austerity measures.

The 66-year-old president has set oil producer Ecuador on a
centrist path after years of leftist rule under Rafael Correa and
is implementing a belt-tightening fiscal package to conform with a
$4.2 billion International Monetary Fund (IMF) deal.

But his scrapping of decades-old fuel subsidies this week
incensed many Ecuadoreans and brought violent protests in a nation
with a history of political volatility.

Witnesses said bus and taxi services remained on strike on
Friday from the highland capital Quito to the coastal city of
Guayaquil. Taxis parked across some streets to block traffic, while
demonstrators erected barricades with tires and branches.

As fuel prices soared from Thursday, masked protesters hurled
stones and set up burning blockades in the worst unrest for years
in the country of 17 million people.

Transport unions began the protests, but have been joined by
indigenous groups, students and other unions.

Moreno’s popularity has sunk to below 30% compared with above
60% after his 2017 election, but his political position appears
firm given support from the business elite, military loyalty, and
the lack of a strong opposition.

However, Ecuadoreans will be mindful that protests toppled three
presidents during economic turmoil in the decade before the
socialist Correa took power in 2007.

Moreno has declared a 60-day state of emergency.

By Friday morning, 350 people were arrested, mainly in Quito and
Guayaquil, the Interior Ministry said. Taxi union leader Jorge
Calderon was among those detained on Friday.

Some 28 police officers were hurt on Thursday, the ministry
added, as they deployed armored vehicles and tear gas. A police
module was burned and a dozen police cars destroyed in Quito, while
a local government building was attacked in the north, authorities
said.

‘TRANSPORT IN CRISIS’
Diesel prices have risen from $1.03 to $2.30 per gallon, while
gasoline went from $1.85 to $2.39.

Truck drivers’ leader Luis Vizcaino called for dialogue with the
government. “All Ecuador’s transport sectors are in crisis … we
have to reach a halfway measure,” he said.

Moreno said he was open to talks but there was no possibility of
restoring fuel subsidies that had damaged the economy and cost
state coffers $60 billion over the years.

“There will be mechanisms to ease the impact on some sectors,”
he added in comments to reporters in Guayaquil. “But listen
clearly: I am not going to change the measure, the subsidy is
finished, no more loafing.”

Rings of soldiers and police prevented protesters from reaching
his palace in Quito on Thursday evening, but authorities were
unable to stop some looting in Guayaquil.

Ecuador hopes to save about $1.5 billion a year from eliminating
fuel subsidies. Along with tax reforms, the government would
benefit by about $2.27 billion.

Ecuador has also begun laying off some state workers and is
leaving the Organization of the Petroleum Exporting Countries
(OPEC) to pump more oil and raise revenue.

It produces nearly 550,000 barrels per day.

Ecuador’s debt grew under Correa, who endorsed Moreno in 2017
but has become a critic of his successor’s turn toward more
market-friendly policies.

The government wants to reduce the fiscal deficit from an
estimated $3.6 billion this year to under $1 billion in 2020.

Moreno’s government has improved relations with the West and
reached its three-year, $4.2 billion loan deal with the IMF in
February, dependent on “structural measures” including raising tax
revenue and bolstering Central Bank independence.

The deal allowed Ecuador to receive an immediate disbursement of
$652 million and paved the way for an additional $6 billion in
loans from other multilateral institutions.

Skepticism of the IMF runs strong throughout Latin America,
where many blame austerity policies for personal hardships.

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