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Ecuador gov’t collapses amid popular protests
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A socialist newsweekly published in the interests of working people
Vol. 69/No. 18May 9, 2005


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lead article
Ecuador gov’t collapses amid popular protests
Capitalist crisis, austerity measures fuel upsurge
High school students join April 20 demonstration in Quito, Ecuador, to demand the resignation of President Lucio Gutiérrez. Banner reads “Ever onward to victory.”

In face of repeated demonstrations by tens of thousands against his government, President Lucio Gutiérrez of Ecuador fled into exile to Brazil April 24. He was the third president in that country since 1997 to be brought down by mass protests fueled by anger at brutal austerity measures against the living standards of working people.

Three days earlier, as antigovernment protests spread from the capital city of Quito and popular anger grew—especially after a short-lived state of emergency and the killing of two demonstrators by security forces—Congress voted to remove Gutiérrez. He was replaced with Vice President Alfredo Palacio.

The collapse of Gutiérrez’s government is the latest expression of the roiling discontent among working people and layers of the middle classes who have been squeezed by the capitalist economic crisis throughout Latin America. In Ecuador the wealthy have enjoyed the fruits of economic growth, while workers and farmers face a continuing plunge in living standards, fueled by austerity measures designed to boost the profit margins of foreign and domestic capitalists.

Newly appointed president Palacio, seeking to get the demonstrators off the streets, denounced his former colleague Gutiérrez as a “dictator.” He said it was “immoral that Ecuador spends about 40 percent of its national budget to service its $16.6 billion debt to international banks.”

Although Palacio quickly clarified that the government would continue making its debt payments, Standard and Poor’s said it might lower Ecuador’s credit rating because the recent unrest puts at risk the government’s ability to make a $75 million interest payment in May. Investors in the country’s debt bonds have been reducing holdings, Bloomberg news reported.

Antigovernment protests began to grow in mid-April. On April 15 Gutiérrez declared a state of emergency. Demonstrators defied the ban, which the government then hastily withdrew. The protests spread after police used tear gas to prevent a march of 30,000 on the National Palace on April 19.

The mobilizations that led up to Gutiérrez’s ouster were substantially smaller than the two-day strike and protests of 2 million that forced out President Abdalá Bucaram in 1997 and the storming of the National Palace by indigenous protesters in 2000 that brought down President Jamil Mahuad’s administration.

Gutiérrez had expressed confidence that his government would weather the protests, which had largely been confined to the capital and had been more heavily middle-class in composition than the popular mobilizations of 1997 and 2000.

But the Ecuadoran rulers decided they did not want a repeat of the previous upsurges. On April 20 the heads of the army and the national police withdrew support for the president. The attorney general’s office filed charges against Gutiérrez for “flagrant crimes” related to the deaths of two demonstrators. Congress voted to oust the president because he had “abandoned” his duties, and swore in Palacio.

That day Gutiérrez attempted to flee the country by military helicopter but protesters shut down Quito’s international airport. For three days he took refuge in the Brazilian embassy, and then flew to Brazil.  
Austerity measures spark protests
Gutiérrez, a former army officer, was elected in 2002 largely on the strength of his association with the popular revolt two years earlier that had toppled Mahuad, hated for his imposition of sharp austerity measures. While giving lip service to the poor, Gutiérrez carried out similar policies to those of his predecessors, earning him a reputation among Wall Street bankers as “fiscally responsible.”

Under “market reforms” prescribed by Washington, Ecuador’s economy grew 6.6 percent last year. LatinSource, a New York-based analyst of Latin American economies, praised Ecuador for “outperforming even the most optimistic scenarios,” according to the New York Times. The “fiscal growth” was paid for in sharply reduced spending on social services such as health care and education.

For example, at the Baca Ortiz public hospital in Quito, considered the country’s best children’s hospital, patients have to bring their own medicine and doctors say they lack clean facilities, decent wages, and even the most rudimentary equipment, the Times reported. Parents at the May 23 Elementary School in the working-class southern district of Quito pool their money to pay for blackboards, classroom benches, paint jobs, and teachers salaries. And conditions are much worse for the largely indigenous rural population.

Growing anger at government economic policies was compounded by the president’s political maneuvers. In December his congressional allies removed 27 of the 31 Supreme Court justices and packed the court with their own candidates. “The new court then suspiciously cleared several politicians in exile of corruption charges, including ex-president Abdalá Bucaram,” the Miami Herald reported April 25. Bucaram returned from exile just days after the court cleared him.

It was these kinds of conditions that sparked a popular revolt in 1997 that culminated in a two-day strike and protests of as many as 2 million people against the economic austerity measures imposed by Bucaram, in face of which Ecuador’s legislature decided to remove him. The strike was led by Ecuador’s largest organization of indigenous peoples, CONAIE (Confederation of Indigenous Nationalities of Ecuador).

In 2000 the government of Jamil Mahuad was brought down by another revolt. Ecuador’s parliament was occupied by thousands, again led by CONAIE and other Indian organizations. Among the measures that earned Mahuad popular hatred was the replacement of Ecuador’s sucre with the U.S. dollar as the country’s currency. With an exchange rate of 25,000 to one, already meager wages and savings were slashed overnight.

That revolt led to a short-lived provisional governing triumvirate consisting of the president of CONAIE; Gutiérrez, then an army colonel; and a former supreme court president. However, this provisional government voluntarily ceded power to the military, which then handed the government to Mahuad’s vice president, Gustavo Noboa. The Noboa regime prosecuted lower echelon officers associated with the revolt, among them Gutiérrez.

The new president, Palacio, has sought to distance himself from Gutiérrez. He has pledged to overhaul the country’s social security system and settle wage demands by state doctors, according to Bloomberg News. He said he would favor renegotiating terms of how monies from an oil stabilization fund are spent, 70 percent of which is currently set aside to make debt payments. Ecuador is South America’s fifth-largest oil producer.

Wall Street bankers have expressed concern over the instability in Ecuador and what it means for their profits. “The uncertainty over who will be the next president and what type of policies he will implement are enormous,” said Boris Segura of Standish Mellon Asset Management in Boston. “Today it’s the vice president, but nobody knows who will be in power the day after.”

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