Workers and peasants from town of Pilahuín, Ecuador, who organized daily roadblocks, return to their homes after forcing government to retreat from austerity moves.

Indigenous peoples had organized a national mobilization with marches and road blockades since January 28, calling for cancellation of the price increases on basic necessities. They persisted even when the government declared a state of emergency in an attempt to quell the protests. Since the beginning of the action, the indigenous people faced military and police repression that twice stalled talks with the government and left four dead, dozens wounded, and hundreds in jail.

On February 7, President Noboa met at the government palace with Antonio Vargas, president of the Confederation of Indigenous Nationalities of Ecuador (CONAIE), the largest indigenous movement in the country; Pedro de la Cruz, president of the National Federation of Peasant, Indian, and Black Organizations (FENOCIN); and other leaders to sign a 23-point agreement to ease the austerity package.

The government measures instituted in December increased the price of a cylinder of cooking gas by 100 percent, to $2.00. Noboa agreed to roll the price back to $1.60. Gasoline prices, increased by up to 25 percent, will now be frozen during 2001. Bus fares, which skyrocketed by 75 percent, will be reviewed. Meanwhile, the government pledged to implement a half price transport fare for children, students, the elderly, and disabled. In addition, Noboa agreed to release indigenous leaders and protesters arrested during the mobilization, pledged to aid migrant workers within the country and those who emigrate to other countries, and to not "accept regionalization of Plan Colombia," Washington's military buildup across from Ecuador's border.

The measures were among the conditions worked out between Noboa's administration and U.S. and other finance capitalists acting under the umbrella of the International Monetary Fund (IMF). The IMF said Noboa had to deliver on the austerity measures in order to secure a new $2 billion package of loans.

"This is a triumph," said Luis Chango, a 19-year-old indigenous from Cotopaxi, 60 miles from Quito. "It shows that we are strong and can defend our rights."

Some 4,000 indigenous people staying at the Salesiana Polytechnic University near downtown Quito celebrated the victory with dance and music played with traditional instruments. The university had become an organizing center base for the protests, with support from the students. As the indigenous leaders arrived, they marched through the streets waving flags of the indigenous peoples and Ecuador, chanting "Long live Ecuador, long live the indigenous peoples," and in Quichua, "Shuc Shungulla," ("We are one heart"). Students also joined the march. On February 13 the government lifted the state of emergency it had imposed February 2.

The Ecuadoran daily El Universo interviewed Maria Mercedes Vega, a 20-year-old farmer from Rumichaca, a rural town of 1,200 west of Cotopaxi, who came to Quito with her husband and two small children for more than two weeks to "support the uprising." Mercedes said she and her husband only make $30 a month when prices are good. For this reason her husband works loading trucks to supplement their income between harvests.

The uprising against the devastating impact of the price increases came after more than a year of government attacks and working-class and indigenous resistance. Last January, workers and peasants marched on Quito, Guayaquil--the main port city--and other towns in response to plans announced by then President Jamil Mahuad to make the U.S. dollar the Ecuador's official currency, to impose austerity, and to allow the U.S. military to set up a base in the country. The actions forced Mahuad to resign.

A short-lived three-person junta came to power, composed of CONAIE president Vargas; Carlos Mendoza, an army colonel involved in the uprising; and former supreme court president Carlos Solórzano. The U.S. State Department then muscled in and pressed the military to dissolve the junta and put vice president Noboa in the presidency.

Since the dollarization plan became law in March 2000, the number of people living below the poverty level has increased from 70 percent to 79 percent. The statutory minimum wage in Ecuador is $132 a month, but few indigenous people earn even half this amount. The Financial Times, reporting that Noboa's first year "has brought stability," tamed inflation, and boosted oil exports, added, "But the rural poor have seen little benefit and suffered from price increases on basic commodities."

The United States is Ecuador's biggest trading partner, purchasing 39 percent of the country's exports and selling it nearly one third of its imports. U.S.-based Occidental Petroleum Corp. is leading a consortium that plans to invest $1.1 billion to build a pipeline and extract oil from the Ecuadoran Amazon. And Washington is expanding its military base in the port city of Manta to the tune of $62 million this year for airport improvements and housing.

This is the backdrop for the powerful response to the Noboa government's December move to substantially raise prices.

Leaders of CONAIE and other organizations of indigenous people began organizing what grew into sizable and militant actions. They joined coalitions of students and workers in nationally coordinated protests January 21-22 and set up roadblocks throughout the country. Vargas, along with other leaders, was arrested January 29 on charges of "subversion," but was subsequently released.

The state of emergency, imposed February 2 by Noboa, allowed the government to search homes, limit public meetings and nationwide travel, and deploy the army and the police as it saw necessary.

The government's failure to repress the protests did not go unnoticed. The Quito daily El Universo commented February 8 that "analysts consider that the government underestimated the uprising." So did the Ecuadoran capitalists, it would seem. In the same issue, which published the accord and contained photos of triumphant workers and farmers taking down their barricades, there was a half-page declaration signed by leaders of industry and the chamber of commerce titled "Chaos cannot continue." The business leaders denounced the protesters' disrespect for "law and order," accused "outside elements" of infiltrating the indigenous movement, and praised the army and police for their "patriotic work."

Within a few days of the accords, however, government officials were trying to take back what they had conceded. On February 9, Rodolfo Barniol, president of the state-run oil company Petroecuador, announced that within four to six weeks only the poorest 30 percent of the population would be eligible to buy cooking gas at $1.60, and "the rest of the populace will go back to paying the $2 per tank price that's been in place since December." The central bank of Ecuador claims that each canister costs $5 and that it aims to lower the subsidy the government spends each year.