Ecuador in crisis: popular forces organise

December 1, 1999

By Jorge Jorquera

QUITO — On November 23, thousands of Amazonians marched and rode on horseback into Ecuador's capital, as part of a nationwide march "against being forgotten". Their principal demand was that US$2 from every barrel of oil exported should be put into regional development.

The marchers were joined by workers and students organised by the Patriotic Front and the Popular Front, both spearheaded by the Popular Movement for Democracy (MPD), whose two parliamentary deputies have stood out against parliamentary deals over the 2000 budget.

The march is only one of the many growing expressions of social unrest. Ecuador's economy is in deep crisis. Inflation is the highest in the continent — the exchange rate between the US dollar and the national currency, the sucre, has deteriorated from 7000:1 to 19,000:1 in months. In the past year, half of the private banks have been taken over by the state; 2200 firms have closed.

An extra 200,000 people have become unemployed. UNICEF believes that within a year it is possible that half of the population will live in official poverty, with an income of less that US$2 a day.

The day after the march on Quito, the parliament begun debating the nation's 2000 budget. Almost no sector of parliament wants to be seen to support unconditionally the recipe proposed by President Jamil Mahuad on behalf of the International Monetary Fund. The IMF's John Thorton arrived in Quito on November 21, to advise the government on the IMF's conditions for granting a promised US$400 million over the next 14 months.

The budget proposes to allocate 54% of national income to foreign debt repayment. To complement the budget measures, it also proposes to increase indirect taxes from 10% to 15% and continue privatisation.

These measures will not be accepted by the workers and poor communities. This much has already been demonstrated by strikes of transport and other workers and the growing struggles, in various regions, of indigenous and peasant communities. The powerful CONAIE, the umbrella organisation of indigenous communities, has ended negotiations with the government and signalled its willingness to work with other social sectors.

Even the ruling elite, with the exception of the IMF-aligned technocrats around the current president, is searching for compromises that may at least stave off further social struggle.

The establishment parties, which hold a majority in parliament, want to impose only minimal budget changes on Mahuad. These would consist of marginal increases in social spending and a reduction of money allocated for debt repayment. But these parliamentary parties have not opposed the use already this year of US$2 billion to rescue failing private banks.

Neither the unions nor the community organisations have, as yet, accepted such a compromise stance, nor do they look likely to.

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