Ecuador: Neoliberal reforms face broad opposition

Ecuadorian President Guillermo Lasso's support has eroded rapidly and he now is confronted by stiff opposition. Photo: Flickr

Ecuadorian President Guillermo Lasso’s support has eroded rapidly and he now is confronted by stiff opposition. In office since May, Lasso's neoliberal economic policies and proposals are facing determined opposition from diverse social sectors. A major lawsuit was filed this month to limit a dramatic expansion of mining and petroleum extraction, which strikes at the heart of Lasso's plans for economic recovery.

At issue are the economic policies Ecuador will pursue as it struggles to recover from a deep pandemic-related recession and massive unemployment. Lasso is facing opposition in the National Assembly, legal challenges in the courts, and militant protests in the streets. Also at issue is the future of Lasso’s presidency — Ecuador has a history of forcing unpopular presidents to leave office early.

Lasso, a right-wing former banker and one of Ecuador’s richest people, had been riding high in opinion polls based on the government's highly successful vaccination campaign, which has dramatically brought down hospitalisations and deaths from COVID-19. As public attention shifted to Lasso's economic policies, his popularity sank rapidly. A published by Perfiles de Opinion found that those thinking Lasso was doing a very good or good job fell to 34% last month, down from 74% in July.

Discontent with Lasso's policies boiled over into militant protests last month. The protests were led grassroots organisations, including CONAIE, the umbrella confederation of Indigenous organisations; the Unitary Workers Front (FUT), the largest union federation; the National Union of Educators; the Popular Front, a grouping of 14 organisations; the National Agricultural Front for Food Sovereignty of Ecuador (FENASAE); the National Confederation of Peasant, Indigenous and Black Organisations; and the Federation of University Students.

Wave of protests

A common cause of protest is the rising price of petrol, which is driving up prices on all goods. It has also put Lasso at odds with trucking, bus and taxi companies, who have demanded fuel subsidies and increased fares. Bus services were limited in protest in several cities.

Although a common concern, protests are not solely over the price of petrol. The protests were called by unions opposing reforms to labour law; farmers and campesinos protesting the prices they are paid for their goods; teachers protesting pay cuts and pension problems; students protesting cuts to education and increased fees; and doctors protesting the lack of medicines and supplies, as well as working conditions. It is a broad opposition, but it is fractured by persistent divisions of which Lasso has sought to take advantage.

Protests were called by FENASAE on October 18, led by farmers protesting inadequate prices paid by the government for their crops. Protests broke out in five provinces. The most militant was in the province of Carchi, along the border with Colombia, where protesters blocked a portion of the Pan-American Highway with heavy equipment and burning tyres. Highways into the main port city of Guayaquil were also blocked in three other provinces. Protesters demanded a freeze on the price of fuel and a fair price for their crops. Cab drivers and truckers also blocked the southern entrance to the city of Tulcán.

Hundreds of workers from FUT marched to the National Assembly in Quito on October 20 to present their proposal to counter the labour law reforms proposed by Lasso.

Lasso and hundreds of his supporters also held a rally in front of the presidential palace in Quito that day. Lasso urged his supporters to “defend Quito” from those he called “coup plotters”. “This hand will continue to be extended for a democratic dialogue, but if we have to forcefully wield the Constitution to confront the coup plotters we will do it decisively and without fear,” he said.

In response to protests, Lasso announced on October 22 that there will be a freeze in further monthly increases in the petrol prices for an unspecified period. The announced freeze is at a higher price than last month and it didn't end the protests.

On October 26 and 27, the number of protests and road blockades increased from five to nine provinces. Protests were largest in the north and along the Pacific coastal region. Protesters blockaded major roads in nine provinces, and demonstrations were held in cities. The Pan-American Highway north of Quito and highways into Guayaquil were among those blockaded by protesters with trees, rocks, burning tyres, and sometimes heavy vehicles. In some areas, protesters reportedly played cat and mouse with army troops that dismantled barricades, only to see them re-established.

Imbabura province, north of Quito, was again a centre of the protests. Imbabura was also the centre of protests and road blockades in 2019 that paralysed the country for eleven days and forced then-president Lenin Moreno to temporarily back down from fuel price hikes. In October that year, thousands of Indigenous protesters played a key role when they marched from Imbabura into Quito to join thousands of other protesters.

This time, the main roads into many towns in Imbabura province were blockaded. There were reports of entire communities voting to join the paro (strike). Then, as the protests appeared to be gathering strength, the leaders suddenly proclaimed the protests a success. Leading organisations announced that the protests will be temporarily suspended as Ecuador headed into a five-day holiday weekend.

Leaders called upon the government to negotiate with them or face renewed protests. “We believe we have delivered our message to the government and we await their response ... if we do not receive satisfaction we will consider calling a national strike after the holiday,” said Ángel Sánchez, president of FUT, reported by .

The suspension of protests will provide the opportunity for negotiations. These protests have demonstrated that the opposition has power in the streets to go along with votes in the National Assembly. Lasso has indicated some capacity to compromise on his neoliberal agenda. He has entered into negotiations regarding fuel subsidies for the poor, truck and bus companies and taxi drivers, as well as with farmers over the prices the government pays for their goods, but these negotiations have yet to produce results.

“The government never listens to us. We are waiting for definitive answers. Every time there is a strike it makes a proposal and does not comply with it,” said one rice producer who preferred not to be named, reported El Universo.

Leonidas Iza, president of CONAIE, demanded that all negotiations be public.  “I want full transparency and for everyone to hear what is said. No more government deceit.”

Attacks on workers, austerity

What Lasso's opponents have in common is that they are all protesting against aspects of his neoliberal economic agenda. Lasso wants prices to incrementally be reset to world market levels, including domestic petrol prices. All goods in Ecuador are transported by trucks (there is no freight rail system), so rises in the price of petrol and diesel have led to inflation of virtually all goods. 

While Lasso wants Ecuadorians to pay world market prices for commodities, people's average income is a fraction of those living in wealthy countries.

Lasso is proposing a major overhaul of labour law to allow employers to more easily hire and fire workers, and avoid paying social security and other benefits to  temporary workers. There is massive unemployment: Only about 30% of the working age population is officially employed, according to Humberto Salazar, a leading advisor to Lasso, and Executive Director of the Esquel Foundation.

Lasso is an advocate of international free trade agreements and has signed agreements that left Ecuador's farmers vulnerable to price competition from countries with more industrialised agriculture. Ecuador's economy is primarily agricultural, and much of the population relies on small farms. Rice and banana growers have been holding sporadic protests on the coast since August, demanding a better price for their goods.

Government austerity is also central to Lasso's plans. He has vowed to continue cuts in government services and layoffs of government employees which began under Moreno. Lasso's ideology favours privatising government assets and services.

Most of Lasso's economic policies and proposed reforms are in line with recommendations by the International Monetary Fund and international banks that have loaned Ecuador money.

Opposition

The course of Lasso’s presidency may depend on his ability, or inability, to compromise with opponents on his policies and proposals. Lasso can be expected to try to keep the opposition fractured by continuing to pursue separate negotiations with different sectors.

The National Assembly has twice rejected Lasso's reforms package, but at least some of the votes cast against it were for technical reasons and the extent of substantive opposition is unclear. The votes against Lasso's reforms were led by legislators of the progressive Union for Hope alliance, the largest block in the National Assembly. The alliance is mainly comprised of the left-wing Citizens Revolution party, supporters of former President Rafael Correa.

While staunchly opposing Lasso's neoliberal economic reforms, Citizens Revolution has kept its distance from the protests. The party supported mass protests in 2019 and was accused of subversion by the government, which went so far as to arrest and prosecute Paola Pabón, the Prefect of Pichincha province.

Two parties in the National Assembly that are formally allied with Lasso's party, known as CREO (Creating Opportunities), the Pachakutik Plurinational Movement and the Democratic Left parties also voted down Lasso's package of reforms. CREO has only 12 of 137 seats in the National Assembly. Lasso has approached both Pachakutik and Democratic Left about possible revisions to win approval for his proposed reforms. 

The National Assembly is also investigating Lasso regarding foreign investments in tax havens, which are illegal for politicians under Ecuador's laws. Lasso was named in recent disclosures of the . Lasso has asserted that he no longer holds such investments and ended them before he ran for president in 2017. Should the investigation find that Lasso lied about his investments, he could be sanctioned or even impeached.

Lasso can't count on a lot of help in the National Assembly from Ecuador's other major right-wing party, the Social Christian Party, which had joined with CREO in nominating Lasso for president. CREO and the Social Christian Party fell out when the latter was excluded from the current governing coalition in the National Assembly.

Lasso has threatened to dissolve the National Assembly, which would require new elections for both the assembly and president. In the period prior to the new elections, Lasso would be able to govern by decree. It is a high-risk strategy that Lasso could win, but if he does not, it would mean an early end to his presidency.

Previously, Lasso had also threatened to put his proposed reforms to a popular vote by referendum, which two previous presidents of Ecuador have done successfully.  Whether Lasso's neoliberal reforms are popular enough to win a majority of voters is in question.

In addition to Lasso's problems with street protests and in the National Assembly, on October 18, the first in what is expected to be a series of lawsuits was filed on behalf of Indigenous organisations aimed at limiting Lasso's plans to greatly increase mining and petroleum extraction.  reported, “hundreds of Indigenous elders, youth, and leaders arrived in the capital city of Quito, having journeyed from their communities deep in the Amazon rainforest”. The case seeks to block Lasso's Executive Decree 95, which will deregulate the oil and gas industry. 

Another lawsuit is expected to be filed soon to stop Executive Decree 151, which critics maintain relaxes environmental controls on mining in the Amazon region.

The lawsuits will attempt to build upon a landmark court decision last year regarding the rights of Indigenous communities, “that recognises their collective right to free, prior, and informed consultation and, in some cases consent, before the legislative or executive branch enact new laws or regulations that affect them”.

The court cases will be another chapter in the long history of Indigenous communities fighting to prevent mining and oil extraction that pollutes their ancestral lands and the water they depend on.