ECUADOR: Strike forces tax backdown

Issue 

BY SEAN HEALY

Ecuadorian President Gustavo Noboa has backed down on a June presidential decree to impose a 2% sales tax, after a two-day general strike on August 8-9 brought the South American country's economy to a standstill and tens of thousands of workers, farmers and urban poor into the streets of the main cities.

A constitutional tribunal had ruled the tax increase unconstitutional, but Noboa had been threatening to implement it anyway, claiming it was a condition of an International Monetary Fund package signed in April.

Speaking at Independence Day celebrations on August 11, Noboa said that he would implement harsh spending cuts instead of the tax.

On August 8 and 9, strikers took to the streets of the capital Quito, the port city of Guayaquil and other main towns in the small Andean country of 13 million, marching on government buildings and blockading major roads.

Security forces mobilised in heavy numbers, in Guayaquil using tear gas on a peaceful protest in front of the provincial government building. Elsewhere, police launched a brutal assault on a protest by university students.

Top of protesters' list of demands was opposition to the IMF-enforced austerity package, which includes privatisation of the electricity sector, bailouts of corrupt banks, cuts to social security and the dollarisation of the Ecuadorian economy.

Workers also called for an end to a controversial new oil pipeline, funded by big Western banks including Citibank, JP Morgan and Deutsche Bank, which would transport crude oil from the fragile eastern rainforests to the Pacific coast.

The general strike followed weeks of civil disobedience actions, protest marches and strikes. Protests will culminate in a National People's Assembly of Ecuador on August 18 in Quito.

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