Ecuador's President Jamil Mahuad was ousted late January 21. The country's defence minister and head of the military Carlos Mendoza removed Mahuad after the president refused to resign earlier in the day. In a series of rapid developments provoked by an uprising by Ecuador's indigenous people, Mendoza installed a three-person junta to replace the president. Mendoza cited the army's fear of a "social explosion" for his decision. Then, just as suddenly, early on January 22, Mendoza dissolved the junta and handed power to Mahuad's vice-president Gustavo Noboa.
Mendoza's decision to dissolve the junta was immediately denounced by its other members, Indian movement leader Antonio Vargas and former Supreme Court judge Carlos Solorzano. Vargas said the dissolution was a betrayal and that the movement by the Ecuador's Indians and poor for a new system of government free of corruption would continue. Mendoza resigned as armed forces head after he sacked the junta.
Mendoza said he decided to dissolve the junta after talking to United States' officials who had threatened to cut foreign aid and discourage investment. The overthrow of Mahuad and the appointment of the junta caused a panic in Washington. An emergency meeting of the Organisation of American States met in the US capital and adopted a resolution condemning Mahuad's overthrow.
The US embassy in Peru urged the Ecuadoran armed forces to back Mahuad. "Whatever regime arises from this unconstitutional process will confront political and economic isolation", the statement warned.
Associated Press reported on January 22 that in Guayaquil, 265 kilometres south-west of the capital, Quito, left-wing trade unions, students groups and neighbourhood associations seized the provincial government building.
The crisis began after thousands of Ecuadoran Indians seized control of the Congress building in Quito on January 21 in an attempt to overthrow Mahuad. At least two army units joined the Indian insurrection.
The highland Indians, who make up almost half of this South American country's population of 12.4 million, spent the previous night building a human wall around the Congress building. They slowly overcame a military and police barrier on Friday morning, and installed themselves throughout the building, including in the main chamber.
Indian leader Vargas proclaimed a new "government of national salvation", calling the rebellion a "bloodless revolution". Vargas is the president of the Confederation of Indigenous Nationalities of Ecuador (CONAIE).
The commander of the military unit which defected to the Indians, Colonel Lucio Gutierrez, said from the steps of the Congress building, "We have started a peaceful but unstoppable fight against another kind of slavery".
The "people's parliament" issued a manifesto rejecting Mahuad's plans to replace Ecuador's currency, the sucre, with the US dollar, and promising to establish an economy with new jobs and fair wages.
The uprising follows weeks of social unrest and more and more desperate measures by Mahuad to contain both the massive wave of protests and an economic meltdown.
On January 5, the day before a planned national protest against his government, Mahuad declared a state of emergency and ordered the military into the streets to keep order. Under the state of emergency, basic constitutional rights were suspended, including freedom of assembly and freedom of movement.
Four days later, Mahuad announced that his government would replace the sucre with the US dollar, fixing the rate at $1 to 25,000 sucres. The dramatic move followed the sucre's loss of 20% in the week of December 31 to January 6.
Despite intense police repression, protesters managed to stage actions on January 6. Peasants started the day by blocking provincial highways and in Quito about 1000 demonstrators, mostly students, tried to march to the Carondelet presidential palace, but were stopped by police with tear gas. Similar marches were broken up by police in Guayaquil and Cuenca.
At the centre of the protests are the Patriotic Front, an alliance of unions, peasant organisations, student groups, women's groups, neighbourhood organisations and business associations, and CONAIE, which represents the large Indian population.
Under Mahuad's rule, Ecuador has slipped into a deep economic crisis. Last year, Ecuador's annual inflation rate was 60.7%, the highest in Latin America, the gross domestic product shrank by 7.3% and unemployment rose from 12% to 17%. The average salary lost a fifth of its value between August 1998, when Mahuad took office, and January, and the poverty rate has jumped to 70% of the population.
The government has blamed the protests on subversive movements conspiring to destabilise Ecuador. But according to a poll released on December 31 by the private Cedatos firm, only 9% of Ecuadorans support Mahuad, while 69% believe the protests against him are justified. Even the business community has called for the president's resignation. Mahuad insists he will finish his term, set to end in 2003.
The Patriotic Front and CONAIE are demanding more than just Mahuad's resignation; they say the executive, legislative and judicial branches are thoroughly corrupt and must be dismantled.
Finance minister Alfredo Arizaga explained that fixing the sucre's exchange rate will be the first step in Ecuador's "dollarisation", to be followed by asking Congress for legislation to replace the currency. Ecuador's hard-currency reserves are now at $1.276 billion, and it is not clear how the country will be able to back up the fixed exchange rate.
The Central Bank's board approved the plan on January 11, but only after the resignations of bank president Pablo Better, general manager Virginia Fierro and assistant manager Patricio Proano. Fierro had warned the week before against "introducing rushed, crazy measures".
Leaders in Ecuador's grassroots movements were more scathing, suggesting that prices will rise under the plan while wages remain low. Ricardo Ulcuango Farinango, vice-president of CONAIE, called the plan "a low blow against the economy of Ecuador's poor".
On January 8, US president Bill Clinton contacted Mahuad to express his support during the crisis. US treasury secretary Lawrence Summers told reporters that the "achievement of stability and confidence in Ecuador was very much in the interest of the US".
According to the New York Times, Mahuad's plan to dollarise the economy may have been intended chiefly to confuse and weaken protests by opposition forces demanding the president's resignation. "With this measure, Mahuad has been successful in changing the national agenda, removing his person as the focus of debate and substituting something new", Simon Pachano of Quito's Latin American Faculty of Social Sciences told the New York Times. Clearly, that plan has not worked.
Following the protests on January 6, unions began taking rolling industrial action across the country. The Federation of Urban Transportation Workers of the Guayas went on strike on January 10 in Guayas province, where Guayaquil is located. But the 3500 members grouped in 61 cooperatives are losing about $500,000 a week, and it is not clear how long they can hold out.
Oil workers are to start an open-ended strike on January 17 against the dollarisation plan. An indigenous uprising, which CONAIE said would start disrupting transport on January 15, initially failed to close more than a few highways, according to news services.
A major factor in slowing the protests was undoubtedly the presence of 30,000 soldiers and police agents throughout the country, backed by the state of emergency. But, by January 21, CONAIE says a similar number of supporters had infiltrated the capital, through the heavy cordon of security.
[Based on information from Weekly News Update on the Americas,