Sunday, October 06, 2019

Economic Austerity for Ecuador

Indigenous organisations and workers' groups in Ecuador have vowed to continue protests against President Lenin Moreno's scrapping of decades-long fuel subsidies. Moreno, who took office in 2017, refused to back down over the austerity policy, imposed under a deal with the International Monetary Fund (IMF) that doubled the price of fuel overnight and sharply raised gasoline prices. Moreno told reporters: "Listen clearly. I am not going to change the measure. The subsidy is finished."

Moreno's government recently reached a three-year, $4.2bn loan deal with the IMF, contingent on belt-tightening economic reforms. The deal allowed Ecuador to receive an immediate disbursement of $652m and paved the way for an additional $6bn in loans from other multilateral institutions. Moreno said the fuel subsidies, in place for four decades, had distorted the economy and cost $60bn. Diesel prices have risen from $1.03 to $2.30 per gallon, while gasoline went from $1.85 to $2.39. Ecuador hopes to save about $1.5bn a year from ending fuel subsidies.

"The student, workers and indigenous movement will not stop," the Confederation of Indigineous communities wrote on Twitter. "We will continue, indefinitely, until we end with these neoliberal measures." 

Mesias Tatamuez, head of the Workers' United Front umbrella union, called for a national strike on Wednesday. 

"The Ecuadorean people are indignant at this package, which is a prize for businessmen and bankers, to comply with the IMF's recipe," he said. 

Moreno's popularity has sunk to below 30 percent compared with above 70 percent after his 2017 election. 

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