Pandemic behind Ecuador’s economic crisis

Ecuador in north-west south America is experiencing the economic effects of the COVID-19 pandemic with the economy shrinking, and the people unable to bear the costs of living. It is the same problem that many countries in Europe, Africa and Asia are facing too.

But the discontent in Ecuador had broken out on the streets with the large organisation of native people, a mixed race of Spaniards and Amerindians, comprising 70 per cent of the mestizo population, protesting fuel prices. President Guillermo Lasso cut the oil prices by 10 cents per gallon of gasoline and diesel. The protesters found it unacceptable.

Owing to the protests, oil production has halved, and the government warned that unless barriers are removed, oil production would come to a halt. Export of oil is one of the chief exports of Ecuador.

The protests have been on since June 13. President Lasso imposed emergency and then lifted it. He has also withdrawn security measures and offered fertiliser subsidies and debt forgiveness.

But the main issue was the fuel price. The 10-cent reduction brought gasoline down to $2.45 a gallon, and diesel to $1.80 a gallon. The Confederation of Indigenous Nationalities of Ecuador (CONAIE), the organisation representing the indigenous groups, said in a statement, “It’s an insufficient decision, without guarantee and which does not alleviate the poverty faced by millions of families.

Our fight does not end, nor does the right to resistance, and protest remains in force.” In a tweet the president said that his measures including the gas price cut cost the government $600 million.

Meanwhile the economic costs of the protests mounted to $500 million according to one count. Meanwhile, President Lasso is facing a motion in the national assembly seeking his removal.

Ecuador, which is home to the Galapagos islands, which gave Charles Darwin the empirical evidence to build his theory of evolution, has gone through many political and economic upheavals in the decades since its independence from Spain in 1830. In the early part of the 21st century, the country found a popular leftist president in Rafael Correa, who was in power from 2007 to 2017 and introduced economic measures which sought to give the poor people a fair deal.

It was in this period that Ecuador had also adopted a new constitution in 2008. Correa like his friend in Venezuela, Hugo Chavez, adopted an adversarial relationship with the United States and gave asylum to Julian Assange, the Australian journalist who released the Wikileaks exposing the many secrets of America’s dirty war in Afghanistan.

But his successor Lenin Moreno, who came to power in 2017 tried to strengthen the economy through free market measures. But this has only accentuated the inequality in Ecuadorean society, and which has resulted in the wide protests of this month.

Lasso had supported Moreno’s policies and had continued with them when he took over as president. It has not helped much in dealing with the worsening economic crisis in the country. Alfonso Estrela, 47, a construction worker told Al Jazeera: “We came here to claim our rights, because the government has done bad. Within one year everything has increased.

How much were getting paid during Correa’s time? $170. How much are they paying now — $100. My family of five people, imagine that. How are we going to survive on this?”

After the talks on Saturday between the government and the protesters, the president’s office issued the statement saying :“The national government ratifies the willingness to guarantee the creation of spaces for peace, in which Ecuadoreans can gradually resume their activities.”

The crisis is not at an end. And there are no easy ways out. The protesters and the government have to engage in difficult talks.