Ecuador Protests of 2019: A Victory for the People - but at what cost?
Written on October 30th, 2019 by {"login"=>"jcbitshyd", "email"=>"journal@hyderabad.bits-pilani.ac.in", "display_name"=>"Journal Club, BPHC", "first_name"=>"", "last_name"=>""}Democratic governments were envisioned to be led by the people's mandate, first and foremost. However, in today's day and age, the faith in democracies worldwide is slowly eroding. Massive corruption, unfulfilled promises, a general shift towards fervent nationalism, creeping of corporate interest are some of the many issues that fester in many governments today. Citizens may feel utterly helpless in the face for all this. The unfolding situation in Ecuador is an example of when this helplessness turns to outrage. It shows the true power that citizens hold but also shows how turning to violence and obstruction is the only way for their voice to be heard.
Background
Ecuador, like many other Latin American countries, has an economy heavily reliant on crude oil revenues, accounting for about one third of public-sector earnings in 2017. In the 2000s, high prices of crude fueled a fast-growing Ecuadorian economy. However, starting 2014, a general oversupply of crude oil in the world market lead to a crash in crude oil prices, which was a massive blow to Ecuador and the GDP growth had a dramatic slowdown.
On the political side of things, in 2007, the then-president Rafael Correa had made several policy decisions seen as populist, including investment in social welfare programs, reducing poverty and trying to improve the average standard of living in Ecuador. Correa borrowed heavily from external sources, especially China to fund his policies. These beneficial measures led to massive public approval of Correa, who was re-elected as President 3 times between 2007 and 2013 before choosing not to contest in 2014. However, this heavy borrowing combined with a declining Ecuadorian economy was a worrying combination. Public debt skyrocketed to a whopping $64 billion dollars and climbing. The newly elected president, Lenin Moreno (who happened to be a close aide and vice-president of Correa) was in a quandary. He had to decide between attempting to revive the economy and reduce debt, but at the cost of austerity measures or to continue Correa's policies of debt-fueled welfare spending which the public had come to rely on. Moreno ultimately chose to target the economy, a radical departure from the policies that had made Correa so popular.
Austerity measures were introduced in August 2018 in order to reduce public spending. The measures included reduction of fuel subsidies as well as reorganizing of many public sector entities. These moves were greeted with disdain by many groups, particularly those representing trade unions and indigenous groups. Moreno's approval ratings plummeted to 30% and public dissatisfaction began to manifest itself in the form of sporadic protests on the streets.
Then things finally boiled over when Moreno announced Decree 833 on 1 October of this year.
The Protests
Decree 833 was an unprecedented piece of legislation, outright abolishing fuel subsidies outright, decreasing the salary of temporary public workers by 20% and reducing other worker benefits. The removal of fuel subsidies lead to a 20-30% increase in fuel prices. This increase in fuel prices lead to a rise in input costs for many industries, leading to a situation where every part of the supply chain had to incur additional expenses. Consumers were struck by an increase in a myriad amount of their everyday goods and services. Decree 833 impacted society as a whole, but it hit the poor in Ecuador especially hard and there were no plans to soften the blow for them.
Decree 833 was brought into effect by Moreno as part of a deal with the International Monetary Fund [IMF], as part of the conditions to secure a badly needed $4.2 billion dollar aid package from them. While Moreno argued that the fuel subsidies were a 40-year old system and was costing the government $1.4 billion annually, the public was having none of it. The day after, transport unions went on nationwide strike. Bus, taxi and truck drivers blocked many major roads and bridges throughout Ecuador, crippling the country's transport network. Politically-significant indigenous people's groups began protests shortly thereafter, along with university students and labour unions. The protesters declared their intention to hold an indefinite general strike, which would last until the government overturned its decision. While the protests were initially peaceful, violence erupted after the demonstrators were met by police, who attempted to disperse them using tear gas. Demonstrators responded by throwing stones, Molotov cocktails and tube-launched fireworks at the mounted riot police officers sent to disperse them. Several instances of police officers being captured and paraded about were also reported. The Armed Forces had to be deployed by the government on 7 October to force protesters to release over 50 servicemen, who were being held captive by protesting indigenous groups.
Events took a turn for the worse when protestors tried, and succeeded in breaking into Carondelet Palace, the seat of the Ecuadorian Government. Moreno was forced to shift his government from Quito to the coastal city of Guayaquil on 8 October. Ecuador was thoroughly paralyzed and thousands of protestors continued to march and call for subsidies to return. Authorities even shut down oil production at the Sacha oil field, which produces 10% of the nation's oil, after it was occupied by protesters. Two more oil fields were captured by protesters shortly thereafter. In a desperate attempt to restore normalcy, Monero entered into negotiations with CONAIE, a group representing the indigenous people protesting sometime around the 11th of October. These negotiations were monitored by the United Nations and the Catholic Church. During the late-night hours of 13 October, the Ecuadorian government and CONAIE finally reached an agreement during a televised negotiation. Both parties agreed to collaborate on new economic measures to combat overspending and debt. The government agreed to withdraw Decree 833 and the protesters in turn agreed to end the two-week-long series of demonstrations and protests. While the protestors celebrated their victory, the average Ecuadorian could not help but heave a sigh of relief.
Conclusion
The Ecuador protests are a part of the wider discontent and turmoil present in Latin America. The crises, while obviously different for each country, have some common trends. The economy in much of Latin America has slowed. Democratic institutions remain weak and the public is becoming far less tolerant of corruption and poor services. This can easily lead to an out-of-control situation as was witnessed in Ecuador. It was a frightening display of the sheer anger felt by the people of Ecuador, with thousands of people from many walks of life fighting for a common cause. It was perhaps even a symbol or a rallying point for growing distrust of democratic regimes worldwide.
While the protestors can easily claim victory over the 'oppressive and 'tyrannical government, the ground realities are quite concerning. The use of violence by both sides has left several people dead and hundreds injured in the protests. The successful repeal of Decree 833 puts now the fate of the much needed IMF bailout in question. Monero's plan to revive the economy is eventually bound to come into conflict with the social welfare programs the people of Ecuador have come to expect. While the people have had their way in this case, there is no getting around the fact that Ecuador is in a downward spiral currently and in order to climb out of it, harsh decisions will have to be made eventually.