Ecuador protest ends with indigenous groups, government deal

Bloomberg

Representatives of indigenous organizations and Ecuador’s embattled government signed an agreement to end more than two weeks of nationwide protests over fuel prices and the high cost of living.
Mediated by the Catholic Bishops Conference, the government of President Guillermo Lasso agreed to increase subsidies at the pump. With other measures pledged by the conservative administration, the total is close to $1 billion, said Leonidas Iza, president of indigenous confederation CONAIE.
“We are going to continue our fight, but at this moment, according to the document that we’ve signed, comrades, at the national level we are going to suspend the de-facto measure,” said Iza, referring to road blocks that have strangled transport across large parts of the country. We have reached the supreme value we all aspire to: Peace in our country,” said Lasso via Twitter. “Now together we will start on the task of transforming this country in progress, wellbeing, and opportunities for all.”
Social pressures are unlikely to permanently go away, however. Lasso “is going to face very persistent threats of social unrest and demands for spending along with potential renewed efforts to remove him from office,” Risa Grais-Targow, Latin America Director at Eurasia, said. “He is getting squeezed.”
The protests slashed output of crude oil, the former OPEC member’s main export, and hit retail sales. The damage to the economy “evidently will be superior to the $800 million” of a previous indigenous protest in 2019, said Guillermo Avellan, Ecuador’s central bank chief, in an online press conference. “Close to 2.1 million barrels of oil have not been produced.”
The bank therefore no longer expects to increase the full-year gross domestic project growth outlook from the previous 2.8% for 2022, he added.
Subsidies, Agreement
The signing of the agreement, which the Church brokered in just hours, was delayed by last-minute demands and haggling over details amid the indigenous organizations, who finally publicly approved it through shows of hands. “Our democracy is complicated,” said Iza.
The government agreed to extend offers made during the course of the 18-day often violent protests that included attacks on military convoys transporting food, fuel, and medicines, leaving one soldier dead and dozens of police and military wounded. At least two civilian deaths have been reported. The government pledged to further cut diesel and gasoline prices accounting for close to 97% of demand by another 5 cents per gallon. This reduction comes on top of the 10-cent cut enacted earlier this week, which will increase fuel subsidies by a total of roughly $340 million in 2022 in addition to the $3 billion cost of the subsidy program, the Finance Ministry said.
The government also pledged to lift a state of emergency issued just 24 hours earlier and to cancel an executive decree aimed at increasing oil output. A decree to spur mining development will be changed to add additional environmental protections and to respect archaeological remains.