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Gutiérrez running out of allies.

The policy changes made by President Lucio Gutiérrez, which began with an economic adjustment that pushed up the prices of fuel and transport (LP, Feb. 12, 2003), has resulted in a long list of errors and retractions and diminishing credibility. Sectors of the political right are now the protagonists of walkouts and hunger strikes. Members of the national teaching union (UNE), who, until recently, shared power breakfasts with the president, went on strike at the beginning of May, demanding salary increases.

"Lucio Gutiérrez lied to us. He said he would initiate significant State reform that would benefit the poorest sectors, but this has not happened. Instead, he has tried to create a repressive State," said Gustavo Terán, a UNE leader, after participating in a march that was aggressively repressed by the National Police.

The fast-tracked agreement with the International Monetary Fund (IMF), made at the start of the Gutiérrez term in January, led to distrust amongst his indigenous allies. As the main political force behind the president’s success, they felt they should have been consulted on the terms of the agreement. All he told them was that the IMF agreement would settle the fiscal deficit inherited from the previous government and help cough up unpaid wages in the public sector, especially amongst health workers and teachers. The agreement gave the government an immediate payout of US$70 million, a program of short-term loans worth $600 million and a more ambitious loans program worth $3.8 billion over the next four years.

These early economic measures, combined with the president’s desire to be "the United States’ best ally," were accepted at the time by the Ecuadoran public and justified by the leaders in the social and indigenous movements.

"The agreements include a social program," said Miguel Lluco, leader of the Pachakutik movement, the political arm of the Confederation of Ecuadoran Indigenous Nationalities (CONAIE).

Leonidas Iza, CONAIE president, also confirmed the alliance, despite the opposition of various provincial indigenous groups who pushed for the indigenous movement to withdraw its support for the Gutiérrez government.

One of the sectors most critical of the alliance now is the Ecuadoran Confederation of Kichwa People (Ecuarunari), which groups together indigenous communities from the Ecuadoran Andes and forms CONAIE’s backbone.

"President Gutiérrez is changing direction instead of meeting the agreements," said the new Ecuarunari president, Humberto Chorlango, elected April 22 by the Kichwa National Congress in Chimborazo province. Ecuarunari withdrew its support for Gutiérrez at the congress.

The Ecuadoran Federation of Protestant Indigenous Peoples and the Ecuadoran Federation of Campesino, Indigenous and Black Organizations have warned the government of imminent protests if Gutiérrez does not meet his campaign promises.

As if the opposition of the indigenous movement was not enough, Gutiérrez has also made political enemies of the powerful energy sector unions. On June 11, he ordered the militarization of the state-run Petroecuador’s operations to ensure the flow of fuel after 4,000 workers went on strike demanding the resignation of Energy Minister Carlos Arboleda and the suspension of talks to allow the exploration and exploitation of oilfields in indigenous territory, increasing already existing tensions in the Ecuadoran Amazon over the presence of oil companies (LP, March 26, 2003).

For their part, electricity sector unions rejected the possibility that State energy producers are to be handed over to private international administrators, announced by Gutiérrez as one of the points of IMF agreement, which also includes a hike in the price of domestic gas, from $1.60 to $6.00, planned for 2004.

"Gutiérrez is giving us a clear signal that his government is neo-liberal, that he is facilitating the privatization of State resources," said Edgar Ponce, one of the electricity sector’s figureheads.

However, the President insists that the electricity sector is sore at his decision to end the so-called "collective contracts," which guarantee labor security and good wages. At the same time, according to Gutiérrez, the decision to level out public sector salaries over four years also rankles. His plan to achieve this involves freezing the high incomes of people working in oil, the Central Bank, the Institute of Social Security and other privileged government offices, and increasing the salaries of less-rewarded government sectors, like teachers and health workers.

Gutiérrez has had a positive impact with measures such as the introduction of an Andean common duty, which consolidates regional commerce, represents a major stumbling block for the implementation of the Free Trade Area of the Americas (FTAA) (LP, Dec. 2, 2002). He has also strengthened the National Credit Bank, introduced an infant nutrition program, called Operation Infant Rescue, and assigned funds to promote micro-finance and diverse social assistance programs, achieved by means of agreements with the Andean Development Corporation and the Inter-American Development Bank. However, all of this progress has been lost in a blur of scandals involving his family or close collaborators.

It is the concentration of power in the hands of the president, his relatives and military supporters, on top of the economic policy, that irritates the indigenous movement.

"I must choose people I trust," said the president in an attempt to justify the appointment of his supporters. However, the militarization of State entities, such as the Ecuadoran Customs Corporation, telephone companies and the Ministry for Social Welfare, and the appointment of relatives, has resulted in more than one accusation of nepotism.

Furthermore, corruption scandals have plagued the president’s administration. Napoleón Villa, brother-in-law of Gutiérrez and president of the Solidarity Fund, had to resign over corruption charges. The housing minister also went, over charges of fraud, as did the national secretary of public information, after a supposed million dollar foreign investment was discovered to be false.



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