Violent protests over food and fuel prices bring Ecuador to a standstill

Indigenous-led protests over food and fuel prices have paralysed Ecuador for almost two weeks, threatening to unseat conservative president Guillermo Lasso and overturn one of Latin America’s dwindling number of investor-friendly governments.

Demonstrators have set up roadblocks using burning tires and branches to cut off major routes to the capital Quito. Clashes between protesters and soldiers and riot police have also disrupted supplies of food and other necessities, severely disrupted transport and halved output of oil, Ecuador‘s main export.

A protester was killed on Thursday and dozens more injured during clashes near the National Assembly, bringing the total death toll among demonstrators to five, according to officials.

Indigenous groups said the victim died of pellet wounds fired by police but this is disputed by the government. Ecuador’s Alliance for Human Rights has reported that at least 90 people have been injured in clashes and a further 94 detained.

The UN, EU and the Catholic Church have pleaded for negotiations but Leonidas Iza, the anti-capitalist leader of the powerful indigenous federation Conaie, has said the government must first lift the state of emergency declared on June 20 and withdraw security forces.

“The state does not want to listen to public opinion,” said Conaie communications chief Andrés Tapia. “Iza had hoped the president would give us an answer, [but] days later there’s no response and violent repression. ”

Lasso has declared a state of emergency in six provinces and accused the protesters of wanting to overthrow him. He has so far refused to cede to demands for increases in fuel subsidies, price controls on food, a halt to new mining and oil exploration and an end to privatization.

Juan Carlos Holguin, Ecuador’s foreign minister who spoke to the Financial Times on behalf of the Lasso government, said the authorities were willing to “exhaust all possible channels of dialogue” with indigenous leaders in order to restore stability.

“These demonstrations have been infiltrated by criminal groups,” Holguin said, adding that the government condemned the levels of violence being reported against journalists and innocent bystanders. “From day one, we’ve been open to the process of mediation. It’s the other side that has been unwilling to accept dialogue, ”he said.

Food and fuel prices have shot up across Latin America, squeezing the incomes of poorer citizens who are struggling to overcome the health and economic consequences of the pandemic. Voters have recently turfed out center-right governments in Chile, Peru and Colombia, opting instead for political outsiders from the radical left.

Olga Chuquimarca, who runs a grocery store in a Quito suburb, said she had increased prices because distribution from nearby farms and factories has stalled. “Poorer families, our customers, are on a road to malnutrition,” she said.

Flowers are one of Ecuador’s biggest exports but getting hold of the roses and astromelias cultivated on the outskirts of Quito has become almost impossible for florist Kairo Gonzalez.

“We support the protesters’ cause and what they’re calling for,” he said. But local residents, he added, many of whom are indigenous, disagreed with the violent form the strike had taken.

Trucks carrying fresh milk and fruit had been ransacked, with merchants forced to shut down their businesses, said shopkeeper Jorge Díaz. “I closed for the day yesterday, most buses don’t even arrive, so it’s been very difficult to work,” he said.

The economy is estimated by the production ministry to have lost $ 110mn in less than two weeks. State-run oil company Petroecuador reported that production had almost halved after protesters stormed oilfields. Ecuador’s bonds have slumped, with the price of dollar debt maturing in 2035 falling to 50 cents on the dollar from 64 cents at the start of the month.

Conaie’s political arm, Pachakutik, is the second-biggest party in Congress but is divided. Party leader For Pérez he said he supported the indigenous movement “because I’m an environmentalist and our concerns represent the immense majority of Ecuadoreans”.

But he had “taken a step to one side” when it came to Conaie, saying he was uncomfortable that Iza had “got closer” to the traditional left bloc of former president Rafael Correawho fled to Belgium to avoid a corruption trial.

Pérez described the demonstrations as “the eruption of a pressure cooker that’s been on the boil for a very long time”, saying the Lasso government had failed to address the problems faced by Ecuadoreans. “His economic policy is erratic, a pantomime,” Pérez said of the president.

Lasso, who a year ago became Ecuador’s first center-right president for more than two decades, lacks a strong base in Congress and has burnt bridges with potential allies. As a result, his economic reform proposals have stalled.

Even if Lasso survived, he would have “zero political capacity”, according to congressman Esteban Torres from the center-right Social Christian party that was previously in coalition with the government. “Lasso fought with everyone,” Torres said. “If the president has no support, he ought to create a coalition to serve out his term.”

Yet analysts said the president might not be the only one who had become increasingly isolated.

Iza, who argues for the imposition of “Indo-communism” in Ecuador, might have overestimated the level of public support for the protests, Nicholas Watson, of consultancy Teneo, wrote in a note to clients.

“Iza is a divisive figure within the indigenous movement,” he said, pointing out how he had stoked similar unrest in 2019. “With every video of an ambulance being blocked and as shortages become more apparent. . . public sympathy wanes, ”he added.

Additional reporting by Tommy Stubbington in London

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