While thousands of Ecuadoreans participated in a national strike yesterday, marching through city streets and blocking many country roads, a group of indigenous political leaders were in the presidential palace in the capital Quito, signing an agreement with President Gustavo Noboa.
Indians and unions had planned that the strike would be an intensification of several weeks of protests against fiscal measures introduced by the government in December at the behest of the International Monetary Fund (IMF). But yesterday's accord, which contains 23 articles seeking to improve social and economic conditions for Ecuador's Indians, seems to have calmed the country's recent social tension and converted the day's protests into victory marches. The most notable features of the agreement are that the government will not increase the price of fuel for at least one year and that it will reduce the price of cooking gas cylinders from $2.00 to $1.60. Increases in fuel and gas prices were the main measures requested by the IMF.
The relatively swift resolution to a social problem that looked likely to drag on indefinitely seems to have been brought about by the outrage following an armed confrontation between indigenous protesters and a group of soldiers in the Amazon city of Tena on Monday. The incident left two Indians dead and several wounded.
Details of the incident have been vague and sporadic, due to the remoteness of Tena, which lies some 100 miles south-east of Quito. But to the thousands of Indians and mestizos who have joined the protests around the country, it was the latest in a catalogue of brutal acts by the government in its attempts to deal with the crisis.
The administration of Mr Noboa made no secret of its intention to come down hard on protests when they began and it decreed a state of emergency on Friday. This broadened the powers of the police and military to deal with the unrest.
Mr Noboa's sudden decision to appease the Indians comes only days after his government declared that it could not negotiate their demands. By granting concessions it would be compromising its economic plan, the government argued. Previously the government had defended the fiscal measures as an integral part of both its medium term strategy for the country's dollarised economy and its credit agreement with the IMF.
The continuation of Ecuador's $300 million deal with the IMF depends to a great extent on the Noboa administration's ability to implement reforms such as those that have been facing such angry opposition.
An IMF representative involved in the negotiations said that although the reduction in the price of gas will cost the state some $15 to $20 million during 2001 - as well as sending out a bad signal to the international community - the economic damage caused by the agreement is not insuperable.
Mr Noboa was brought into power in January 2000 following an indigenous uprising supported by some rebel army officers. The uprising ousted then-president Jamil Mahuad. Most observers believe that Mr Noboa's position has not been seriously threatened by the protests. The armed forces, so influential in the power balance of Andean countries, are staunchly behind him. However, the crisis has undoubtedly weakened his position.
Mr Luis Villacis, a leader of the country's largest labour organisation the Patriotic Front, conceded that the government is unlikely to fall in the immediate future. But he said social discontent is growing.
"If the government repeats these kind of measures in the future, the same thing could happen to it as happened to the government of Jamil Mahuad," he said.
