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Ecuador President Pressed to Resign as Protests Curb Oil Output

·3 min read

(Bloomberg) -- Ecuador President Guillermo Lasso is fending off calls to resign amid street protests by a left-wing indigenous group that’s paralyzed parts of the country and imperiled oil production, one of its key industries.

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The conservative former banker, a darling of investors since he came to power a year ago, has seen his popularity falter locally amid growing crime and concern about his plan to overhaul the economy with support by the International Monetary Fund. Lasso has decried the protests -- now in their second week -- as a coup attempt meant to dislodge the government.

“They want to overthrow the president,” Lasso said Monday.

The protesters, assembled under the umbrella indigenous group known as CONAIE, are seeking increased fuel subsidies, a moratorium on new oil and mining projects and curbs on plans to privatize state assets. Their protests have shut down major highways and caused disruptions at the airport in Quito, and in some cases have been accompanied by violence, including the torching of police cars and looting of neighborhood stores.

The demonstrations -- and calls from the opposition for Lasso to resign -- add to the rising political turmoil in Latin America, which was among the region’s hardest hit by the Covid-19 pandemic and the economic fallout. Far-left governments were recently elected in Chile and Peru, and just this week leftist Gustavo Petro won Colombia’s presidential ballot on a platform to tax the rich.

Lasso has said the protesters are bent on running him out of office and are refusing to engage in talks to reach a compromise. He moved to increase a monthly payment to poor families 10% to $55, promised to subsidize some fertilizer costs for small farms and said he’d double the education budget for schools teaching in indigenous languages, among other measures meant to quell the demonstrations.

‘Reestablish Peace’

CONAIE President Leonidas Iza said the organization would send a missive to the government on Wednesday responding to its latest offer. He called on protesters to refrain from vandalism or violence.

Defense Minister Luis Lara said the protests are supported by drug traffickers, without offering any evidence. He pledged to “take action to recover normality and reestablish peace.”

Ecuador’s foreign debt has tumbled in the wake of the protests as concerns mount about government stability and investors question whether they’ll ultimately get paid back. Benchmark notes due in 2035 fell 1 cent to 52.6 cents on the dollar Tuesday, leaving them down more than 11 cents this month for one of the world’s worst routs. The nation’s last default, two years ago, was also proceeded by a period of political chaos.

State-owned oil company Petroecuador has warned that it could be forced to suspend exports on concern output will likely be cut by more than half by the end of the month if the protests continue unabated. Quito’s airport early Tuesday reported numerous cancellations and delays. One person has been killed in an incident north of Quito.

Lasso is also facing a hostile, opposition-led National Assembly. After he blocked it from repealing an emergency decree he issued over the weekend to strengthen the police and military, the largest opposition bloc, composed of supporters of self-exiled socialist former President Rafael Correa, late Monday issued a statement calling for early elections. One of its lawmakers, Juan Cristobal Lloret, said the grave unrest could justify Lasso’s impeachment.

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