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Protesters Parade Police Hostages and Demand IMF Leave Ecuador

Matthew Bristow and Stephan Kueffner

(Bloomberg) -- A throng of indigenous Ecuadorian protesters grabbed six policemen off the streets in central Quito on Thursday to cries of “murderers, murderers,” hours before seizing more than two dozen reporters who came to cover the event.

The policemen had their motorcycles seized before being hustled to the stage of a theater to the delight of thousands of anti-government protesters resisting an International Monetary Fund-backed austerity drive by President Lenin Moreno. They were stripped of their vests and equipment as people jeered and chanted “Moreno out.”

The protesters also detained 27 journalists, and one television reporter suffered a head wound, according to Fundamedios, a media advocacy organization. A Bloomberg News reporter was threatened, though managed to leave unhindered.

The anti-government demonstrations are being led by indigenous communities, mostly from the Andean and Amazon regions. They initially demanded a restoration of canceled fuel subsidies, then that Moreno leave office and, on Thursday, their umbrella group issued a statement saying the protests won’t stop until the IMF leaves Ecuador.

On Thursday morning, the crowd included a shaman in traditional dress with a head-high spear and an iPhone. He held an early morning ceremony to summon spirits on behalf of the people, who said officers had killed four indigenous protesters. Demonstration organizers said they would bring a corpse to the theater.

The chaotic scene points to how combustible the situation has become a week after Moreno ended the fuel subsidies, which had been in place for the better part of four decades, as part of an agreement with the IMF to narrow a budget deficit.

Moreno fled to the coastal city of Guayaquil and has vowed to return, and not to give in to demands to roll back the gasoline measures. Instead, he is calling for dialogue to reach an agreement. His foreign affairs minister said in a Wednesday interview that the government has money set aside for indigenous people, who are often poor and historically discriminated against.

The crisis marks a turning point for Moreno. The president, who was expected to lead as a Venezuelan-style leftist, has instead pushed economic and political reform and tried to restore an independent press and judiciary -- an about face from his predecessor. He championed term limits for elected officials and helped judicial reformers replace a constitutional court so discredited that several members were under suspicion of money laundering.

Moreno also remade economic policy, which led to a fall in yields on Ecuadorian bonds and a $4.2 billion agreement with the IMF to restore dollar reserves and stabilize public debt -- in part by removing the fuel subsidy.

Ecuador’s bonds issued just two weeks ago have fallen 6 cents this week to 97 cents on the dollar to yield 9.9%.

This week, protesters have occupied government buildings and oil fields as security forces struggle to enforce a state of emergency. Video on social media has shown police beating residents. The office of public ombudsman Freddy Carrion said that five people have died since the beginning of the protests.

Large parts of the Andes region are cut off by roadblocks along mountain highways. The Ecuador Red Cross said Wednesday that it would suspend services in the country after repeated attacks on its staff and ambulances.

In Quito on Thursday, the indigenous organizations met at the Agora Casa de la Cultura, part of a complex that includes the national museum and cinema.

The theater, capacity of about 2,000, was filled and there were many more people in the parks and streets outside, where tires were burning. Some were in traditional dress, with pork-pie hats and ponchos, and a few were masked and wearing helmets in preparation for clashes. Down the street, police massed behind barricades.

Tension between younger protesters and older organizers was palpable.

Carrion said on Twitter that he would that would visit the theater to ensure the captured officers were well treated.

Indigenous leader Floresmilo Simbana said in an interview at the entrance of the Agora that restoring the fuel subsidies was a mandatory first step toward ending the crisis, but the government’s current offer to aid rural communities was insufficient.

“That’s public policy. We shouldn’t even have to be discussing it,” he said.

To contact the reporters on this story: Matthew Bristow in Bogota at mbristow5@bloomberg.net;Stephan Kueffner in Quito at skueffner1@bloomberg.net

To contact the editors responsible for this story: Juan Pablo Spinetto at jspinetto@bloomberg.net, Daniel Cancel, Stephen Merelman

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