Everybody in the country is aware that Conaie brought down the last two elected presidents: Abdalá Bucaram in 1997 and Jamil Mahuad in 2000. Gutiérrez precipitated the break when he demanded the resignations of Pachakutik's three cabinet ministers on 8 August, after Pachakutik deputies voted with the opposition to defeat Gutiérrez's proposals to reform the Ecuadorean civil service.
Conaie and Pachakutik are deeply unhappy at the direction of the government's economic policy, in particular, its determination to stick to the terms of the March agreement with the IMF. Ironically, it is not clear whether the government will hit the end-August deadline for meeting the Fund's terms. At least two IMF requirements, putting the electricity and conventional telephone services under foreign management, will not be met.
The worry in the government is that the IMF may not agree to an extension of this deadline, even though it gave broad approval for US$42m to be disbursed at the beginning of August. If the Fund does not divvy up, it will blow a hole in the government's budget both this year and next.
Despite this, Mauricio Pozo, the economy minister, said that the government would stick to its tough economic programme, which would lead to higher utility prices and lower public spending. The fiscal surplus target for this year is a staggering 5.25% of GDP. Whether Pozo will live up to his words is unclear. The government has already promised, in a populist gesture, that it will not increase electricity prices in 2004. Pozo has also promised that cooking gas prices, a traditional trigger for protests, will not be increased this year. The IMF is pressing for an increase by the end of the year. Currently a 15-kg canister of gas costs US$1.6: the government admits that if subsidies were ended, as the IMF wants, the price would be US$6 a canister.
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