Development: On 28 August the Frente Unitario de Trabajadores (FUT), Ecuador’s main umbrella workers’ union, called for national demonstrations for today (29 August) against the recent economic policies implemented by the government led by President Lenín Moreno
Significance: This is the first time that the FUT has called for a demonstration against the Moreno government since it assumed office last year. It shows that the recently announced economic measures with which the Moreno administration hopes to reduce the fiscal deficit, such as the increase of government-controlled petrol fuel prices and the layoff of public sector workers, are proving unpopular. A confrontation with the FUT over these measures could be damaging for the Moreno administration.
- The Moreno administration has said that the belt-tightening economic measures, which were announced last week and are designed to save some US$1bn a year, are necessary to tackle the widening fiscal deficit it inherited from the previous administration led by Rafael Correa (2007-2017). The government also argues that the measures reflect the less favourable international economic scenario currently faced by Ecuador, marked by low international oil prices.
- However, the initiatives have been criticised by some local civil-society groups, which complain that the measures would have a negative effect on the local population, which is going to be made to pay for the government’s mismanagement. The FUT has said that the increase in petrol fuel prices in particular would weigh heavily on households, while the layoffs resulting from the suppression of no less than seven ministries and 20 public institutions would also be detrimental to workers, as it is calculated that some 1,500 people would lose their jobs.
- In calling for the demonstrations yesterday, FUT president José Villavicencio was also critical of the measures that aim to reduce the tax burden on the private sector to stimulate domestic economic activity. “On the one hand they condone debts [and reduced] taxes to big economic groups and on the other they announce measures that will affect the people”, Villavicencio said. He said that that the measures were clearly in response to “pressure from powerful groups and the International Monetary Fund” on the Moreno administration to reduce the deficit, and he warned against plans to increase natural gas prices.
Looking Ahead: Villavicencio said that there will be demonstrations today not just in Quito but in cities across the country calling for the measures to be reviewed. But he announced that these will only be in “preparation for a great mobilisation” that the FUT is planning to stage on 20 September if its demands are not heeded.
