Political tremors follow Ecuador quake. Protests and calls for a strike follow offical price hikes
The March 5 earthquake led to a brief respite in Ecuador's usually turbulent poltical scene, as all sides focused on the disaster. But that respite has now given way to street demonstrations and calls for a nationwide strike in the wake of government-imposed fuel price increases.
Political leaders have criticized the price rises, announced on Friday, as inflationary. Opposition congressmen accuse President Le'on Febres Cordero of breaking the political truce by adopting such unpopular measures.
Apart from trying to dampen local gasoline demand, the government needs to generate fiscal income to replace export earnings from oil. Experts believe it will take much longer than the official estimate of five months to reconstruct the trans-Andean pipeline, which was severely damaged by the quake. US helicopters from Panama have been flying engineers over the area devastated by mud avalanches to look at damage to roads and bridges, which must be repaired to speed work on the pipeline.
Venezuela is to ``loan'' Ecuador 12.5 million barrels of crude oil, which will enable the state oil company to remain in the export market and give the government some foreign income.
Oil income usually contributes almost two-thirds of Ecuador's foreign earnings and pays for state imports and for servicing the $8.4 billion debt. The government had already proposed renegotiating part of the foreign debt in January. This has become urgent now. Debt servicing for 1987 was estimated at $1.3 billion before the government suspended payments.
Ecuador has a good record with the foreign banks, and it is expected to find a sympathetic audience for rescheduling. The visit of US Vice-President George Bush, expected later this week, should also provide visible support for Febres Cordero, and reinforce external political and economic confidence in his government.
However, the President faces a turbulent few months: The 80 percent increase in the price of gasoline has set off a wave of speculation, and government attempts to control food price increases are not likely to succeed. Several Quito schools have been closed as a result of rock-throwing by students protesting an increase in bus fares and other austerity measures. Labor unions are to meet this week to decide on a national strike, and political parties are gearing up for an aggressive campaign for general elections early next year.
The initial estimate of the cost of the earthquake at $600 million is already considered low. In addition to the destruction to the oil and transportation infrastructure, much of the agricultural production in the Amazon province of Napo will be lost. Thousands of houses in the highlands have been affected.
Temporary measures, such as the airlift to the Amazon, are a drain on government funds. Large shipments of tents, blankets, plastic sheeting, and food have begun to arrive. But distribution is slow and inefficient, with very few helicopters operating.
The earthquake has, at least, distracted attention from the trial of the Air Force commandos responsible for kidnapping President Febres Cordero at the Taura military base in January. But the President's prestige was severely damaged by the incident, and his calls for national unity to meet this new emergency have found little echo among Ecuadoreans beset by economic worries.