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Ecuador's Moreno Scraps Fuel Subsidy Cuts in Big Win for Indigenous Groups

Reuters

   QUITO - Ecuadorean President Lenin Moreno on Monday officially scrapped
   his own law to cut expensive fuel subsidies after days of violent
   protests against the IMF-backed measure, returning fuel prices to prior
   levels until a new measure can be found.

   The signing of the decree is a blow to Moreno, and leaves big questions
   about the oil-producing nation's fiscal situation.

   But it represents a win for the country's indigenous communities, who
   led the protests, bringing chaos to the capital and crippling the oil
   sector.

   The clashes marked the latest in a series of political convulsions
   sparked by IMF-backed reform plans in Latin America, where increased
   polarization between the right and left is causing widespread friction
   amid efforts to overhaul hidebound economies.

   Moreno's law eliminated four-decade-old fuel subsidies and was
   estimated to have freed up nearly $1.5 billion per year in the
   government budget, helping to shrink the fiscal deficit as required
   under a deal Moreno signed with the International Monetary Fund.

   But the measure was hugely unpopular and sparked days of protests led
   by indigenous groups that turned increasingly violent despite a
   military-enforced curfew.

   Moreno gave in to the chief demand of demonstrators late on Sunday,
   tweeting on Monday that: "We have opted for peace."

   Then, later on Monday, he signed the decree officially reverting his
   previous measure. Moreno, who took office in 2017 after campaigning as
   the leftist successor to former President Rafael Correa, said fuel
   prices would revert to their earlier levels at midnight.

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