After five months of governing almost without opposition, President Lucio Gutiérrez is beginning to encounter the first surfacing of social protest in the face of an economic path that is heading in the opposite direction to his electoral promises; meanwhile, the political climate is stirring, and bringing with it threatening undercurrents of instability, because of the reaction of groups of economic power, who have come under sudden pressure to pay debts held with the bankrupt banks of Ecuador, currently in the hands of the Deposit Guarantee Agency (AGD). Meanwhile, however, the head of state has scored new points on the military and police fronts by replacing their respective leaders. During the electoral campaign, Gutiérrez promised a profound transformation of the country in order to improve living conditions for the majority, in keeping with the postulates put forward on January 21, 2000, on the day of the people’s uprising that overthrew ex-President Mahuad. In this perspective, he built the alliance between his own party, Sociedad Patriótica (PSP), and the Movimiento Plurinacional Pachakutik (PK), whose backbone is the Confederation of Indigenous Nationalities of Ecuador (CONAIE). At the time, his candidacy received the support of the Movimiento Popular Democrático (MDP) and a wide range of social organizations. His persistent marches and countermarches, in this vain attempt to please all parties, from the outset, clearly left a feeling that under the present head of state, the great changes that were announced would not come about: but at least there were expectations of greater attention to social matters. This possibility was short-circuited early on by the signing of the Letter of Intent with the International Monetary Fund (IMF), which, above all, seeks to secure the payment of the foreign debt and the continued implementation of policies for structural adjustments, postponing social policies. The tone is raised Since then, there has been no end to the requests put to the President to change course: requests from the allied political forces (PK and MDP), as well as from the various social groups that contributed to his election triumph. In mid-May, the pressure increased in tone with a strike called by the National Teachers Union (UNE), who demanded the budget for education and a pay increase for teachers. The resolution of these demands was delayed by almost one month as the Minister of Finance, Mauricio Pozo, did not want to “let down” the IMF by relaxing “fiscal austerity”. This strike was followed by a strike of the workers of the state oil company (Petroecuador) and of other labor unions from the pubic sector (including health, electricity, judicial workers). Of these strikes, the action of the oil workers was of particular relevance, not only because it was aimed at denouncing and preventing the privatization policies drawn up by the Minster of Industry - also included in the agreement with the IMF - but moreover because of the consequences that this is having for public labor union movements. In what has in effect been considered a virtual “coup d’état”, the Energy Minster, retired Colonel Carlos Arboleda (PSP), began his actions by forcing the dissolution of the Administrative Council of Petroecuador, alleging that the Council is not responding to governmental plans to introduce private investment in the sector. The members of the Council had signaled that they were not opposed to foreign investment but that clear regulations must be established for such investment. Furthermore, they had proposed the removal of intermediaries in the sale of gas and fuel in order to save money. One contract with the company Petróleos de Venezuela (PDVSA) to directly import gas was expected to save the State 30% in costs. As part of his plans, the Minister was preparing to pave the way for signing contracts of Association with foreign companies, including for the five major oil fields, refineries, terminals and, pipelines, when this modality is only allowed for high risk projects. With these types of contracts the State would have a 40% participation rate, whereas at present Petroecuador remits 99.3% to the State. Given this situation, the workers declared a strike and suspended the delivery of fuel. This action, which generated disruption to various groups of the population, was taken advantage of by Minister Arboleda, in unison with the business sector and the media, to mount an intense campaign to discredit and condemn the strike action, sowing the idea that the strike was aimed at securing a group contract typified by sinecure. With public opinion in his favor, he stopped all negotiations and adopted an authoritarian response aimed at removing the union leaders, accusing them of being “terrorists”, “criminals” and similar derogatory terms, firing them, raiding their homes, ordering arrests, in violation of legal and constitutional proceedings. Even if the government has agreed not to privatize oil, nor tender the five big oil fields, and even if Petrocomercial will continue to bottle and market gas, which were the main demands of the Petroecuador strike, it seems that the attack against the oil unions will continue, not only so as to have a group of critical leaders out of the way, but also to act as an example to deter the other labor unions in the public sector. In this context, on 16 June, CONAIE held the 1st Summit of Nationalities, Peoples and Alternative Authorities, which ended with the adoption of a “Mandate” comprised of 82 points, demanding that the government rectify its economic and social policies. The document, which was delivered to President Gutiérrez the following day, calls, among its main demands, for the reorientation of economic policy and the removal of those in charge of the economic front, the non-privatization of the State’s strategic areas and resources, an audit on the payment of foreign debt, non-intervention in Plan Colombia, financing of agrarian policies planned by the Ministry of Agriculture and better resources for social areas in general. The indigenous organization has publicly declared that if their demands are not heard, there will be the possibility of an uprising. Due to pressure from its grassroots organizations, CONAIE has been distancing itself from the regime and asserting its autonomy with regards to the Pachakutik movement, of which it is a central component. For its part, PK is mounting a separate fight with its ally PSP. One of its members in the regime, Virgilio Hernández, resigned from his position as vice secretary of the Ministry of Government on June 13, revealing that there is a “dark circle” around the President of Ecuador comprised of a group of close family and leaders of the SP, led by retired Colonel Patricio Acosta, Secretary of the Administration, whom he also accused of forming a special security and surveillance group. Although subsequently, Gutiérrez provided for regular exchanges between the two political groups in order to reduce tension, their differences are far-reaching: SP is a party directed by military figures, with marked authoritarian characteristics and without clearly defined ideology, where what counts is loyalty to the leader, the President; while PK is a movement forged from social and indigenous struggles of recent times, which is calling for greater and increased democracy. Anyway, what is evident is that the line of the Colonels is getting stronger and stronger. Destabilization On June 17, the head of the Joint Command of the Armed Forces, General Oswaldo Jarrín, announced his resignation, apparently because of his refusal to follow Minster Arboleda’s request to militarize the oil fields as there was no legal mandate, and immediately afterwards Gutiérrez removed the commanders of the Armed Forces and of the Police. All of which seems to indicate that this method will continue until it is the turn of officials who are unconditional supporters of the Colonel President. At the same time, it has reached public knowledge that the head of state has requested that the Armed Forces “clean the slate” of those soldiers who participated with him in the actions of January 21, 2000, a matter which General Jarrín was also opposed to. This issue has come to occupy an important space in public debate, where opinion is divided between those who consider that this was an act of injustice and those who fear a politicization of the armed forces and the subsequent destabilization. Actually “destabilization” is a word in vogue. The presidency itself has taken on the task of denouncing the existence of destabilizing forces against it, backed up by important economic sectors which have suddenly been pressured to pay debts which were thought to be “written off”, following action undertaken by the Deposit Guarantee Agency (AGD) after the appointment of its new manager, Wilma Salgado, in March. Although the government has not backed its denouncements with evidence, there can be no doubt that the presence of Salgado in AGD has set a bulldozer in motion. The AGD was set up during the bank crisis, supposedly, as its name suggests, in order to protect depositors, however its management was entrusted to individuals linked to the same bankrupt banks. When the current president decided to hand over the management of the entity to Pachakutik, certain analysts saw in this decision a move to get rid of its inconvenient partner, by putting it in charge of an institution that was practically dying. PK proposed Salgado, a meritorious academic who, in a short space of time, untangling a complex and secretive mechanism of cover ups, went onto the offensive adopting preventative measures to force clients who were in arrears to pay their debts to the bankrupt banks. Such was the impact, that citizen support was rallied resulting in the executive assuming a similar stance. It is in this state of affairs that the parties bound to these financial groups are beginning to react. The right-wing Partido Social Cristiano of the ex-president León Febres Cordero (which until recently sustained that no opposition was needed, since the government would fall under the weight of its own mistakes) burst onto the scene, as a result of which the heads of the presidents of the Legislative and Judicial powers might roll any day now, due to the weight of the PSC being the main party in a fragmented parliament with precarious alliances. For the present, it seems that the priority is the dismissal of the President of the Supreme Court of Justice, Armando Bermeo, who holds key legal cases, including the trial of the former owners of Filanbanco. On June 18, Bermeo announced that he is under pressure from a powerful political leader; he did not mention any names but all evidence points towards Febres Cordero. If the logic that, until now, has prevailed in the government is maintained - surrender to the elite, with the aim of neutralizing them, even though this implies having your hands tied - then there will be no surprises if shortly, as predicted by various analysts, a new parliamentary majority emerges, with right-wing parties and the SP, under the common element of subordination to the guidelines to the IMF and to the policies of Washington. (Translation by ALAI)