Ecuador: Down with the IMF and the Moreno Austerity Plan!

Prepare the general strike to remove the government and set a way forward for the population of workers, peasants, and indigenous peoples! In the face of the political and social crisis in Ecuador, only the workers, the indigenous people, and the poor can provide a progressive solution.

Photo by Indymedia Ecuador

The following statement was written by the groups that make up the Trotskyist Fraction as mobilizations were occurring in Ecuador. On Sunday night, President Moreno announced that he would rescind decree 883, which had stopped fuel subsidies and leaders of the Confederation of Indigenous Nationalities of Ecuador (CONAIE) called off the protests. However, Moreno and indigenous leaders will be on a special committee to negotiate a new plan, which will include other austerity measures. The IMF is continuing to demand austerity and for Ecuador to pay their debt.  In this sense, this declaration maintains its relevance.

Statement of the Trotskyist Fraction – Fourth International

The International Monetary Fund (IMF) adjustment plan put in place by President Lenín Moreno of Ecuador has provoked a massive mobilization of the exploited and oppressed, who reject the price increases of fuel and essential goods. The declaration of a state of emergency and the transfer of the governmental seat of power from Quito, in the Andes, to coastal Guayaquil, the country’s second-largest city, has only aggravated popular discontent, giving rise to the mobilizations, blockades of roads, and the organization of a march on the capital by indigenous peoples.

The brutal repression and militarization of cities and major roads has already claimed the lives of several protesters, and hundreds have been injured and arrested. Beginning on October 8, a curfew was declared between 8 pm and 5 am.

In the past few days, the workers and the people have raised the torch of the powerful mobilizations that shook the country in the late 1990s and early 2000s. During those mobilizations, several presidents that tried to establish austerity measures similar to those Moreno is attempting were toppled.

With the general strike of October 9, demonstrations against the paquetazo (“package”) of measures comprising Decree 883 have not diminished, despite the attempts at dialogue by the trade union leaderships and social movement officialdoms. Recall that in the past, the class-collaborationist strategy of the leaderships of the trade unions and indigenous organizations led to pro-employer governments, like that of Jamil Mahuad from 1998 to 2000, or governments led by former soldiers, such as with Lucio Gutiérrez (2003–2005), that imposed the dollarization of the economy that today suffocates the country.

The struggle of the workers and people of Ecuador shows the way forward in Latin America against the attacks of the region’s governments and IMF’s adjustment plans, such as in Brazil, Argentina, Chile, and Peru. These plans must be confronted in the streets.

Moreno and the IMF Adjustment Plan

Among the six measures in Decree 883 is the abolition of the state fuel subsidy, which has caused a dramatic increase in the price of gasoline and diesel and, indirectly, increases in the prices of staple goods. The price of gasoline rose from $1.85/gallon to $2.20. The paquetazo demanded by the IMF also significantly reduces tariffs on the import of capital goods, manufactured goods, and agricultural raw materials. Similarly, it establishes that the renewal of fixed-term contracts must be carried out with a 20% cut in pay—a brutal attack on the most precarious and impoverished workers. Finally, the decree establishes fixed-rate mortgages and a $15 subsidy for 300,000 families living in poverty. Obviously, a subsidy like that cannot mask the extent of the attacks on the workers and the people. The IMF also wants a tax reform in which public-sector workers would lose the equivalent of a one day’s pay every month and see their vacation days reduced from 30 to 15 days annually.

The measures Moreno has implemented are aimed at paving the way for a favorable next IMF report so the government will gain access to a $250 million dollarpayment, part of a $4.2 billion global loan Ecuador needs to cover its fiscal deficit that has resulted from a decline in exports and an economic downtown. At the same time, the government has forgiven the debts of the big companies that have been involved in looting the country. In short, this is a plan designed for the capitalists to continue to profit and to put the full weight of the crisis on the backs of the working class and Ecuador’s popular and indigenous sectors.

How Rafael Correa Paved the Way for Moreno and Neoliberalism

During the 10 years of Rafael Correa’s government, a period known as the “Citizen Revolution,” Ecuador benefited from high prices for raw materials and oil, which eased the public debt. This allowed Correa’s government, like other so-called “post-neoliberal” governments in the region, to stabilize on the basis of some redistribution of national income and by some constitutional reforms. At the same time, Correa remained the best guarantor for the big capitalists, without altering the dollarized model of the economy and the loss of monetary sovereignty that implies.

In its early days, the Correa government relied on the support of popular and leftist organizations such as Pachakutik, the Confederation of Indigenous Nationalities of Ecuador (CONAIE), and the Maoist-oriented Popular Democratic Movement, now called Popular Unity. They all claimed to see in Correa the expression of the popular struggles that had shaken the country continually beginning in the late 1990s. If at the beginning the stability of the Correa government was based on its cooptation of leaders and popular organizations, as its authority strengthened Correa hardened relations with those initial allies—even going on to repress social protests and prosecute his political opponents. This position was buttressed by a policy of relative distribution of oil income through subsidies, supplemented by laws such as the Capital Gains Act, which imposed limits on sectors linked to real estate speculation through banks or financial mechanisms. These measures were coupled with significant public investment, which allowed Correa to reduce the tensions inherited from the 1990s. The last years of his government were characterized by strong repression, the imprisonment of student and teacher leaders, and anti-union policies such as the attacks on teachers’ pensions.

In the end, the so-called “Citizen Revolution” was reduced to a few institutional reforms implemented in the 2008 Constitution but that were unable—as can be seen in light of the current situation—to recover the country’s monetary sovereignty, commence a process of industrialization that would make Ecuador less vulnerable to the shocks of the global economy, and begin to break the stranglehold of imperialism.

Lenín Moreno came to the presidency as the successor of Correa, who had presented him as the only candidate capable of confronting Ecuador’s “neoliberal right” of bankers and big businessmen, such as Jaime Nebot, the former mayor of Guayaquil, and Guillermo Lasso, the banker who competed with Moreno in the second round of the 2017 elections. But Moreno has implemented measures inspired by neoliberalism, such as eliminating the Capital Gains Act and using the judicial apparatus Correa had built against him. In fact, Moreno’s former mentor was forced into exile as charges of embezzlement of public funds and corruption swirled around him. Jorge Glas, Moreno’s first vice president, was arrested and jailed a few months after taking office as the anti-Correa campaign began. In terms of foreign policy, Moreno has aligned himself with Donald Trump and U.S. imperialism, as demonstrated by his unwavering support for the coup offensive against Venezuela and extradition of journalist Julian Assange, who was finally handed over to the British.

Faced with the current situation, Correa has—from his exile in Belgium—has called for the resignation of Moreno and early elections as the only way out of the crisis. It would be a way to channel the protests onto electoral ground confined by the political system. Correa does not just want to capitalize on discontent, but also to pacify the mass movement and save the entire regime from being taken down altogether.

Against the Trap of Dialogue with Moreno, the Church, and the UN

In a recent message to the nation, Moreno announced that he would not retreat on tax hikes, while continuing to militarize the country. At the same time, he called for dialogue and negotiation.

For now, Moreno’s paquetazo is counting on support from the economic and financial establishment, beginning with Guillermo Lasso (former Economy Minister under Mahuad), Jaime Nebot, the mayor of Guayaquil from 2000 to 2019, and Abdalá Bucaram, Ecuador’s president in 1996–1997, as well as the support of major media and law enforcement. It is this sort of coalition that gives Moreno the strength not to back down from Decree 883 and to negotiate on the basis of other concessions.

The current mayor of Guayaquil, along with Nebot and several businessmen and bankers from the coastal region, have called for the organization of volunteer corps to prevent indigenous protestors from entering the city—exploiting for this purpose regionalist and racist prejudices against the country’s Andean areas.

In addition, the Ecuadorian Episcopal Conference is seeking to ease social pressures as it campaigns for a “sincere and respectful” dialogue so the authorities can “continue to work for social justice. In this context, the Church has offered itself as a mediator between the government and the social organizations engaged in the struggle.

In the initial and most spontaneous demonstrations that took place in the country’s interior, and during which several town halls and police headquarters were stormed, the slogan heard most often was “Moreno leave!” However, the leadership of the CONAIE and of the United Workers Front (FUT), along with student organizations led by the Maoists, refused to take up this demand, claiming it would play into the hands of Correa. Following the brutal repression of Wednesday, October 9, the CONAIE issued a statement on October 10 calling for the repeal of the Decree 883 measure suspending fuel subsidies, along with the resignations of the Minister of the Government [the equivalent of the Prime Minister], the Minister of Defense, the release of detainees, and the end of the repression as conditions for negotiations. Its goal is not Moreno’s departure. Some leaders even began to dust off the old policy of an alliance with the police and the military so they can act as referees in the political situation, requesting that these forces withdraw their support for Moreno.

However, to expel the IMF, it is necessary to defeat Moreno and impose an independent solution for the working class, indigenous peoples, and the poor. Any attempt to divert the mass mobilization of recent days to the negotiating table, thus saving Moreno’s government or paving the way for Correa’s return, must be opposed; instead, it is necessary to impose on the ruins of the regime a Constituent Assembly, through popular mobilization, that addresses all the major problems the country faces.

The Need to Fight for an Independent, Revolutionary Way Out of the Current Crisis

While all of that unfolds at the top levels of the government and the leaderships of the social movements, the energy of the mass movement has not abated since Decree 883 was issued. It is a display of creativity and willingness to fight without precedent in the last couple of decades. The greatest danger at the moment is that all the revolutionary energy and potential expressed by the workers, students, and indigenous peoples in the face of violence will be used as part of some negotiation that continues the economic attack on the workers and people while hiding it behind some symbolic concessions—and that ends up diluting and dissipating the enormous will to fight being expressed in the streets.

The current mass movement in Ecuador is showing that it has the strength to push back the adjustment plan, just as it has done in the past with various austerity and neoliberal governments. That is why is has generated so much fear on the part of governments in the region that have expressed as a bloc their support for Lenín Moreno, just as the various imperialist governments have—such as Donald Trump in the United States and Pedro Sánchez in Spain, who have expressed their absolute support for Moreno and his adjustment program.

They know that the possible overthrow of Moreno through mass action could encourage the class struggle in neighboring countries and deepen the crisis of other governments, such as Vizcarra in Peru or Macri in Argentina, or weaken them a bit more, such as in Brazil or Chile. The right in Venezuela is echoing the claims of Moreno and Bolsonaro that it is all the product of a Maduro and Correa conspiracy. Maduro, for his part, has the gall to declare his “solidarity” with the struggle, condemning the repression while conducting his own policies of austerity and repression in Venezuela.

To put a real end to Lenín Moreno and the IMF austerity, it is necessary that the mass movement develop a genuinely independent policy in the context of the current political crisis. It must reject the policy of the leaders of the trade unions and the indigenous movement to give Moreno a reprieve at the expense of the current mass movement that repudiates the government as a whole and shows a willingness to fight. It is urgent to promote the development of united front organizations for the struggle, beginning with the unions, the indigenous-peasant communities, and other workers’ and popular organizations. On the basis of direct democracy, they should determine the forms and mechanisms for confronting the brutal repression by the police and military. They could promote the development of self-defense committees that are already a part of Ecuador’s history of mass movements and that were put in place during several uprisings that have shaken the country in recent years.

It is also essential that these united-front organizations establish the procedures to be followed and the orientation to be adopted, in opposition to the attempts of the bureaucratic leaderships to lead the mass movement to negotiations in which it would have nothing to gain.

It is in this sense that we must champion a program that aims to expel the IMF from Ecuador and cancel the payment of the foreign debt. It is necessary to move against the economic power of the financial oligarchy whose interests Moreno’s authoritarian policy serves, and instead to impose the nationalization without compensation of the entire banking and financial sector into one central bank controlled by the workers. This must be an immediate objective to ensure that the capitalists, bankers, bosses, and landowners that have reaped tremendous profits under both the current government and that of Correa pay for the current crisis. This means ending the dollarization of the economy and restoring monetary sovereignty, establishing a living wage with a sliding scale, ending unemployment and job insecurity once and for all by reforming the labor market and sharing working hours among all employed and unemployed workers.

In recent decades, large agribusiness firms have flourished, without ever resolving the question of the land and territorial demands of indigenous communities and peoples. It is thus urgent to fight for a comprehensive agrarian reform led by those same communities themselves. This program must raise the need to nationalize the large, highly polluting mines owned by transnational corporations without compensation and under collective administration by the workers, together with indigenous and peasant communities.

The struggle for this program would make it possible to forge a powerful alliance among workers, peasants, natives, indigenous peoples, and the poor against all the ruling class proposes.

To avoid the pitfalls of dialogue or early elections, as proposed by Correaism, it is necessary to fight for a free and sovereign Constituent Assembly, which should be imposed by a general strike until Moreno resigns and the entire current political regime falls. This assembly would be the antithesis of what Correa set up in the past, because it would take up what the workers and indigenous peoples want. The struggle for such an assembly, with legislative and executive functions and supported and defended by the organized mobilization of the workers and the masses, could allow the movement to advance the idea that only a government of the workers, peasants, and indigenous peoples can offer a definitive solution to combat all the evils that afflict the Ecuadorian people by expelling the IMF and paving the way for a full and effective resolution of the problems of work, health, education, land, and territory in the service of the great masses of the people. It could put an end to the country’s submission to imperialism, with a perspective of the socialist unity of Latin America.

We call for the broadest mobilization in Latin America and throughout the world in solidarity with the struggle of the Ecuadorian people.

Down with the IMF austerity program and Lenín Moreno!

Down with the state of emergency and the curfew!

Down with the repression by the police and the army!

 Immediate freedom for all detained protestors!

No trust in Correa, the former sponsor of Lenín Moreno and his family!

To expel the IMF, we must overthrow Moreno!

Prepare the general strike until the government resigns! Impose a worker-peasant-indigenous peoples’ solution!

For a free and sovereign Constituent Assembly!

For a workers’ and peasant-indigenous government!

Groups that are part of the Trotskyist Fraction – Fourth International

Argentina: Partido de los Trabajadores Socialistas (PTS)
Brazil: Movimento Revolucionário de Trabalhadores (MRT)
Chile: Partido de Trabajadores Revolucionario (PTR)
México: Movimiento de Trabajadores Socialistas (MTS)
Bolivia: Liga Obrera Revolucionaria (LOR-CI)
Spanish State: Corriente Revolucionaria de Trabajadoras y Trabajadores (CRT)
France: Courant Communiste Révolutionnaire (CCR) que forman parte del NPA (Nouveau Parti Anticapitaliste)
Germany: Revolutionären Internationalistischen Organisation (RIO)
United States: Editorial Board of Left Voice
Venezuela: Liga de Trabajadores por el Socialismo (LTS)
Uruguay: Corriente de Trabajadores Socialistas (CTS)

Other Signatories:

Perú: Corriente Socialista de las y los Trabajadores (CST)
Costa Rica: Organización Socialista
Italy: Frazione Internazionalista Rivoluzionaria (FIR)

Translation by Scott Cooper

About author

Trotskyist Fraction – Fourth International

Trotskyist Fraction – Fourth International

The Fracción Trotskista—Cuarta Internacional (FT-CI) / Trotskyist Fraction—Fourth International (TF-FI) is an international tendency of revolutionary organizations.