President Lenín Moreno signed a new decree returning gas prices to traditionally low, subsidized levels a day after striking a deal to cancel a disputed austerity package and end nearly two weeks of protests that paralyzed the Ecuadorian economy and left seven dead.
While Ecuadorians welcomed the calm and praised both sides for striking a deal, analysts said Moreno appeared to have been significantly weakened halfway through his four-year term by days of protests that forced him to reverse a policy he called necessary for the country's future.
"I think the government has suffered a serious blow," said Santiago Basabe, an analyst at the Latin American Institute of Social Sciences in Quito. "Its only economic reform proposal in the last two years has been reversed, and that reduces the little credibility and room for maneuver that it had."
Moreno severely miscalculated by reducing fuel subsidies without plans in place to cushion the blow for poor Ecuadorians, Basabe said. Ecuador's well-organized indigenous nationalities have regularly launched mass protests to win government concessions since 1990 but saw their rights sharply reduced under the decade-long rule of Moreno's predecessor, Rafael Correa. Correa prohibited protests, jailed indigenous leaders and launched swift crackdowns on any demonstration.
After swarming streets and public areas for nearly two weeks without a large-scale reaction by Moreno, who has promised to respect the right to protest, indigenous groups have emerged with new strength, Basabe said.
"I think they've taken back a political space that had practically disappeared under Correa," he said. "They've shown the country that they're here and they're a force to be reckoned with." Leonidas Iza, one of the country's main indigenous leaders, told The Associated Press that he saw an indigenous president as a real possibility in the near future, even though indigenous people are less than a tenth of Ecuador's population.
"It's not a dream, it's a reality that we can take on," said Iza, a member of the Panzaleo Quichua group from the Andean sierra. "What we have proposed to the Ecuadorian people, even though we're not government officials, is that we need to construct a new economic model that's really decided on by the Ecuadorians."
As protesters left the epicenter of the protests, a park and cultural center in Quito where Iza and his followers had camped out for days, they carried out a "minga," an indigenous term for a communal labor project.
City workers shoveled burned debris into dump trucks and swept the streets clean. Young protesters took down improvised barricades of paving stones, which they piled back on the construction sites they had been taken from, or on city cargo trucks. Indigenous people who spent a week protesting in the park loaded bundles of clothes onto yellow buses to head back to their homes in the sierra. Crowds waved goodbye and chanted, "We did it!"
Under the agreement, Moreno will withdraw the International Monetary Fund-backed package known as Decree 883 that included a sharp rise in fuel costs. Indigenous leaders, in turn, called on their followers to end protests and street blockades.
The government and indigenous leaders were working together to develop a new package of measures to cut government spending, increase revenue and reduce Ecuador's unsustainable budget deficits and public debt.
"We reached our objective," Fabricio Molina, a farmer and rancher, said as he sat on a bus waiting to leave Quito. "Now we hope they sign a deal, and if they don't we'll be back on the streets again."
The decree signed Monday vows to reduce gas prices while working to find a different subsidy arrangement that doesn't benefit, "people with wealth nor gas smugglers." Ecuador, a former OPEC member, was left deeply in debt by a decade of high spending by Correa's government and the international decline in oil prices. Moreno is raising taxes, liberalizing labor laws and cutting public spending in order to get more than $4 billion in emergency financing from the IMF.
As part of the cancelled plan, Moreno's elimination of subsidies drove the most popular variety of gasoline from $1.85 to $2.39 a gallon and diesel from $1.03 to $2.30. Panic and speculation sent prices soaring, with costs of some products doubling or more.
Protests over the austerity package were led by indigenous groups but drew thousands of Ecuadorians from outside that minority. Protesters blocked roads, shuttered businesses from dairies to flower farms and halved Ecuador's oil production, forcing a temporary halt to the country's most important export.
In the country's Amazon oil fields, protests at installations, described by some government officials as attacks, halted or slowed production. Ecuador had been producing 430,000 barrels a day, but that had dropped to 176,029 barrels by Sunday, said an official at state oil producer Petroamazonas, who spoke on condition of anonymity because they were not authorized to release the information. The drop in output has led to a loss of about $14 million a day, the official said.
The public ombudsman's office said Sunday that seven people had died in the protests, 1,340 had been hurt and 1,152 arrested. Moreno has blamed the violence on drug traffickers, organized crime and followers of Correa, who has denied allegations that he is trying to topple Moreno's government.
"These days should teach us to value peace, stability and security," Moreno said Monday. "Applying the weight of the law when necessary and dialogue when possible." Moreno served Correa as vice president before he become president and the two men went through a bitter split as Moreno pushed to curb public debt amassed on Correa's watch.
The national prosecutor's office said Paola Pabón, a Correa ally and governor of the province surrounding Quito, Pichincha, had been arrested on suspicion of ties to acts of vandalism committed around the capital during the protests. It was the first arrest of a Correa ally in connection with the protests.
Foreign Minister José Valencia told The Associated Press on Sunday that the Moreno administration believed Correa, Venezuelan President Nicolas Maduro and Colombia's far-left FARC and ELN guerrillas are working to destabilize Ecuador. He offered no proof beyond the fact that a handful of Correa loyalists and some Venezuelan nationals had been detained during the protests.
"They have a political agenda and the violence and chaos that they sowed yesterday in the city, a coordinated chaos, lets us see this political agenda," Valencia said. Correa and Maduro have denied involvement in the protests.
Associated Press writer Raisa Avila contributed to this report.