Magazine article Newsweek International

Gridlock on the Streets

Magazine article Newsweek International

Gridlock on the Streets

Article excerpt

ECUADOR

Higher gas prices won't save the tanking economy

Just six months ago, proud ecuadorans draped their capital city of Quito with the national colors of blue, yellow and red. Their newly elected president, Jamil Mahuad, had just made peace with Peru after 50 years of border disputes. But last week the outlook in the capital was considerably darker, as taxi and bus drivers unfurled black flags bearing the words fuera [get out], jamil! Gridlock paralyzed major intersections as disgruntled drivers burned tires and effigies of the president. The source of their fury: a nearly 200 percent hike in gas prices that Mahuad implemented March 11 as part of an austerity package designed to curtail the country's staggering debt. Labor activists and students joined the demonstrations, throwing rocks and taunting soldiers brought in to keep the peace. "This is such a hard blow," says taxi driver Gonzalo Paredes over the increase from about $1 to $3 per gallon of high-test. "If the gas prices don't go down, we can't work, and the bank will take my car. Then what do we do?"

Last Thursday, Mahuad sought to defuse the crisis by scaling back gas prices to $2 per gallon and lifting the state of emergency he had imposed. In return, his political opponents vowed to approve a plan to raise money through higher taxes. That eased tension on the streets. But it also highlighted the gravity of Ecuador's economic ills. The Andean nation, with a $5 billion annual budget, has a $1. …

Search by... Author
Show... All Results Primary Sources Peer-reviewed

Oops!

An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.