By Neville Spencer
Gustavo Noboa was installed as president of Ecuador on January 22. He has promised to continue the economic policies which led to the ousting of President Jamil Mahuad the previous day in a coup which took place on the back of a popular uprising.
Ecuador's economy has been one of the most severely hit by the recession that has affected Latin America for the last two years, resulting in numerous bank collapses, an inflation rate of 60.7%, a shrinkage of gross domestic product by 7.3% and an increase in unemployment from 12% to 17%.
During the first week of January, Ecuador's currency, the sucre, severely lost value against the US dollar. Mahuad announced that the sucre would be replaced by the US dollar.
This would have had the effect of placing control over Ecuadoran fiscal policy in the hands of the US Treasury. The plan increased the anger of the indigenous and popular movements, which were already in the middle of protests and strikes.
The coup briefly placed power in the hands of an unusual alliance of a section of the military and Ecuador's indigenous people, who make up about 40% of the population and are primarily organised through the Confederation of Indigenous Nationalities of Ecuador.
The triumvirate which ruled Ecuador from the evening of January 21 to the morning of January 22 included military chief Carlos Mendoza, indigenous leader Antonio Vargas and former Supreme Court judge Carlos Solorzano. Under pressure from the US, Mendoza dissolved the triumvirate and handed power to Noboa, who was Ecuador's vice-president.
Since taking power, Noboa has arrested hundreds of soldiers and several officers who backed the coup. The discontent in the lower ranks of the military is unlikely to disappear rapidly. The court martial of many of the ordinary soldiers who supported the coup may increase this discontent and make the military an unreliable instrument for the government to use against popular struggles.
Noboa has promised to continue the dollarisation plan, but will peg the value of the sucre to the dollar without abolishing Ecuador's currency. Defending the value of the sucre is likely to deplete foreign reserves, causing a dramatic currency devaluation when it becomes clear that the reserves are no longer sufficient to maintain the sucre's parity with the dollar.
Among the popular movements, there has been some demoralisation following the betrayal of the uprising by the military. However, popular protests have played a significant hand in toppling not only Mahuad but also previous president Abdala Bucaram, who was ousted by Ecuador's Congress following weeks of protests in 1997. This has produced an awareness of the potency of the popular movements. As Ecuadoran political analyst Simon Pachano noted in the Washington Post: "They've shown that they can throw a president out of office if they want to, and they can do it again".
The organisations involved in the uprising have clearly recognised that Noboa represents a continuation of the previous regime, against which they were protesting. Indian leader Vargas told the Brazilian newspaper Correio Braziliense Vargas, "We do not support Noboa; in fact we are going to continue fighting to implement a junta of national salvation, which cannot be attained for now, but it will be, because for us the need for it is still valid".
Vargas has said that civil war might result from the installation of Noboa, but also suggested that the new president has three to six months to remedy Ecuador's situation.