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Conditionality

News

Ecuadoreans protest against adjustment reforms

11 August 2000

In June the Patriotic Front, a coalition of unions and grass-roots organizations, held a national strike to protest neoliberal economic policies promoted by the World Bank and International Monetary Fund (IMF).

Police attacked protesters with tear gas in Quito and Guayaquil. Groups of indigenous people blocked some highways in the southern part of Chimborazo province. The strikers’ demands included:

  • no dollarization;
  • a price freeze;
  • elimination of all structural adjustment reforms, including an end to plans for privatization of state-owned companies in strategic sectors; and
  • no payment of the external debt.

Following the two-day strike, a delegation of Ecuadorean human rights, women’s and trade union organisations met World Bank and IMF officials in Washington. They demanded that the World Bank Board postpone approval of the Country Assistance Strategy (CAS) and a new structural adjustment loan (SAL) because:

  • there was no effective participation in the CAS process;
  • the CAS is conditioned on the fulfilment of IMF policies, such as the removal of subsidies, that have led to protests in Ecuador;
  • the World Bank programme requires social sector spending to be frozen although spending levels are already abysmally low and were cut by 10 per cent in 1999; and
  • the new World Bank lending will add further to Ecuador’s crippling debt burden which is projected to consume 53.9 per cent of government expenditures in 2000.

The civil-society delegation called for:

  • the contents of the CAS and the conditionalities in the SAL to be made public;
  • the first tranche of the adjustment loan to be dedicated to social protection; and
  • an independent social assessment, involving direct consultations with the affected communities;

The bank did not agree to these demands. However, David de Ferranti, Bank vice-president for Latin America and the Caribbean, indicated that the Bank would make greater efforts to ensure adequate citizen participation in the design and implementation of the next CAS.