Largely fruitless negotiations between Ecuador’s government and indigenous groups are testing President Guillermo Lasso’s ability to head off renewed street protests and ensure fiscally crucial mining investments, indigenous leaders and industry experts say.
Lasso, an ex-banker, opened the 90-day dialogue to hash out implementation of a deal which ended more than two weeks of indigenous protests in June against his economic and environmental agenda.
The demonstrations left at least eight dead and severely impacted the oil industry, with demonstrators forcing immediate price cuts to gasoline and diesel, fertilizer subsidies and other measures the government says will cost $600 million.
Minimal progress at negotiations shows the government’s unwillingness to reach a deal, indigenous leaders say, while business people and analysts warn the process is increasing investor uncertainty. Price controls on more than 40 basic products and changes to mining policies are also on the table at talks, set to last until mid-October.
“We might not have another option but renewed presence in the streets,” negotiator Blanca Chancoso, ex-president of the Ecuarunari indigenous organization, told Reuters. “The strike hasn’t ended for us…we hope (negotiations) won’t just be a waste.”
The only deal signed so far is on debt forgiveness for small-scale farmers, with some indigenous leaders threatening to abandon negotiations if progress is not made more quickly. “There is no investor who is not worried,” said ex-mining vice minister Fernando Benalcazar. “No one will invest a dollar without knowing what will happen in the famous 90 days.”
Exports from Ecuador’s two large-scale gold and copper mines are quickly making the sector one of the country’s most fiscally-important. Ecuador expects mineral sales of at least $2.8 billion this year.
But indigenous groups are demanding a moratorium on extraction and for current concessions to be declared null. Lasso has agreed to suspend approvals of new projects in ancestral indigenous territory, environmentally-protected areas and archaeological zones. “Our position is no to mining, that is the starting point and from there we’ll see the government’s proposal” said Gilberto Talahua, president of an indigenous group from Bolivar province, home of the Curipamba copper project, set to be Ecuador’s third major mine.
Indigenous proposals on mining are “outside all logic” and against the law, the industry says. “Investors continue to support sustainable development in this country, but of course there must be compliance with the conditions which were offered,” said Maria Eulalia Silva, head of the Ecuador Mining Chamber.
The government says it is engaging with all protester demands, but demonstrators will not get everything they want. “This country isn’t just indigenous peoples and nations, there are 18 million Ecuadoreans,” said former vice-minister and negotiator Homero Castanier, who moved to a new position as head of the country’s development bank this week. “This dialogue exercise is not a benefit for the organizations or the government, it’s in benefit of all society.”
The energy ministry and state oil company Petroecuador are participating in talks and declined to comment. “The government is weak and President Lasso is very proud, he won’t cede even by accident to indigenous demands, and Mr. Iza also has a triumphal position where he wants all or nothing,” former energy minister Fernando Santos told Reuters, referring to indigenous leader Leonidas Iza. “I see difficult days and no will to make agreements,” Santos said, adding oil and mining could stagnate.
Lasso’s office directed questions to the ministry of government, which said it could not grant Reuters an interview until later this week.
Talks have not led to a mechanism to ensure gasoline subsidies reach the most vulnerable, an echo of failures by previous governments.
Fuel subsidies will cost about $3.8 billion this year, more than annual public budgets for health, education and security. “In these conditions it’s difficult to tilt the balance toward the negotiations,” said political analyst Alfredo Espinosa, who blames Lasso’s unpopularity and his disconnection from citizens. It’s like a hostage negotiating with their captor, which is the indigenous movement.”