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″Island of Tranquility” Beset By Political, Economic Problems

November 8, 1995

QUITO, Ecuador (AP) _ Ecuadoreans once liked to describe their small oil-exporting nation, which is wedged between Peru and Colombia, as an ``an island of tranquility″ in a sea of regional turbulence.

But a costly border war and persisting political and economic turmoil is making them increasingly pessimistic about their country’s future. With less than a year to go in his term, President Sixto Duran-Ballen is facing mounting problems, worsened by daily power rationing, and fears of a coup.

Compounding the sitution is that the government of this Andean nation of 10 million people has been confronting street demonstrations led by labor unions and leftist student groups.

Industrialists and business people _ who normally would be expected to support the pro-free market administration _ have added their voices to the discontent over the government’s failure to resolve the on-going energy crisis that threatens their livelihoods.

``If necessary, we Ecuadoreans must take to the streets in protest,″ said Luis Trujillo, president of the Chamber of Commerce in Guayaquil, Ecuador’s second-most important city.

``There’s desperation. Many small industries are already closing or letting people go because of the lack of electricity,″ added exporter Juan Jose Pons.

Business leader Joyce de Ginatta announced she and other business people would begin a hunger strike if Congress does not approve a new law on electrification by Nov. 20.

Ecuadoreans have been enduring blackouts for up to nine hours a day since August due to rationing caused by a 50 percent reduction in the capacity of the country’s main hydroelectric generating station in Paute, which provides two-thirds of Ecuador’s electricity.

The station is operating below normal because of a drought that is not expected to ease before the end of the year. Deforestation in the watershed of the Paute River has reduced rainfall and contributed to keeping the dam under normal levels for the last several years.

The rationing comes on top of a series of problems that have battered the Duran-Ballen government in recent months, among them the flight of former Vice President Alberto Dahik, who escaped to Costa Rica in October when he was ordered arrested on corruption charges.

Duran-Ballen, whose four-year term ends in August 1996, is engaged in a protracted battle with the opposition-controlled Congress. Both sides accuse the other of being responsible for the country’s ills.

Cesar Verduga, former interior ministry and now a newspaper columnist, said there exists ``a deep institutional crisis whose effects are not only felt socially and morally, but also economically.″

The government was forced to lower its economic goals for the year as a result of Ecuador’s border war with Peru earlier this year. It lowered its expected economic growth for 1995 from 4 percent to 3.1 percent, and adjusted its projected inflation from 15 percent to 21 percent.

Dahik’s replacement, new Vice President Eduardo Pena Trivino, said the affects of the war with Peru, the energy crisis and the political instability on the country’s economy were ``disastrous.″

Angry over the high cost of living, students in recent weeks have clashed with police in street demonstrations that have left one student dead. Their leaders promise to escalate the demonstrations. Labor unions are expected to do the same.

Adding to this political and social instability, rumors of a military coup have repeatedly surfaced over the last six months, and were confirmed recently by the head of the air force, Lt. Gen. Fernando Martinez.

``Some voices are calling for intervention by the armed forces,″ Martinez said. But these calls were ignored, he said, because the armed forces’ mission ``is to back democratic institutions.″

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