A reported coup in late January interrupted progress on privatising Ecuador’s electricity supply industry, potential new hydro projects, along with some other programmes in the country (see IWP&DC, January 2000, p17).

Sources in Ecuador identify the roots of dissatisfaction that led to the coup as twofold: promises made by then-president Mahuad to the indigenous peoples that were not kept, and the continued downturn in the economy. Furthermore, military salaries had fallen sharply as a result of the devaluation of the Ecuadorian Sucre. Matters came to a head when a group of rebellious army officers and indians occupied the Congress, and past president Rodrigo Borja accused president Mahuad of corruption in a broadcast interview.

Although the Congress was attacked by several thousand people and there were other disruptions, the overall effect of the action in most of Ecuador was minimal, according to sources within the country: shops, businesses and public services operated as normal.

Following the action, the Supreme Command of the Ecuadorian military services was said to have shown documents to Vice President Gustavo Noboa which convinced him that Mahuad had planned a ‘self-coup’ which would give him near-dictatorial power. Evidence of corruption was also said to have been presented. As a result Noboa agreed to take over the presidency in a constitutional replacement.

The new President is now said to be building a cabinet whose members are not politically compromised, and re-establishing a base by which the development of the economy can continue.

Among the policies being developed by Noboa, privatisation of the energy sector will continue, as will a plan announced in January to take the US dollar as the main currency in the country. This change, along with a group of accompanying laws that have gained the nickname of the ‘Trolleybus Law’ — because they pass through all the social and commercial sectors of the country — is now under revision by the new cabinet. It was hoped that the new version, fairer to all groups, will be voted into force in mid February.

The new government also retains the aim that electricity should be priced at 6 UScents per kWh, with a consumer tariff of 8.5 UScents per kWh.