(From Reuters) Ecuador military backs government amid protests

By Carlos A. DeJuana

QUITO, Jan 20 (Reuters) - Ecuador's armed forces came out in support of 
President Jamil Mahuad on Thursday in the face of demands by thousands 
of protesting Indians that he resign for failing to improve their 
living standards.

"The president is part of the democratic system,the constitution. We 
Ecuadoreans and the military have sworn to uphold that," Carlos Mendoza, 
chief of the armed forces joint command and interim defense minister, 
said.

Indigenous groups, who some say make up nearly half of Ecuador's 12.4 
million population, claim the government is corrupt and has mismanaged 
the economy to their detriment during the country's worst economic 
crisis in decades. They have demanded Mahuad, Congress and the Supreme 
Court step down.

They also sharply oppose Mahuad's plan to adopt the U.S. dollar as 
Ecuador's principle currency, fearing it will leave them further 
impoverished.

Indigenous leaders met with Mendoza and other military officials on 
Wednesday and asked the armed forces to help them create a new 
government which would better represent the interests of the largely 
poor Andean country.

"The Indians have some real requests," Mendoza told local television. 
But "change must be democratic."

Unlike other Latin American countries, Ecuador's armed forces are 
relatively well regarded by the people. The last military dictatorship 
ended in 1979. Close to 10,000 Indians, peasants, students and onlookers 
marched peacefully through Quito's streets on Wednesday dressed in their 
traditional garb, playing music and carrying rainbow- colored banners 
representing unity among Ecuador's vast indigenous peoples.

Antonio Vargas, who heads the Conaie Indian confederation leading the 
protest, says it represents 45 percent of Ecuador's 12.4 million people. 
Other estimates put the country's Indian population at one-third or 
less.

The protesters have threatened to block roads nationwide and practice 
other forms of civil disobedience until necessary to force the 
government out of office. Trees, burning tires and rocks laid across 
highways in the country's provinces have already closed markets or 
slowed activity in some smaller towns.

Privately Indians say they are chiefly seeking to end a history of 
poverty through deep structural economic and social reform -- with or 
without Mahuad.

Presidential spokesman Carlos Larreategui said protesters must drop 
their demands for the government's resignation if they hope to 
negotiate. "Their position is a dead-end," he said in a television 
interview Thursday.

Larreategui tried to minimize the Indian presence in the capital of 
1.2 million people saying "We think the critical day was yesterday and 
that the protest's force is going to decline in the next couple of 
days."

Analysts say Mahuad, 50, who took office in August 1998 after being 
elected the previous May, must get Congress to approve his dollar 
proposal and resolve the Indian problem if he hopes to last to the end 
of his term in 2003.

The Harvard-trained lawyer's popularity has rebounded slightly but is 
still below 20 percent after 17 months in office in which Ecuador's 
economy has worsened due to bad weather, poor export prices, rising 
unemployment and poverty, a banking crisis and a foreign debt load 
almost equal to its economic output.

Saying it simply could not pay, Ecuador became the first country ever 
to default on its Brady bonds, a type of debt created in the 1980s to 
help emerging market countries.