A man was hurt while protesting the Ecuador government's economic policies in Guayllabamba, north of Quito VIDEO CNN's Harris Whitbeck reports on Ecuador's economic woes Windows Media 28K 80K

July 14, 1999
Web posted at: 7:29 p.m. EDT (2329 GMT)

QUITO, Ecuador -- Thousands of people were forced to walk to work while police clashed with demonstrators in the streets of Ecuador's capital, Quito, as a transport strike ground into its tenth day Wednesday.

A day after Congress revoked a state of emergency imposed by President Jamil Mahuad to deal with the strike, Ecuador's leader imposed another one. Police fired tear gas at demonstrators manning several road blocks.

"Mahuad, in appreciation of the gravity of the country's situation, needs legal instruments which guarantee order, public safety and safeguard public and private property," said Interior Minister Vladimiro Alvarez.

The state of emergency allows soldiers and police to order some 50,000 strikers off the streets or detain them.

But for many Ecuadoreans, Mahuad, elected just last year, has become the target for discontent. His decision to hike taxes and raise prices for gasoline as part of an economic austerity package triggered the strike by truck drivers and taxi drivers.

"He was supposed to create more jobs. He told us he knew what to do to improve the situation here," said Jorge Marcillo, a striking taxi driver. "But all he has done has been to drive Ecuador into shambles."

The Andean nation of 12.2 million, where two-thirds of the people live below the poverty line, is facing its worst economic crisis in decades, saddled by more than $16 billion in debt.

Critics of Mahuad's attempts to impose austerity measures to lower the debt say the people of Ecuador shouldn't be made to suffer the consequences of earlier economic policies that went sour.

Because of the paralyzing strike, food stocks in stores have been reduced while prices have risen 20 percent. At public hospitals, where some employees say they have not been paid in months, only patients seeking emergency care are being admitted -- and some doctors say that even those patients are having trouble finding the care they need.

The unrest has spread beyond Quito. Wednesday, in the Tabacundo area, 25 miles (40 kilometers) north of the capital, strikers scatter thick nails on the road to render it impassable. In the Chillos Valley, east of Quito, demonstrators placed rocks and burned tires on the road, as they chanted slogans demanding Mahuad's resignation.

Talks between the government and the transport unions went nowhere Wednesday. Since the strike began, police have arrested nearly 400 people, and at least 12 protesters have suffered bullet wounds.

Strikers are demanding that the government rescind the fuel price increase and freeze prices for two years. They rejected a government offer Monday to freeze the price increase until December.

Correspondent Harris Whitbeck and Reuters contributed to this report.

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