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Economy & Business - August 2021

ECUADOR: Lasso brought to the negotiating table over price controls

In the two months since Ecuador’s President Guillermo Lasso took office in late May, the issue of price controls for basic goods has emerged as the most likely source of conflict between his government and various civil society groups. To prevent protests, the government has resorted to dialogue with both the transport sector that is demanding the partial reinstatement of fuel subsidies, which is being supported by the indigenous movement; and farmers, who are calling for an increase in the set price of rice. Both demands go against Lasso’s free market instincts. However, the government has indicated that it will seek compromises, and indeed recently raised the price of rice by US$1, indicating its desire to avoid potentially politically bruising mobilisations at a time when it is still attempting to establish its authority.

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