Ecuadorean President Lenin Moreno has promised to repeal an IMF-backed decree that slashed fuel subsidies, as triumphant protesters who had agitated against it went home and the capital picked up the pieces left by nearly two weeks of unrest.
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The law eliminated four-decade-old fuel subsidies and was estimated to have freed up nearly $US1.5 billion ($A2.2 billion) per year in the government budget, helping to shrink the fiscal deficit as required under a deal Moreno signed with the International Monetary Fund.
But the measure was hugely unpopular and sparked days of protests led by indigenous groups that turned increasingly violent despite a military-enforced curfew.
Moreno gave into the chief demand of demonstrators late on Sunday and tweeted on Monday that a new decree would be issued to ensure that resources go to those who most need them, though the details were unclear.
"We have opted for peace," Moreno said on Twitter.
The clashes marked the latest in a series of political convulsions sparked by IMF-backed reform plans in Latin America, where increased polarisation between the right and left is causing widespread friction amid efforts to overhaul hidebound economies.
Analysts said Moreno, who took office in 2017 after campaigning as the leftist successor to former President Rafael Correa, had been severely weakened by the protests, with the fiscal problems still unresolved.
"While Moreno has survived for now, he is not yet out of the woods. Once again, Ecuador's indigenous sector has proven its strength and now will be emboldened to look for concessions from the government in other areas," said Eileen Gavin, senior Latin America analyst at Verisk Maplecroft.
"This inevitably means a slower fiscal adjustment between now and the 2021 election," Gavin added in an email.
Nonetheless, Moreno's actions brought a much-needed measure of calm to the streets of the capital Quito, where residents began to restore order and clear away the makeshift blockades that sprang up in recent days.
Ecuadorean indigenous leader Jaime Vargas said on Monday that petrol and diesel prices and transportation fares must return to levels that were in effect before the government's now-cancelled plan to slash fuel subsidies.
The protests grew increasingly chaotic in recent days after the government launched a crackdown against extremists who it said had infiltrated protests.
Authorities reported that the office of the comptroller, a local TV station and military vehicles were set on fire.
Indigenous protesters who streamed into Quito from Andean and Amazonian provinces to join the protests piled into buses that departed the city on Monday.
"We're going back to our territories," said Inti Killa, an indigenous man from the Amazonian region of Napo.
The city technically remained under a daytime curfew on Monday. But residents largely ignored it and headed to work.
Australian Associated Press
