Ecuador's caretaker president survives a series of attacks on oil wells

Social protests in the oil rich Amazon region led to a promise from the government and foreign companies to develop communities in return for their revenues

Ecuador's caretaker President Alfredo Palacio managed to bring some peace to the embattled South American nation by making concessions to the impoverished communities of the oil rich Amazon area that led violent protests this month demanding social programs to develop the area. Palacio is now expected to survive a crisis that throttled vital oil exports and helped lift world oil prices.

Social protests erupted last month in the Amazon region, which has been called by local newspapers as “a time bomb of poverty and violence.” President Palacio, whose term finishes in January 2007, was appointed in April after Congress fired President Lucio Gutierrez for meddling with the Supreme Court after weeks of social unrest.

In an attempt to lead a stable transition, Palacio obtained from oil multinationals a promise to invest more in local development projects and the government tacitly agreed not to prosecute those who carried out the attacks. Protesters led by local elected officials demanded energy firms invest more in the communities where they drill.

Promises ended the protests and eased potential economical crisis as oil is country's biggest export. It also helped the United States to secure vital supplies as Ecuador is South America's biggest supplier to the United States after Venezuela. But tensions were high and activists threaten to resume protests if the firms do not sign the deal.

During his brief tenure Palacio has taken a different line from Wall Street instructions. The new president allowed workers to spend their pensions before retirement and eliminate an oil fund that had been dedicated to repaying foreign debt.

According to observers, most Ecuadoreans did not approve of the oil field attacks but polls show many believe the complaints voiced by the militants are fair. Many Ecuadoreans say they resent oil companies for extracting great wealth without giving enough back in terms of road construction and other investments.

The oil conflict in Ecuador resembles many others in Latin America, a region plenty of natural resources signed by inequality and exploitation that seeks political stability but fails to resolve its deep social contradictions.

Photo: The attacks to oil infrastructure could return if a final deal is not signed