October 4, 2010 / 4:56 PM / 9 years ago

Ecuador police bonus cuts take effect

QUITO (Reuters) - Police in Ecuador seemed ready to accept cuts to their bonuses on Monday without further protest amidst debate over whether renegade officers had tried to kill President Rafael Correa in a rebellion last week.

Correa, backed by many South American governments and who enjoys public approval ratings of more than 50 percent, called the revolt a coup and assassination attempt. But critics say he provoked police who were simply protesting a new law that ends promotion bonuses for police and soldiers.

Soldiers in armoured vehicles with mounted machine guns patrolled the streets over the weekend as police operations returned to normal. Protests did not continue.

On Thursday, armed police assaulted Correa and surrounded a hospital where he took refuge for hours before he was rescued in a nighttime storm of gunfire by loyal troops. At least four people died in the confrontation, with four more killed and almost 300 injured in unrest across the South American nation.

The riots were a reminder that Ecuador is one of Latin America’s most volatile countries, with three of eight presidents toppled in the decade before Correa brought a degree of stability to OPEC-member country in 2007.

One of Correa’s bodyguards was killed protecting a car in the presidential convoy, which images showed was hit with several bullets. The government says snipers who infiltrated the police protest tried to assassinate the 47-year-old president.

“Nobody shoots at the head of state to get a bonus, or so they can have a pay rise. There were other aims and intentions going on there,” Interior Minister Gustavo Jalkh said on Sunday.

Under the new benefits rules, designed to save money as cash-strapped Ecuador recovers from the global recession, police and soldiers will no longer paid bonuses when they are promoted or be given gifts at Christmas. The law was due to be published officially on Monday, making it binding.

Correa, a European-trained economist known for his combative approach to government, may now have to tread carefully when dealing with the army, which saved him last week but also called on him to retract the controversial law.

In a sign the military extracted concessions in return for loyalty, Defence Minister Javier Ponce promised armed forces chiefs to deposit two years’ of back pay for several military ranks, two newspapers reported on Sunday.

Ecuadorean presidents have typically been toppled when the army refuses to intervene to save them in the face of popular protests.

Correa has been defiant since the rebellion saying police pay has doubled during his government, but Policy Minister Doris Soliz said the law will be revised in Congress this week. She said the bonus cuts will remain but that the wording of the law will be clarified.

Correa defaulted on $3.2 billion in global bonds two years ago, calling the obligations “illegitimate.” The country has since relied on multilateral and bilateral lending to meet its financing needs.

Although the police were initially joined by some military units in their protests, other public sectors did not support the revolt.

Correa’s social initiatives — including health and education programs, a $35 per month stipend for the poor and home-care programs for the handicapped — have helped give him the strong base of support despite stagnant growth in the past year. Such support had eluded his predecessors.

Critics of the close ally of Venezuela’s President Hugo Chavez say he triggered the crisis by insisting on personally negotiating with the protesting police. They say the violence was spontaneous and not aimed at killing or toppling Correa.

“It is clear that there was no premeditated attempt to assassinate the president, and I don’t see an organized coup attempt,” said Marco Villarruel of Ecuador’s Central University.

Ecuador, which holds OPEC’s rotating presidency, produces an average of 485,000 barrels of crude per day, and sends just under half of that to the United States. Oil investment has slowed as the government and companies including Italy’s ENI, Brazil’s Petrobras and Spain’s Repsol-YPF negotiate new contracts.

Additional reporting by Santiago Silva, editing by Jackie Frank

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