Following a wave of angry protests across the country, Bolivia's President Evo Morales revoked a decree that lifted fuel subsidies and caused price hikes of up to 82%. In a message late Jan. 31, Morales said he had decided to rescind the decree after meeting with labor and indigenous leaders who convinced him that the price hike for gasoline, diesel and other fuels was "inopportune."

"That means that all the measures are no longer in effect," Morales said. "There's no justification right now for raising [transportation] fares nor for increasing the price of food or speculation. Everything returns to how it was before."

Morales was harshly criticized this week by unions and popular organizations, which accused him of taking "neo-liberal" measures and even demanded his resignation. The most violent protests took place Dec. 30 in El Alto, a heavily indigenous city near La Paz that has traditionally been a bastion of support for Morales. The protesters vandalized some government offices and set fire to tollbooths on a road to the capital.

More protests had been scheduled for this week, including a strike by the powerful miners' unions, a cross-country march by mine workers on La Paz, and plans for road blockades by peasant communities. Morales earlier in the week announced a 20% wage hike for public-sector employees to help offset the effect of the higher fuel prices, but the move did not appease the protesters.

The government said it ended the subsidies in response to widespread smuggling of cheap Bolivian gasoline and diesel into neighboring countries where prices are higher. The decree prompted bus line operators to double fares, even though the government authorized a fare hike of only 30%. Higher transportation costs also sent food prices soaring.

Even before the fuel price increases, El Alto's Federation of Neighborhood Boards (FEJUVE) had started to distance itself from Morales, complaining that his administration is neglecting the needs of the hardscrabble working-class city. "Evo, we're the people... Correct this mistake," said FEJUVE head Fanny Nina,

Police also used tear gas on protesters in La Paz, Cochabamba and other cities. Amid growing lines at banks, the government was also forced to deny rumors it was considering a "corralito," or a freeze on bank withdrawals.

"This measure isn't necessary, it is not opportune: I have listened," Morales announced just before midnight on New Year’s Eve. "I understand the recommendations of the workers." (Financial Times, LAHT, Jan. 2; Reuters, Dec. 30)

See our last post on Bolivia.

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