ECUADOR TROUBLES SEEN AS THREAT TO DRUG WAR

Poor Indians Bid For Social Reform

QUITO, Ecuador President Gustavo Noboa faced the toughest challenge of
his presidency when thousands of angry Indian farmers descended on the
capital late last month and also blocked major roads nationwide in their
campaign for economic and social reforms.

In most democratic nations such protests would not have been cause for
alarm, but this is Ecuador.

The previous president, Jamil Mahuad, was overthrown in January 2000 in
a lightning coup involving an alliance between indigenous groups and the
military. The coup put Noboa in office, and the shock wave was felt all
the way to Washington.

This time, the demonstration against Noboa's government ended in a
truce. After 10 days of clashes with troops and police, the farmers
returned to the Andean highlands with some key compromises in Ecuador's
austerity program.

The political battle highlighted the ongoing fight to gain recognition
for the nation's impoverished Indian population, a growing political
force that analysts say will continue to challenge Ecuador's stability
unless there are economic improvements.

It is a warning taken seriously in a country that has had five
presidents in five years. As one Ecuadorean businessman slyly observed:
"The national sport here is not soccer, it is changing presidents."

Last year's coup and the political and economic fallout have raised
concerns among many leaders, including those in the United States, who
want to avert another meltdown in a country key to the success of an
escalating drug war in neighboring Colombia.

U.S. officials reacted quickly during the coup, which lasted only hours.
The Clinton administration pressured the three-man junta that seized
power from President Mahuad to hand over control to Noboa, who was vice
president. Ecuador's political stability, vital to the region and
important to Washington, was maintained.

With a recent agreement between Ecuador and the United States to begin
anti-narcotics surveillance operations from an Ecuadorean military
base--part of a U.S.-supported anti-drug offensive under way in
Colombia--the stakes are even higher.

Already, U.S. officials have been monitoring Ecuador's border with
Colombia as violence linked to the drug trade has begun spilling over.

But some analysts in Ecuador warn that the underlying economic divide
that played a major role in last year's social unrest is still cause for
concern.

About a third of the nation's 12.5 million inhabitants are Indians. As
many as 90 percent of Ecuadoreans are at least part Indian. But more
than 50 percent of Ecuador's wealth is controlled by whites, who make up
10 percent of the population.

This economic imbalance means Ecuador's Indians, the vast majority of
whom are poor, often live or die by the strength of their backs, tending
infertile plots of land in rural areas.

As a result of widespread rural poverty, more than 80 percent of Indian
homes do not have toilets, 44 percent do not have electricity and less
than half have access to potable water. Access to good health care and
educational opportunities is limited.

"The government says the economy is improving, but for Indians in the
countryside and in the cities, things have not changed," said Antonio
Vargas, president of the Confederation of Indigenous Nationalities of
Ecuador, the country's principal Indian advocacy group.

Vargas was one member of the junta that ousted Mahuad.

"For them, things are as bad as they ever have been," Vargas said.

"Our plan is not to overthrow the government, but we will do whatever we
have to do to make a change," he said.

This discontent has brought a push for more political power among
Indians, who gained national attention when they paralyzed commerce by
blocking highways and government roads around the capital, Quito, in
1990.

Soon, Indians formed their own political party and in 1996 they elected
eight members of Congress.

Last year, with the help of the military, Mahuad was overthrown, though
some believe the military used the indigenous movement and the country's
economic chaos to advance its own agenda.

Now, Noboa is faced with surviving politically as U.S. interest in
Ecuador increases.

Many analysts say the country is on the mend economically. It replaced
the sucre with the U.S. dollar as its official currency last year.

This staved off an anticipated period of hyperinflation and stabilized
interest rates after the collapse of Ecuador's corrupt banking system.

But while the economy is estimated to have grown by more than 3 percent
in 2000, economic austerity measures agreed to by the government as part
of a $300 million deal with the International Monetary Fund have hit the
indigenous population hard.

Last month, Indians occupied a university campus in Quito and demanded a
repeal of price hikes in essentials from cooking gas to local bus fares,
ordered in December by the cash-strapped government looking for revenue.

After violent clashes left four people dead, the government agreed to
measures that included reducing cooking gas prices by 20 percent and
freezing fuel prices for the rest of the year.

"The protests have been quite strong," said Simon Pachano, a Quito
political analyst. "In order for Noboa to survive, he must learn to
negotiate with a variety of groups and show some strong economic
results."

Meanwhile, though officials expect a strong financial infusion from the
building of a new oil pipeline, Ecuador still suffers from a weak
banking sector, and recovery will be only short-lived without deep
economic reform. Ecuador's annual consumer price inflation was the
highest in Latin America last year at 91 percent.

One of the most significant signs that much remains to be done can be
seen near the departure terminal at the airport in Quito.

Here families that have saved their money gather daily, their faces
pressed against the iron gates, watching planes take off with their
loved ones, their hopes soaring with them. An unprecedented number of
Ecuadoreans are leaving, heading to the United States or Spain.

"The people have suffered from administration to administration," said
former army Col. Fausto Cobo, who was jailed and thrown out of the
military as one of the leaders of last year's coup.

"So when Noboa came to power, he was just another face."