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Bolivia rescinds fuel subsidy cuts
After week of strikes and demonstrations, South American country cancels decree that saw fuel costs soar.
Last Modified: 01 Jan 2011 07:28 GMT
Truck drivers and citizens groups took to the streets of several Bolivian cities to protest a fuel price increase [Reuters]

Faced with spreading civil unrest, the Bolivian president has scrapped a government decree that significantly raised fuel prices and provoked violent protests.

Evo Morales, the Bolivian president, presided over back-to-back government meetings on Friday aimed at crafting a strategy for quelling civil unrest in La Paz, Cochabamba and other major cities sparked by the decision to remove price controls.

Alvaro Garcia, the Bolivian vice president, filling in for Morales, had issued the decree on Sunday removing subsidies that keep fuel prices artificially low but cost the Bolivian government an estimated $380m per year.

As a result fuel prices went up by as much as 83 per cent in the sharpest increases since 1991.

"Answering to the wishes of the people, we have decided to rescind Decree number 748 and other measures that accompanied it," Morales told reporters at the presidential palace.
 
"There is no justification for raising transportation fares or food prices right now."

Violent clashes

Fifteen police officers were injured on Thursday in clashes with rock-wielding protesters near La Paz, as major cities in the Andean nation were crippled by a transport strike protesting huge fuel price hikes.

Initial reports from El Alto said police officers came under attack by rock-wielding demonstrators and responded by lobbing tear gas cannisters.

The residential area surrounding the La Paz international airport saw thousands of protesters throwing up barricades across access roads, burning tires and hurling stones at government buildings to vent their anger.

The crowds tried to set a monument to Cuban revolutionary hero Ernesto "Che" Guevara on fire, broke the doorway to the vice president's residence, torched highway toll booths and damaged offices of state-run BoA airlines and  the Central Obrera union.

Morales's palace in La Paz was besieged by angry demonstrators who were also repelled by police using tear gas.

The president attempted to stem the growing public discontent late Wednesday by announcing a 20 per cent minimum salary increase, but powerful unions and civil groups still promised further strikes, marches and disruptions.

Political fallout

Erecting barricades in El Alto as tyres and cars burned around her, an unrepentant Patricia Coyo said the poor "suffered the most" with serious knock-on effects such as hikes in transport fares and food prices.

"We put him in power, we can also bring him down," the 30-year-old laundry worker told AFP, as protestors waved Bolivian flags and set off firecrackers.

"We have to repeal this decree of starvation by this damn government!" Coyo said.

Demonstrators muttered the word "treason" to describe Morales's actions, compared him to Venezuelan President Hugo Chavez, his political mentor, and called for immediate elections.

Even Morales's strongest base, the coca growers union, voiced their disdain at the price hikes. Union protesters even halted truck routes by barricading a key road linking the country's centre to the south.

Truckers blocked key intersections with their rigs in Cochabamba, 400km southeast of La Paz, and Bolivia's economic capital Santa Cruz was also hard hit by a transport strike and demonstrations.

Franklin Duran, head of the Confederation of Drivers bus union, called a nationwide strike against the price hike and demanded a 100 per cent passenger fare increase.

Source:
Agencies
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