However, the implementation of these reforms proved to be Lasso’s undoing. To achieve the fiscal targets required by the IMF and to fund social programs aimed at mitigating the pain of adjustment, Lasso pushed for a package of austerity measures. In early 2022, he proposed an "Economic Sustainability Act" that included eliminating subsidies for gasoline and diesel, reducing public sector hiring, and cutting benefits for retirees. These measures were met with immediate and fierce resistance. Indigenous groups, led by the Confederation of Indigenous Nationalities of Ecuador (CONAIE), took to the streets in massive protests, decrying the rising cost of living and the assault on public services. The government’s response, initially conciliatory, hardened, and the country was engulfed in its most severe social crisis in years. The protests paralyzed the country, blocking highways and disrupting oil production, which in turn slashed the very revenue the government needed. Lasso’s rigid adherence to his economic plan, even in the face of overwhelming social unrest, revealed a profound disconnect between the technocratic elite and the realities of life for ordinary Ecuadorians. The economic logic of removing subsidies was cold and clear—it was necessary for fiscal health—but the political and humanitarian cost was catastrophic for his approval ratings.
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