Ecuador unions call strike over privatization bill

QUITO, Ecuador (Reuters) -- Ecuadorean unions agreed on Friday to hold a nationwide strike next Wednesday to protest against a bill aimed at privatizing state-owned businesses.

The bill would allow private companies to own up to 51 percent of electricity or telecommunications companies.

It would also allow state oil company Petroecuador -- the country's main oil producer and the government's biggest source of income -- to form joint ventures but would not authorize any sale of the company itself.

"We have coordinated actions with the United Workers' Front, oil workers, electricity and health workers and teachers' unions to mobilize across the country," Popular Front President Luis Villacis told Reuters.

The Popular Front is an umbrella group representing unions, students and peasant farmers.

The bill was presented on July 13 and has been classified as economically urgent, which under Ecuador's constitution means that if the 123-member single chamber legislature does not approve or reject the bill in 30 days it will automatically become law. The government says it has enough support to pass the measure.

Prior attempts to privatize telecommunications utilities under other governments failed to attract sufficiently interested bidders.

The Andean country has struggled over the past year with its worst economic crisis in decades, defaulting on part of its international debt and watching inflation rocket higher.

In April, Ecuador adopted the U.S. dollar as its principle currency in a last-ditch move to stop the steep devaluation of its beleaguered currency, the sucre.

That followed the January ouster of President Jamil Mahuad by indigenous groups and rebel military leaders. His vice president, Gustavo Noboa, was sworn in after the brief bloodless coup and pursued Mahuad's economic agenda.

According to the United Nations, some 70 percent of Ecuador's 12.4 million people live in poverty.

Unions claim the privatizations would give away national assets to foreign companies.

The bill as sent to Congress would not allow shares in state companies to be bought with Ecuadorean government bonds, on which the country partially defaulted last year.

Copyright 2000 Reuters. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

For more Americas news, myCNN.com will bring you news from the areas and subjects you select.

See related sites about Americas

Note: Pages will open in a new browser window

External sites are not endorsed by CNN Interactive.