By The Associated Press

          QUITO, Ecuador (AP) -- Ecuador's penchant for eccentric presidents,
          circus-like politics and populist economics has backfired, and the tiny
          Andean nation must now pay the price, experts say.

          In an effort to ease Ecuador's worst economic crisis in decades and
          soothe fears of a financial meltdown, President Jamil Mahuad announced
          a package of harsh austerity measures on Thursday that have enraged
          leftist-led unions.

          Mahuad, who took office seven months ago, ordered the banks
          temporarily closed to prevent massive withdrawals, froze many dollar
          accounts for one year, doubled the price of gasoline, proposed prison for
          tax evaders and promised to accelerate privatizations and slash the
          bloated bureaucracy.

          Earlier, he had ended fuel subsidies and frozen public sector wages.

          Unions, students and Indian groups have called the measures a ``bullet in
          the head'' of Ecuadoreans and have vowed to topple Mahuad, calling for
          street protests and bank occupations Wednesday. Taxi drivers in Quito
          and Guayaquil have declared an indefinite strike starting Monday.

          Business leaders are furious at having their dollar accounts frozen.

          But so far, most Ecuadoreans -- already among the poorest in Latin
          America -- remain stunned. Violent protests have been limited.

          With banks scheduled to reopen Monday after being closed for a week,
          people are anxious to see what the financial future holds.

          ``I pray this signals a turn away from populism and easy solutions,''
          Ecuadorean economist Jose Samaniego said. ``Because what we were
          doing before was the road to self-destruction.''

          Past presidents have shamelessly doled out political patronage and cut
          deals with parties in Congress in order to pass laws, repeatedly
          approving deficit budgets and rejecting necessary but unpopular
          measures.

          From small shopkeepers to factory owners, few in Ecuador pay taxes
          and no president had been willing to crack down on evaders. The
          government estimates that 80 percent of taxes are not paid.

          As a result, Ecuador's budget deficit has ballooned to $1.2 billion and its
          national debt stands at $16 billion.

          Former President Abdala Bucaram, known as ``El Loco'' or ``The Crazy
          One'' for his eccentric behavior, used to pass out groceries to the poor in
          bags that had a large picture of his smiling face.

          Calling himself the ``defender of the poor,'' he held wild campaign rallies
          featuring scantily clad dancing girls.

          Bucaram was removed from office for ``mental incapacity'' in 1997 amid
          street protests and charges that he looted state coffers.

          ``The roots of Ecuador's crisis are political,'' said former Vice President
          Blasco Penaherrera. ``For more than 20 years, with only a few very brief
          respites, we have not had serious government.''

          While many of its Latin American neighbors privatized their state
          industries and opened markets to competition years ago, Ecuador has
          lagged behind, its economy propped up by oil and banana exports.

          As long as its leaders could spread oil and banana money to the military
          and political elites, no president dared buck the system, Penaherrera
          said.

          But when El Nino-driven floods devastated banana production last year
          and world oil prices fell, Ecuador entered what Mahuad called its ``worst
          economic crisis in 70 years.''

          With the patronage system disrupted, economists say Mahuad, a political
          centrist with a master's degree in public administration from Harvard, has
          a unique opportunity to create a modern, free-market state.

          But experts fear politics may doom the effort.

          Many key reforms must be approved by Congress, which can veto
          presidential legislation. Mahuad's party lacks a majority and the main
          parties have announced their opposition to the austerity measures.

          ``Mahuad doesn't have the support he needs in Congress to pass the
          reforms. I doubt that he can do it,'' Penaherrera said.

          Among his supporters, there are growing calls for Mahuad to bypass the
          discredited Congress and rule by decree.

          Since few presidents have held a majority in Congress, they have been
          forced to make deals with factions within the legislature to be able to
          govern.

          ``For years, Congress has prevented effective government and blocked
          Ecuador's development,'' Penaherrera said.

          Congressmen have engaged in fistfights, hurled glass ashtrays and even
          threatened to urinate on each other during sessions.

          ``We've had the worst politicians in the world,'' said 24-year-old
          newspaper vendor Aldo Guzman.
 
 

                     Copyright 1999 The New York Times Company