Many celebrate the return of fuel subsidies, but urge caution over plans to come up with new belt-tightening measures.

Quito, Ecuador – Jose Pilataxi danced around a fire in the centre of the Ecuadorian capital Quito on Sunday night celebrating with thousands of other protesters over the cancellation of an austerity package that sparked violent protests across the country for 11 days and brought the economy to a standstill.

“I’m very very happy for the whole country, and for having achieved the objective that we came for,” said Pilaxi, who travelled to Quito on Thursday from the province of Chimborazo to partake in the mass protests in the capital.

Celebrations lasted long into the night in a park known as El Arbolito, where just hours earlier protesters and police were engaged in a tense standoff marked by tear gas and rock-throwing.

Indigenous leaders called off the protests on Sunday night, after President Lenin Moreno agreed to withdraw the controversial reforms, which included the elimination of decades-long fuel subsidies that saw the price of diesel more than double overnight.

Moreno signed a decree on Monday, officially repealing the cuts and reverting fuel prices back to their previous levels.

The president also agreed to create a special commission made up of indigenous leaders and other social organisations to come up with new belt-tightening measures to address the country’s deficit.

The previous measures “directly affected the poorest of Ecuador, and they shouldn’t be touched”, said Andres Tapia, indigenous Kichwa leader and communications director for the Amazon Indigenous Confederation, CONFENIAE.

People celebrate on the street after the government of Ecuadorian President Lenin Moreno agreed to repeal a decree that ended fuel subsidies in Quito [Carlos Garcia Rawlins/Reuters]

Tapia, who was at a meeting on Sunday with the president, said the meeting was a success and CONFENIAE would now put together a technical team to come up with alternative economic measures.

“Logically, those who have more, the rich, should also contribute, that will be the base of our proposal,” Tapia told Al Jazeera, “but they shouldn’t affect the interests of the poorest, which also includes the indigenous people.”

No details were given about what these new measures would include, who would be at the negotiating table or when they would begin.

The decision was made after a nearly four-hour-long meeting between Moreno and indigenous leaders that was moderated by the United Nations and the Episcopal Conference.

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At least seven people were killed in the protests, which began on October 3. Hundreds were wounded and more than 1,000 people were arrested, according to the Ecuadorian Ombudsman.

Moreno had called a national state of emergency only four hours after protests began. While violent protests in the capital Quito also forced the government to move its operations to the coastal city of Guayaquil last week.

By Monday, large areas in the centre of Quito looked like the aftermath of a battle zone.

During the demonstrations, protesters blocked roads and occupied six oil wells, stopping production for days. Ecuador’s economy lost some $3bn, which was felt in various sectors, including the flower and broccoli industries which declared a state of emergency because of the losses incurred.

‘I don’t trust Moreno’

Despite the return to calm, some protesters were not happy with the decision taken on Sunday, saying the reforms should be called off entirely, rather than a making plan to formulate new ones.

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“I don’t trust President Moreno,” said Pilar, who refused to give her last name for fear of reprisals. She went to the celebrations at El Arbolito, carrying a metal pot and spoon to bang on.

“I came to say we will not give up!” she told Al Jazeera, “We will keep going until we feel content and compliant with the new measures.”

The decision to scrap the reforms caught many by surprise. Moreno had been firm throughout the protests about not repealing the reform, saying they were necessary to address the country’s fiscal deficit, which was part of an agreement for a $4.2-bn loan it received from the International Monetary Fund earlier this year.

People pass bricks from hand to hand during a cleanup of the streets in the aftermath of the last days’ protests, after the government of Ecuadorian President Lenin Moreno agreed to repeal a decree that ended fuel subsidies [Henry Romero/Reuters]

Political analyst Decio Machado said this was a historic moment, as he had never seen a resolution to this kind of conflict ever.

But the president’s decision on Sunday also puts the government in a very vulnerable position, Machado said. Many on the far right who agreed with the reforms now view Moreno’s policy reversal as a sign of weakness.

Machado said that it was also clear that Moreno’s government drastically underestimated the indigenous resistance.

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“The resolution that we came to yesterday could have been made in the third day of the strikes, and this country would have saved a lot of economic and human losses,” Machado told Al Jazeera.

Apart from the reforms, indigenous leaders also demanded that the government take responsibility for the deaths and wounded in last week’s protests, and demand that Interior Minister Maria Paula Romo and Minister of Defence Oswaldo Jarrin resign because they had been opposed to the protests. Moreno did not publicly comment on these requests.

Meanwhile, protesters and volunteers embarked in an enormous clean-up initiative on Monday, removing the debris from roads and parks in the centre of Quito.

Pilataxi, with his face covered with soot from the past days of fighting, said he was looking forward to going home, but would return if needed.

“If the government doesn’t comply, we will come back with more force, and the president knows this,” Pilataxi said.