Following two days of sometimes violent protests, Guatemalan President Bernardo Arévalo has withdrawn a decree which would have made car insurance compulsory in the Central American nation.
Under the new law, owners of cars, lorries, buses and motorbikes would have been required to take out insurance to cover harm caused to others in the event of an accident.
President Arévalo argued that the new rule was necessary to compensate victims of traffic accidents, but many in Guatemala – where an estimated 55% live in poverty – said they would not be able to afford the extra cost.
Thousands blocked major roads and clashed with police in the days since the decree was made public on Monday.
The government had issued the decree in the wake of a deadly bus accident last month in which more than 50 people died.
Speaking at a news conference on Wednesday, the president said he had been elected to bring about necessary changes in the country, some of which could be difficult.
“I remain convinced that a new general transport law is the right way forward for the wellbeing of our country,” he said, adding that traffic accidents were the main cause of death in Guatemala.
He said that after talks with representatives of the protesters, the two sides had agreed to set up a technical committee to come up with a plan on how to introduce compulsory insurance within a year.
One of the concerns which had been voiced by the protesters was that the decree had been published without giving motorists an idea of the costs they would have incurred once it came into force on 1 May.
The blockades had paralysed parts of the capital, forcing schools and some businesses to close.
