Nicaraguan President Daniel Ortega says a planned overhaul of the welfare system that sparked days of deadly protests has been cancelled, as he attempted to end the biggest crisis of his administration.
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Ortega has been on the defensive since demonstrations began on Wednesday against the plan to increase worker contributions to social security and to lower pensions.
Ensuing unrest has killed at least seven people and sparked looting and panic buying.
The Pope, the US government and business leaders all urged Ortega to stop the violence before he appeared on television and said the measures approved last week would be withdrawn.
"The previous resolution of April 16, 2018, which was the resolution that kicked off this whole situation, is being revoked, cancelled, put aside," Ortega said.
The government argues welfare changes are needed to bolster Nicaragua's finances, and Ortega said talks would be held to draft a new plan to strengthen the social security system.
But the government was stung by the protests, which one human rights group said had taken at least 25 lives. Stores in Managua were looted over the weekend, Reuters witnesses said.
Late on Saturday, local media said a reporter was shot and killed during a live broadcast from Bluefields, a town on the Caribbean coast hit by the unrest. Graphic footage of the incident soon spread onto local and social media.
The police crackdown on demonstrators and curbs on some media in the past few days have fuelled broader criticism of Ortega, who has tightened his hold on the country's institutions since he took office for a second time 11 years ago.
The US State Department on Sunday called for "broad-based dialogue" to end the dispute and "restore respect" for human rights, urging the government to let the media operate freely.
"We condemn the violence and the excessive force used by police and others against civilians who are exercising their ... right to freedom of expression and assembly," US State Department spokeswoman Heather Nauert said in statement.
Pope Francis called on Sunday for an end to the violence and called for differences to be "resolved peacefully and with a sense of responsibility."
A former Marxist guerrilla and Cold War antagonist of the US, Ortega has presided over a period of stable growth with a blend of socialist policies and capitalism.
But critics accuse Ortega and his wife, Vice President Rosario Murillo, of trying to establish a family dictatorship. The country remains one of the poorest in the Americas.
Australian Associated Press