Ecuador

ECUADOR

LOCATION, SIZE, AND EXTENT
TOPOGRAPHY
CLIMATE
FLORA AND FAUNA
ENVIRONMENT
POPULATION
MIGRATION
ETHNIC GROUPS
LANGUAGES
RELIGIONS
TRANSPORTATION
HISTORY
GOVERNMENT
POLITICAL PARTIES
LOCAL GOVERNMENT
JUDICIAL SYSTEM
ARMED FORCES
INTERNATIONAL COOPERATION
ECONOMY
INCOME
LABOR
AGRICULTURE
ANIMAL HUSBANDRY
FISHING
FORESTRY
MINING
ENERGY AND POWER
INDUSTRY
SCIENCE AND TECHNOLOGY
DOMESTIC TRADE
FOREIGN TRADE
BALANCE OF PAYMENTS
BANKING AND SECURITIES
INSURANCE
PUBLIC FINANCE
TAXATION
CUSTOMS AND DUTIES
FOREIGN INVESTMENT
ECONOMIC DEVELOPMENT
SOCIAL DEVELOPMENT
HEALTH
HOUSING
EDUCATION
LIBRARIES AND MUSEUMS
MEDIA
ORGANIZATIONS
TOURISM, TRAVEL, AND RECREATION
FAMOUS ECUADORANS
DEPENDENCIES
BIBLIOGRAPHY

Republic of Ecuador

República del Ecuador

CAPITAL: Quito

FLAG: The flag consists of three horizontal stripes, the yellow uppermost stripe being equal to the combined widths of the blue center stripe and the red lower stripe; coat of arms superimposed at center of the flag.

ANTHEM: Salve, O Patria (Hail, O Fatherland).

MONETARY UNIT: The sucre was replaced by the US dollar as the official currency as of March 2000 at a rate of 25,000 sucres for us$1. The dollar ($) of 100 cents is a paper currency with a floating rate. There are coins of 1, 5, 10, 25, and 50 cents and 1 dollar, and notes of 1, 2, 5, 10, 20, 50, and 100 dollars. Although issuance of higher notes ceased in 1969, a limited number of notes of 500, 1,000, 5,000, and 10,000 dollars remain in circulation. sucre1 = us$0.00004 (or us$1 = sucre25,000) as of 2005.

WEIGHTS AND MEASURES: The metric system is the legal standard, but local and old Spanish units also are used.

HOLIDAYS: New Year's Day, 1 January; Epiphany, 6 January; Labor Day, 1 May; Battle of Pichincha, 24 May; Simón Bolívar's Birthday, 24 July; Quito's Independence Day, 10 August; Guayaquil's Independence Day, 9 October; Columbus Day, 12 October; All Saints' Day, 1 November; All Souls' Day, 2 November; Cuenca's Independence Day, 3 November; Foundation of Quito, 6 December; Christmas Day, 25 December. Movable holidays include Carnival and Holy Week.

TIME: Mainland, 7 am = noon GMT; Galápagos Islands, 6 am = noon GMT.

LOCATION, SIZE, AND EXTENT

The fourth-smallest country in South America, Ecuador is located on the west coast of the continent and is crossed by the equator (the country gets its name from the Spanish word for "equator"). It has a length of 714 km (444 mi) n–s and a width of 658 km (409 mi) e–w. Ecuador borders Colombia on the n, Peru on the e and s, and the Pacific Ocean on the w, with a total boundary length of 4,247 km (2,639 mi), of which 2,237 km (1,398 mi) is coastline. (Ecuador has lost about two-thirds of the territory it once claimed to Colombia and Peru.)

The Galápagos Islands, a province of Ecuador with an area totaling 8,010 sq km (3,093 sq mi), are approximately 1,130 km (700 mi) off the coast on the equator at 89° to 92°w. The total area of the republic and its territory is estimated at 283,560 sq km (109,483 sq mi). Comparatively, the area occupied by Ecuador is slightly smaller than the state of Nevada. Ecuador also claims about 200,000 sq km (77,000 sq mi) of land awarded to Peru under the 1942 Protocol of Río de Janeiro. Armed hostilities flared along a still undemarcated stretch of the border in January 1981, but by 20 February, a 14-km (9-mi) demilitarized zone had been arranged along the disputed line. Official maps of Ecuador show the entire region as Ecuadoran territory. Ecuador's capital city, Quito, is located in the north central part of the country.

TOPOGRAPHY

Ecuador is characterized by three distinct regions: the coast; the highlands, or Sierra; and the eastern interior lowlands, or Oriente. The coast, except for a hilly area west of Guayaquil, is a low alluvial plain from 32 to 185 km (20 to 115 mi) wide, comprising about one-quarter of the national territory. It extends from sea level to the base of the Cordillera Real of the Andes, at an elevation of about 460 m (1,500 ft). The Guayas in the southwest and the Esmeraldas in the northwest form the principal river systems and serve as important arteries of transportation in their respective regions.

The highlands constitute another fourth of the country. This region is formed by two parallel ranges of the Andes, from 110 to 290 km (70 to 180 mi) wide, and the intervening narrow central plateau, nearly 640 km (400 mi) long. This inter-Andean plateau is divided into 10 basins at altitudes from 2,400 to 2,900 m (7,800 to 9,500 ft), some draining east and some west. The Andes are studded with massive snow-capped volcanoes, the highest of which are Chimborazo, 6,267 m (20,561 ft); Cotopaxi, 5,897 m (19,347 ft), the world's third-highest active volcano; Cayambe, 5,790 m (18,996 ft); Antisana, 5,705 m (18,717 ft); Altar, 5,320 m (17,454 ft); Iliniza, 5,266 m (17,277 ft); Sangay, 5,230 m (17,159 ft); and Tungurahua, 5,016 m (16,457 ft).

The Oriente, forming part of the upper Amazon Basin, begins at the base of the Andes at about 1,200 m (4,000 ft). The land at first drops quickly and is segmented by rushing torrents escaping from the cold highlands. At about 260 m (850 ft), the forests become almost level, and the streams suddenly widen into sluggish, meandering rivers as they begin their journey down the Amazon system to the Atlantic.

Ecuador is located on the South American Tectonic Plate, near the Nazca Plate that is off the western coast. As such, it is an area of frequent, though usually moderate, seismic activity. One of the worst earthquakes in history occurred off the coast of Ecuador on 31 January 1906. An 8.8 magnitude quake triggered a tsunami that reached as far north as San Francisco and as far west as Japan. Between 500 and 1500 people were killed by the event. More recent quakes have been significantly less destructive. An earthquake of 5.7 magnitude occurred east of Quito on 9 November 2005.

CLIMATE

The climate varies with the region. Most of the coast consists of wet, tropical forest, increasingly humid toward the north. The cold Humboldt Current (also called the Peruvian Current), which flows northward along the coast of Peru and then heads out into the Pacific off the coast of central Ecuador, limits the rainfall on a strip of the coast extending from as far north as the Bay of Caráquez and widening to include most of the coastal lowlands south of Guayaquil. In the Guayaquil area there are two seasons: a hot rainy period, lasting from January to May; and a cooler dry season, during the rest of the year, when sea breezes modify the equatorial heat. The tropical forests of the Oriente, east of the Andes, are more humid than the coast; there, temperatures are high, and rain falls all year round.

The climate of the central plateau is governed mainly by the altitude. The capital, Quito, at 2,850 m (9,350 ft), has perpetual spring, with an average temperature of 13°c (55°f) and about 127 cm (50 in) of rainfall annually. The highlands are cut by numerous deep valleys, which bring subtropical climates to within a few miles of the more temperate areas. Cold and wind increase as the slopes surrounding the central plateau ascend to form the páramo, or highland meadow. The higher areas rise to peaks above 5,200 m (17,000 ft) that are perpetually covered with snow.

FLORA AND FAUNA

The arid savanna strip along about half of Ecuador's coast, with occasional low shrubs and isolated ceiba trees, contrasts sharply with the northern coast and the inner portion of the southern coast. In these humid regions, the typical dense growth of the tropical jungle abounds, extending as wet mossy forests up the Andean slopes to over 2,400 m (8,000 ft) in some places. Beyond the moisture barrier formed by the Western Cordillera, the high mountain slopes above 3,000 m (10,000 ft) are covered with wiry páramo grass and, in the northern province of Carchi, with a mulleinlike plant, the fraylejón (espeletia).

The highland valleys, at an altitude between 2,400 and 3,000 m (8,000 and 10,000 ft), support most of the temperate-zone plants; potatoes and corn, for example, have been raised there for thousands of years. There are few native trees in the highlands; eucalyptus was introduced in the 1860s and has been widely planted. The Oriente has little that is unique to tropical flora except for the delicious naranjilla, a small green orange used in making a conserve.

Ecuadoran forests support the usual smaller mammals, reptiles, and birds. In the highlands, the condor and a few other species of birds are found. There is relatively little wild game because of the density of the population and the intensive use of the land. The Amerindians still make some use of the llama in southern Ecuador. Throughout the highlands, Amerindians and some mestizos raise cavies (guinea pigs) in their homes as an important source of meat.

As of 2002, there were at least 302 species of mammals, 640 species of birds, and over 19,300 species of plants throughout the country.

ENVIRONMENT

Ecuador's major environmental problems are erosion in the highland areas; deforestation, especially in the Oriente; and water pollution. The Ecuadoran Institute of Water Resources estimated that the amount of arid land increased by 31.5% between 1954 and 1979, when 7.5% of the coastal lowland and Sierra were classified as arid. Between 1981 and 1985, 340,000 hectares (840,000 acres) of land were deforested annually. By the 1990s, Ecuador had lost over 30% of the original mangrove area, which covered over 117,000 hectares. From 1990–2000, the annual rate of deforestation was about 1.2%. In 2000, about 38% of the total land area was forested. It was estimated that, at current deforestation rates, coastal forests will be completely eliminated within 10 years and the Amazon forests will be gone within 40 years. Traditional farming practices have been blamed for most of these problems, but oil development has also played a role in the clearing of forests. A program for reforestation and maintenance of existing forests was initiated in 1979, but only 4,000 hectares (10,000 acres) were reforested annually during the early 1980s. Ecuador's principal environmental agency is the Ministry of Natural Resources and Energy. Land erosion is accelerated by deforestation.

Flooding and desertification are related problems which have damaged or eliminated valuable soil, particularly in the western coastal region. Water pollution is a problem due to the influx of domestic, industrial, and agricultural contaminants. The nation has 432 cu km of renewable water resources with 82% used for agricultural purposes. Some 92% of all urban dwellers and 77% of the rural population have access to pure drinking water.

In 2003, about 18% of the land area was legally protected. The Galápagos Islands and Sangay National Park are natural UNESCO World Heritage Sites. There are 11 Ramsar wetland sites. The expansion of Ecuador's population centers threatens its wildlife. Endangered species on the Ecuadoran mainland include the tundra peregrine falcon, yellow-tailed woolly monkey, five species of turtle (green sea, hawksbill, olive ridley, leatherback, and South American river), and three species of crocodile (spectacled caiman, black caiman, and American).

According to a 2006 report issued by the International Union for Conservation of Nature and Natural Resources (IUCN), threatened species included 34 types of mammals, 69 species of birds, 10 types of reptiles, 163 species of amphibians, 12 species of fish, 48 types of mollusks, and 1,815 species of plants. Endangered species in the Galápagos Islands include the dark-rumped petrel, Galápagos dark-rumped petrel (a subspecies), black petrel, African ass, two species of turtle (green sea and hawksbill), and the Galápagos giant tortoise and 11 of its subspecies. A subspecies of Galápagos giant tortoise is extinct, and another may be. Darwin's Galápagos mouse, the Fernandina Galapagos mouse, Charles Island tortoise, and the Duncan Island tortoise have become extinct.

Ecuador's natural attractions could lead to increased tourism, benefiting the economy. However, environmental problems, including further endangerment of native plants and animals, could be exacerbated without careful management of the areas attractive to tourists.

POPULATION

The population of Ecuador in 2005 was estimated by the United Nations (UN) at 13,032,000, which placed it at number 67 in population among the 193 nations of the world. In 2005, approximately 7% of the population was over 65 years of age, with another 33% of the population under 15 years of age. There were 101 males for every 100 females in the country. According to the UN, the annual population rate of change for 2005–10 was expected to be 2.1%, a rate the government viewed as too high. The government incorporated family life education into the school curriculum in an attempt to address the high adolescent fertility rate. The projected population for the year 2025 was 17,473,000. The population density was 46 per sq km (119 per sq mi).

The UN estimated that 61% of the population lived in urban areas in 2005, and that urban areas were growing at an annual rate of 2.05%. The capital city, Quito, had a population of 1,451,000 in that year. Guayaquil, the major port, had 2,387,000 metropolitan inhabitants. Other large cities and their estimated populations were Cuenca (285,700), Machala (204,400), and Portoviejo (175,700).

MIGRATION

Ecuador has had no large-scale immigration since the colonial period, and emigrants have generally outnumbered newcomers. There was an influx of European refugees in the late 1930s. In 1959, a modest attempt was made to colonize the northern coastal province of Esmeraldas with Italian families. Within Ecuador, the largest migration is from rural areas to the cities, as urban employment opportunities widen. There is also a growing movement from the overpopulated highlands to the virgin lands of the Oriente and the coast.

At the end of 2004, there were around 16,281 persons who concerned the United Nations High Commissioner for Refugees (UNHCR) in Ecuador. Most of these people were living and working in the capital, Quito. Also in 2004, there were 8,450 refugees under UNHCR's program in Ecuador, mostly from Colombia and Peru; there were also 1,660 asylum seekers, also mainly from Colombia and Peru. The net migration rate estimated for Ecuador in 2005 was -6.07 migrants per 1,000 population. In 2003 worker remittances totaled $1.5 billion. By 2005 about 12% of Ecuador's population had emigrated abroad, remitting almost $2 billion year. About one-third emigrated to Spain and over 600,000 Ecuadorians were in the United States, most in the New York City area and many from Azuay and Canar provinces. The government views the migration rates as satisfactory.

ETHNIC GROUPS

The population of Ecuador is about 65% mestizo (mixed Amerindian and Spanish). About 25% are Amerindian, 7% are Spanish or others, and another 3% are black. There are only a few groups of unassimilated Amerindians on the coast, notably the Colorados and Cayapas. The blacks live mainly in the northern coastal province of Esmeraldas. The Amazon Basin is inhabited by many primitive tribes, including the Jívaros, once famous for their shrunkenhead war trophies, and the Záparos, Aucas, Secoyas, and Cofanes. In the early 1980s, the tribes were organized in the Federación Shuar, which seeks to preserve their cultural identities.

LANGUAGES

The official language of Ecuador is Spanish, spoken by over 90% of the population. The Spanish of the coastal areas is similar to that of the other lowland areas of Latin America, maintaining something of the Andalusian characteristics, especially the dropping or slurring of the consonants represented by s and d. In the isolated highlands, a more precise Castilian pronunciation is found, but many words and even some of the singsong intonations of Quechua, the Amerindian language, have crept into the Spanish.

A small percentage of the total population speak only Quichua, a dialect of the Quechua language. Some speak Quichua in addition to Spanish. Quechua was imposed on the Amerindians of Ecuador by the conquering Incas in the 15th century, supplanting a number of unrelated languages. Remnants of these forgotten languages are retained in many modern place names. There has been little detailed study of the languages of the tribes of the Oriente.

RELIGIONS

Introduced by the Spaniards with the conquest in 1540, Roman Catholicism is by far the dominant religion. In fact, the Roman Catholic Church is considered to be one of the three pillars of society, along with the government and the military. According to 2005 estimates, over 95% of the population identified themselves as Roman Catholics. Some individuals combine customs and beliefs of traditional indigenous religions with their practice of Catholicism. Protestants, including Anglicans, Baptists, and Methodists, make up about 2% of the population. Other denominations include Lutherans, Jehovah's Witnesses, Mormons, Episcopalians, Presbyterians, Eastern Orthodox, and Rosicrucians. Buddhists, Baha'is, Hindus, Jews, Muslims, Scientologists, and the Unification Church have small communities. Animistic religions survive among the Amerindians of the Oriente. Itzachilatan is one Amerindian church. Some natives are followers of Inti, the Incan sun god. Freedom of worship is guaranteed by the constitution and this right is generally respected in practice.

TRANSPORTATION

The topography and climate of Ecuador have greatly hindered the development of adequate means of land transportation. In 2003 there were 43,197 km (26,843 mi) of highways, including 7,287 km (4,533 mi) of paved roads. The Pan American Highway (1,076 km/669 mi in Ecuador) extends the length of the highlands from Tulcán on the Colombian border to Loja in the south and on to Peru. In 1970, the five-nation Bolivarian Highway was undertaken, as were east–west routes linking the Oriente with the Sierra, and Guayaquil with its hinterland. The most important lateral route connecting the highlands and the coast runs from Latacunga, crossing a pass in the Cordillera Real over 3,650 m (12,000 ft) high, to Quevedo in the lowlands. In 2003, there were 529,359 passenger cars and 269,248 commercial vehicles.

Modern port facilities to serve Guayaquil were opened in 1963 on an estuary 10 km (6 mi) from the Guayas River. The Guayas River basin is important for transportation in the coastal provinces. Other international ports are Esmeraldas, Puerto Bolívar, and Manta; La Libertad and Balao can accommodate oil tankers. In 2005, Ecuador's merchant marine consisted of 31 ships of at least 1,000 GRT, with a total gross registered tonnage (GRT) of 241,403. As of 2003, Ecuador had 1,500 km (933 mi) of internal navigable waterways, but most are inaccessible.

Railways, all government owned, are of decreasing importance because of their poor condition and competition from highways. As of 2004, the nation's three railroad networks totaled 965 km (600 mi) of narrow gauge track, of which the most important line ran between Guayaquil and Quito. Floods in 1983 damaged much of the system, and by 1986 service had been restored on only some of the sections. The railway system has been largely inoperative for the last decade, following damage by a major earthquake.

Ecuador's rugged topography has hastened the growth of air travel. There were an estimated 205 airports and airfields in 2004. In 2005 a total of 85 had paved runways, and there was also one heliport. Those airports at Guayaquil (Simon Bolivar) and Quito (Mariscal Sucre) provide international service. In 2003, total scheduled airline traffic amounted to 8 million freight ton-km and around 1.123 million passengers were carried on scheduled domestic and international airline flights. The government-run Ecuatoriana de Aviación provides service between Ecuador and the rest of Latin America.

HISTORY

Archaeological explorations indicate that the coastal regions of present-day Ecuador supported corn-cultivating communities as early as 4500 bc. In the first few centuries ad, the population was divided into dozens of small isolated tribes. By ad 1000, the highland groups had formed a loose federation, the Kingdom of Quito, but they were absorbed into the Inca Empire in the late 15th century. Atahualpa, son of the conquering Inca Huayna Capac and a Quito princess, later became emperor, but by then the Spanish forces under Francisco Pizarro were gaining a foothold on the coast.

Pizarro's pilot, Bartolomé Ruiz, the first European to see the Ecuadorian coast, arrived in 1526 on a scouting expedition. The actual conquest reached Ecuador in 1531. Except for a few emeralds, from which their first landing place took its name (the city and province of Esmeraldas), the Spanish found those shores valuable only as a stopping place on their way to the riches of the Incas in Peru. Sebastian de Belacázar, a lieutenant of Pizarro, extended Spanish dominion northward from Peru after the conquest of the Incas. He found the northern capital of the Inca Empire left in ashes by the retreating Amerindians, and on that site in 1534, he founded the city of San Francisco de Quito, later to become the capital of the republic.

The Spanish governed the region as the Audiencia of Quito, part of the Viceroyalty of Peru. Quito, in the cool highlands, was soon steeped in culture and rich in ornately decorated churches and monasteries. Guayaquil, the principal seaport, grew slowly because of its unhealthy tropical climate, and would not become a major city until much later. The Spanish colonial period was a time of ruthless exploitation of the Amerindians and bickering and bloodshed among the Spanish in the struggle for power and riches.

Republic of Ecuador

The early stirrings of Ecuadorian independence were spread, in part, through the writings of the 18th-century satirist Francisco Javier Eugenio de Santa Cruz y Espejo. Abortive revolts against Spanish rule came in 1809 and in 1811. The decisive struggle began on 9 October 1820, with the proclamation of an independent Guayaquil. Finally, on 24 May 1822, with the Battle of Pinchincha, the Spanish were defeated. This victory unified the liberation movements of the continent. Simón Bolívar and José de San Martín met in Guayaquil in 1822 to consider the future of newly freed areas. Liberated Ecuador became part of Bolívar's dream, the Republic of Gran Colombia, consisting of modern Ecuador, Colombia, Venezuela, and Panama. In 1830, when this union collapsed, the traditional name Quito was dropped in favor of La República del Ecuador, "The Republic of the Equator."

The Republic's first president was Juan José Flores, one of Bolívar's aides. The 15-year period of Flores's domination was noted for iron-handed conservative rule. In 1832, he occupied the Galápagos Islands in a comic-opera invasion witnessed only by the giant tortoises native to the islands. Then, from 1845–60, Ecuador went through 11 presidents and juntas. The nation was split between pro-clerical Conservatives and the more secular Liberals, and regional strongmen vied for power.

From 1860 to 1875, Ecuador was ruled by the fervently religious Conservative Gabriel García Moreno, Ecuador's first great statesman. He sought peace and consolidation for his torn country through a rigid, theocratic government. His administration granted special privileges to the Roman Catholic Church, even dedicating the Republic to "The Sacred Heart of Jesus" by act of congress in 1873. Beyond his religious zeal, García Moreno was also known for developing roads and public education, beginning the Guayaquil-Quito railway, and putting Ecuador on a firm financial footing. However, his relentless conservatism caused bitter strife, culminating in the dictator's assassination in 1875. In the ensuing period of confusion, the Conservatives were not able to carry on the program of García, nor could the opposition take command until the emergence of Gen. Eloy Alfaro, who ushered in the Radical Liberal era with the revolution of 1895. He and the succeeding Liberal presidents were able to counteract much of García's program. Church and state were carefully separated, and liberty of thought, worship, and the press was established. The Guayaquil- Quito railway was completed, uniting the coast and the highlands commercially.

The Liberal era continued until 1944, with numerous interludes of violence and crisis. The economy rose and fell with world prices on such commodities as cocoa. Territory was lost to Brazil in 1904, Colombia in 1916, and finally Peru in 1942. The border dispute with Peru, originating in the colonial period, came to a climax when Peru invaded Ecuador's southern and Oriente (Amazon Basin) provinces. The Río de Janeiro Protocol awarded to Peru the greater part of the Amazon Basin territory claimed by Ecuador.

In 1944 José María Velasco Ibarra came to power as a nationalist denouncing the Río agreement. Velasco, who had served as president during 1934–35, ruled for three years until he was sent into exile. After three ineffective presidents in less than one year, Galo Plaza Lasso (1948–52) was elected to the presidency. Plaza, later chief of the OAS, ruled for four years. In 1952, Velasco Ibarra returned to office for four years, and was again elected in 1960. In his inaugural address, Velasco formally renounced the Treaty of 1942, and embarked on an economic program of "growth through inflation."

By 1961, with Ecuadorian currency in a slump and consumers heavily taxed, the air force revolted and sent Velasco into exile, thus ending Ecuador's unprecedented streak of elected governments. Vice President Carlos Julio Arosemena Monroy assumed the presidency on 7 November 1961. Arosemena lasted less than two years, and in July 1963, he was arrested by the military for "drunkenness" (a charge that could have been substantiated throughout his presidency) and sent into exile.

Military governments

A four-man military junta headed by Capt. Ramón Castro Jijón took over and ruled until March 1966. Elections were scheduled and held in October 1966 for a constitutional assembly. Otto Arosemena Gómez, cousin of Arosemena Monroy, became provisional president. In 1968, new elections were held for the presidency, won yet again by Velasco. On 22 June 1970, following a fiscal crisis, Velasco suspended the 1967 constitution and assumed dictatorial power. He dissolved Congress, reorganized the Supreme Court, and proceeded to rule by executive decree.

In June 1971, Velasco promised new presidential and congressional elections, which were scheduled for the following June. However, on 15 February 1972, Velasco was overthrown in a bloodless coup after he refused demands by senior army officers to postpone the elections. On the following day, Gen. Guillermo Rodríguez Lara was installed as head of a new military government. Velasco, deported to Panama, was granted asylum by Venezuela.

Return to elected government

The regime of General Rodríguez lasted for four years, and then he was ousted on 12 January 1976. A three-member Supreme Council assumed power and presidential elections took place in July 1978, but because none of the candidates received the required majority, a runoff election was held in April 1979. The winner was Jaime Roldós Aguilera, a populist running under the banner of the Concentration of Popular Forces. Christian Democrat Osvaldo Hurtado was made vice president. Both were inaugurated on 10 August 1979, the day Ecuador's current constitution went into effect. Roldós was killed in a plane crash on 24 May 1981, whereupon Hurtado became president until 1984.

Hurtado's term was marked by modest gains in the economy, but by 1984, a flagging economy, caused in part by widespread flooding, led to calls for change. The 1984 election was won by León Febres Cordero Rivadeneira, a conservative Social Christian who advocated a free-enterprise economic policy. Febres formed a coalition government and pressed his platform of reducing state intervention in the economy and making it more responsive to market forces. Just as it appeared that Febres's fiscal policies were about to bring widespread benefits to the populace, Ecuador was dealt two staggering blows: the 1986 plunge in world oil prices and a devastating earthquake in March 1987.

In presidential elections held 31 January 1988, Rodrigo Borja Cevallos of the Democratic Left (ID) Party and Abdalá Bucaram Ortiz of the Roldista Party (honoring ex-president Jaime Roldós) won the most votes in a field of 10 candidates. Borja won the runoff election, and took office along with a strong contingent in congress. The government made improvements in Ecuador's human rights record; however, economic troubles, particularly inflation, continued, and the ID lost half its congressional seats in midterm elections in 1990. In 1992, voters elected a conservative government, headed by President Sixto Durán-Ballén of the Republican Unity Party (PUR) and Vice President Alberto Dahik of the Conservative Party (CP). Durán-Ballén imposed severe economic measures to try to improve Ecuador's situation. These measures proved economically successful, but socially unpopular.

On 26 January 1995, the longstanding border dispute with Peru sprang to life once again when Ecuadorian troops attacked a Peruvian post. A full-fledged war began, which lasted until March 1, causing some 80 casualties and leaving 200 wounded. Although the war created further economic difficulties for Ecuador, it also stirred national pride and Durán-Ballén's popularity rose on the tide of fervent patriotism. By the fall of 1995, however, DuránBallén had once again fallen from favor due to charges of political corruption against himself and Vice President Alberto Dahik. Dahik fled the country, and Durán-Ballén served the remainder of his presidential term with little support.

In July 1996, Abdalá Bucaram was elected president. A showy and eccentric populist, Bucaram quickly alienated most of the political establishment. Bucaram had come to describe himself as "El Loco," or the madman, and citizens began to believe that he was indeed crazy. On February 6, Congress declared Bucaram mentally incompetent, charged him with corruption, and ousted him from office. Bucaram was accused of absconding with $100 million to $300 million in public funds during his brief presidency. Vice President Rosalia Arteaga and Fabian Alarcon, leader of Congress, claimed the presidency. Bucaram finally fled to Panama, while Arteaga agreed to briefly become president until Congress could establish right of succession. Alarcon emerged as interim president, and held office until the next presidential election in 1998. Through most of the 1990s, Ecuador suffered double-digit inflation as high as 50–60% a year. By 1999, the economy had contracted by 7.5%, and over 62% of Ecuadorians lived in poverty. Many of the country's Pacific Coast communities were battered by El Niño storms during early 1998, causing millions of dollars in damage.

Presidential elections were held in May 1998, with Harvard-educated Jamil Mahuad facing Alvaro Noboa, a banana tycoon and reputedly the richest man in the country. With promises for political stability and economic recovery, Mahuad prevailed at the polls and took office in July 1998. The next month, extensive constitutional reforms approved by a National Constituent Assembly took effect. Reforms gave unprecedented new rights to the country's indigenous peoples, who had become more vocal about their rights during the 1990s.

In 1996, the leaders of 11 indigenous groups joined with women, ecologists, and human rights workers to found the Pachakutik ("change" or "revolution" in Quichua) political movement. Under this new political umbrella, native peoples urged massive social changes, and won several seats in Congress by 2000. By late 1999, native peoples had grown disenchanted with Mahuad. Amerindian leaders accused him of lacking sympathy for native peoples' economic problems. Mahuad also had overseen a $1.2 billion bailout of 18 corrupt banks. The financial scandal only widened after a jailed banker claimed he had given $3.1 million to Mahuad's presidential campaign. In the meantime, Mahuad was unable to bring the economy under control and was making political enemies. In May 1999, Mahuad and Peruvian president Alberto Fujimori formally ended their border dispute. Ecuador gained a small sliver of land and navigation rights on some Peruvian rivers. The peace accord was seen as a defeat within Ecuador, where the military resented its loss of power and resources and was embarrassed by territorial concessions to Peru.

In January 2000, Mahuad announced plans to replace the sucre, the national currency, with the US dollar to stabilize the economy and end chronic inflation. Indigenous groups grew angry at the plan because they believed they would lose their savings. The sucre had been pegged at about 8,000 per dollar only a year earlier, but now stood at 25,000 per dollar. On 21 January, thousands of indigenous peoples marched to protest "dollarization" of the economy and called for Mahuad's ouster. With the aid of the military, they occupied the empty Congress building and Supreme Court. Mahuad fled the government palace. Gen. Carlos Mendoza took power and declared that a three-man junta would lead the country. The junta was composed of Antonio Vargas, leader of the Confederation of Indigenous Nationalities of Ecuador, Carlos Solorzano, a former Supreme Court justice, and Col. Lucio Gutierrez. The junta only lasted a few hours. Under intense international pressure, the junta was dissolved. Congress named the 62-year-old vice president, Gustavo Noboa Bejarano, as president. Noboa, a respected former academic carried out the dollarization of the economy. By giving up its currency, Ecuador turned its monetary policy to the US Federal Reserve seeking to stabilize its economy.

In the October 2002 presidential elections, newcomer Lucio Gutiérrez ended first with slightly over 20% of the vote in a field of 11 presidential candidates. He went on to win the runoff election with 58.7%, easily defeating Alvaro Noboa, the candidate favored by the outgoing president. Gutiérrez had entered politics after he led a coup attempt in 2000 to oust president Mahuad. Gutiérrez assembled a loose coalition of smaller parties and indigenous groups and campaigned against established parties. Although he used a populist rhetoric to win the election, after his inauguration he has sought to reassure foreign investors and international lending institutions. He has maintained the economic policies of his predecessors and has softened his criticism of the dollarization initiative. After years of economic stagnation, the economy began to show signs of recovery in 2001 and continued during the first years of the Gutiérrez government. Yet, more than 70% of the population lived in poverty in 2002.

Political tensions increased in 2004 and Gutiérrez showed signs of losing control. Despite strong economic growth, unemployment and underemployment remained high and the cost of living, exacerbated by the dollarization scheme, continued to hurt the poor. Because political parties have focused on obstructing the president's legislative initiatives and because Gutiérrez alienated support from former friendly legislators, the Gutiérrez government was widely deemed as ineffective. The failed effort by Gutiérrez to replace Supreme Court justices with friendlier faces was used by opponents to denounce Gutiérrez authoritarian tendencies. A former military coup plotter, Gutiérrez was often authoritarian and disrespectful of political opponents. Opposition against his government, fueled by opposition parties and built on popular discontent with economic policies, combined with Gutierrez's effort to undermine the Supreme Court were sufficient to provoke new protests against the government. Gutiérrez was forced to resign on 20 April 2005. Vice President Luis Alfredo Palacio, who had fallen out with Gutiérrez shortly after taking office, was appointed president. New presidential and parliamentary elections were scheduled for 26 November 2006.

The political challenges Ecuador faces are complex. The last three democratically elected presidents were forced to resign due to social protests or were removed from office by the legislature. The legislature became specialized on blocking presidential initiatives and weakening the executive. Yet, fragmented political parties failed to constitute themselves into a positive and constructive force. The political instability that has characterized Ecuador, even in good economic years, rendered the country's democracy as ineffectual.

GOVERNMENT

Since 1860, Ecuador has had 17 different constitutions. The most recent constitution came into force in August 1998. The previous constitution was approved on 10 August 1979, in preparation for a return from military to civilian rule. That document was amended in 1984 and again in 1996, but many Ecuadorians believed their needs were not reflected by that document. In 1998, a 70-member elected National Constituent Assembly rewrote the constitution. Unprecedented rights granted to native populations and blacks were among key reforms. The constitution gave them equal rights, additional rights that guaranteed their lands, protected their culture and customs. Native peoples were allowed to use their own languages and teach their children in their native languages at schools, although Spanish remained the official language of the nation. The constitution also emphasized unity in diversity. Eradicating poverty was a key component written into the new constitution, which also prohibits granting amnesty to human rights violators. The constitution also prohibits the death penalty.

The unicameral Chamber of Representatives (or Congress) consists of 100 members chosen for five-year terms by proportional representation from each of the country's 22 provinces. The chamber meets in full session for two months a year, leaving the rest of its business to four permanent committees. The president and vice president are elected for a four-year term, and are not allowed to seek consecutive terms. As is traditional in Ecuador, the president initiates the budget and appoints the cabinet, as well as provincial governors, many administrative employees, and diplomatic representatives. Under the 1998 constitutional reforms, the chamber may no longer remove cabinet ministers (it forced the finance minister out of office late in 1986, and ousted the president of Ecuador in February 1997), although the parliament has managed to oust two presidents since the constitution came into effect. The president also controls the armed forces and can declare a state of siege. Voting is compulsory for literate people aged 18 to 65, and optional for illiterates.

POLITICAL PARTIES

The constitution guarantees the right of democratic activities of political parties. A party must gain a minimum of 5% of the vote to remain in the electoral registry and retain its legal standing. The 1998 constitution also allows candidates without party affiliation or party backing to run for office. It also makes it the responsibility of the government to promote equal participation of men and women in politics. There are currently some 25 parties with parliamentary representation in Ecuador.

Two major parties played dominant roles prior to the 1960s. The Conservative Party (Partido Conservador—PC), which held sway during the first half of the republic's history, was the political representative for the Roman Catholic Church, and its support came from the large landowners of the highlands. The principal opposition, the Radical Liberal Party (Partido Liberal Radical—PLR), which rose to power in the revolution of 1895, was supported by businessmen and the newer city elite. It sought scrupulous separation of church and state, especially in public education, and called for the development of industry and the attraction of foreign capital.

Modern parties on the right include the Social Christian Party (PSC), the Republican Unity Party (PUR), and the Ecuadorian Conservative Party (PCE). On the left are the Democratic Left (ID), linked to the Social Democratic Movement; the Popular Democracy Party (DP) of former President Hurtado; the traditional Ecuadorian Radical Liberal Party (PLRE); and the Radical Alfarista Front (FRA).

Ecuador's populist tradition has given rise to many parties, organized along highly personalist lines, such as the Roldista Party (PRE), formerly headed by Abdalá Bucaram, the Popular Revolutionary Action (APRE), and the Concentration of Popular Forces (CFP).

The far left in Ecuador has been beset by factionalism and governmental intrusion. In the 1920s, the original Socialist Party of Ecuador split into the Socialist Party and the Communist Party. Further splits occurred with the advent of the Cuban revolution. Currently, the Popular Democratic Movement (MPD), the Ecuadorian Socialist Party (PSE), and other parties vie for the nonCommunist vote. Communists are divided between the Communist Party of Ecuador (PCE), which is identified as a pro-North Korean faction, and the Communist Party of Ecuador/Marxist-Leninist (PCMLE), which is identified as Maoist.

In the 1996 national elections, an indigenous electoral movement called Pachakutik (Quichua for "change") sponsored candidates for offices on the national, provincial, and local levels. Pachakutik candidates won eight seats in Congress as well as several mayoral positions in cities throughout the country. Their successes, although small on the overall national scale, increased the voice of indigenous peoples in Ecuadorian politics and prodded the traditional political parties to give more attention to long-neglected indigenous concerns. Lucio Gutiérrez allied with Pachakutik for the 2002 election and appointed some of that party's leaders to his cabinet. But the influence of the indigenous movement has been limited by Gutiérrez's personalist leadership and the party's limited political power resulting from its small parliamentary delegation. In fact, Gutiérrez demise began when Pachakutik legislators withdrew their support from the government in 2004.

In the October 2002 elections, 14 different parties won seats in the legislature. The PSC remained as the largest party, but it only captured 24 seats in the 100-member chamber. Lucio Gutiérrez's parties captured less than 10 seats. The persistent problem of weak political parties and personalist leadership by populist politicians has worsened. Since 1996, three presidents could not finish their constitutional terms. Political parties are widely seen as fractional and obstructionist with little intraparty discipline and unpredicted interparty alliances. The next legislative elections were scheduled for October 2006.

LOCAL GOVERNMENT

The three levels of local government—province, canton, and parish—are controlled by the central government in a fundamentally unitary system. Ecuador has 20 continental provinces, plus the insular Galápagos Islands. The provincial governors, who are appointed by the president, are responsible to the interior ministry. Each province is divided into cantons, which in urban areas are administratively subordinate to the municipality with which they coincide. A municipal council is popularly elected and in turn elects its officers. In the larger towns, a mayor is popularly elected. The municipality is unique in that it lies somewhat outside the unitary pattern and is less subject to national control than are the other units of local government. The rural canton, of little importance in the sparsely populated Oriente and northern coast, is significant in the more developed regions of the highlands and the coastal provinces of Guayas and Manabí. The highest official of the canton, the political chief, is appointed by the president on the recommendation of the provincial governor.

JUDICIAL SYSTEM

Traditionally, the judicial function has been carried out by five levels of tribunals. The parochial judge, the political lieutenant appointed by the president to supervise the affairs of the parish, handles only minor civil cases. Cantonal courts, at least one in each canton, try minor civil and criminal actions. Provincial courts handle all but a few of the criminal cases and the more serious civil and commercial suits. Superior courts handle appeals from the lower courts and have other administrative duties in the district; they may try original cases only if these relate to the affairs of their district. The Supreme Court has 31 justices and 3 alternates chosen by the National Chamber of Representatives for six-year periods.

Although citizens are afforded a wide range of freedoms and individual rights, there remain some shortcomings in the functioning of the judicial system, which is susceptible to political pressure. Police officers are tried only in closed session before police courts so that convictions for abuse or other violations are rare. Despite laws restricting arbitrary arrest and detention, such violations continue to occur in practice. Modernization of the court system began in 1993. In 1998, a new Judicial Council, with the power to administer the court system and discipline judges, began operations. In November of that year, the council's disciplinary committee fired two judges and two court employees for improperly releasing suspected drug traffickers. Because Ecuadorians continued to distrust the judicial system, reports of citizens taking the law into the own hands by lynching or burning criminal suspects continued into the year 2000.

Discontent with the judicial system, President Gutiérrez used repeated accusations of corruption to try to intervene with the Supreme Court. So far, efforts at reforming the judicial system have been primarily motivated by political short-term gains.

ARMED FORCES

In 2005 Ecuador's active armed forces personnel numbered 46,500, which were supported by 118,000 reservists. The Army numbered 50,000 personnel whose equipment included over 30 main battle tanks and 150 light tanks, over 90 reconnaisance vehicles, 130 armored personnel carriers, and more than 156 artillery pieces. The Navy consisted of 5,500 personnel including 1,700 Marines and 250 naval aviation personnel. Major naval units included 2 tactical submarines, 2 frigates, and 6 corvettes. The Air Force had 4,000 members and 22 combat capable aircraft that were made up of fighter ground attack aircraft. Paramilitary forces consisted of a 270-member Coast Guard. In 2005, Ecuador's defense budget totaled $593 million.

INTERNATIONAL COOPERATION

Ecuador is a charter member of the United Nations, having joined on 21 October 1945; it belongs to ECLAC and several specialized agencies. Ecuador is also a member of the Inter-American Development Bank, G-77, the Latin American Economic System (LAES), the Latin American Integration Association (LAIA), Latin American Energy Organization, the Andean Community of Nations, the OAS, and the Río Group. Ecuador received full membership in OPEC in 1973. The country holds associate status in Mercosur.

The country is part of the Nonaligned Movement and a signatory of the 1947 Río Treaty. Ecuador is also a part of the Agency for the Prohibition of Nuclear Weapons in Latin America and the Caribbean (OPANAL). In environmental cooperation, Ecuador is part of the Antarctic Treaty, the Basel Convention, the Convention on Biological Diversity, Ramsar, CITES, International Tropical Timber Agreements, the Kyoto Protocol, the Montréal Protocol, MARPOL, the Nuclear Test Ban Treaty, and the UN Conventions on the Law on Climate Change and Desertification.

ECONOMY

Ecuador is the world's leading exporter of bananas, and it also exports flowers, cocoa, coffee, tuna, and shrimp, and is developing export markets for other tropical fruits and vegetables. Tourism has become the country's third-largest earner of foreign exchange, after oil and remittances from expatriates. Since the 1970s Ecuador's economy has been dominated by oil, and vexed by indigenous opposition to the impacts of oil exploration and development. Ecuador's average annual GDP growth rate exceeded 9% in the 1970s, due largely to high oil prices. As oil prices fell in the early 1980s, debt began to increase. Furthermore, a major earthquake in 1987 interrupted oil production and exports. The average annual GDP growth rate between 1988 and 1998 was 2.9%. Growth stemmed mainly from increased petroleum production and expansionary fiscal policy.

The administration of President Ballén, elected in July 1992, raised petroleum derivatives taxes and electricity tariffs, while cutting public expenditures and freezing public sector employment. As a result, the 1992 public sector deficit fell from 7% to 2.8% in 1995. The inflation rate, which stood at 60% at the end of 1992, fell to 25% by 1995. Although the Ballén administration's reforms were relatively successful in stabilizing the economy and encouraging foreign investment, key sectors like petroleum, utilities, and aviation still experienced heavy government involvement.

The late 1990s brought a border dispute with Peru, shortages of electric power, and high interest rates that combined to restrain growth in the GDP. Large parastatals put off the interest of foreign investment. The growth rate was only 1% in 1998, the inflation rate soared to 43%, and government corruption was rampant. In 1999, the economy experienced a currency and banking crisis, a default on public debt, and soaring inflation, which reached 60% for the end of the year. Real GDP declined 6.3%, falling 8.2% on a per capita basis. In January 2000 the US dollar was adopted as legal tender, and in April the US dollar was adopted as Ecuador's legal currency in an effort to control inflation which soared to over 100%, ending the year at about 80%. Real GDP increased 2.8% in 2000 although only 0.9% on a per capita basis. In 2001 real GDP growth increased to 5.2% (3.2% on a per capita basis) and the inflation rate moderated to 22.4%. However, economic growth slowed again in 2002, a reflection mainly of internal inefficiencies in public administration and in the running of the state oil corporation. Real GDP grew an estimated 3% and only 1.1% on a per capita basis. End of period inflation, however, fell to 9%, the lowest level in decades. In March 2003 the IMF agreed to a one-year standby arrangement with Ecuador's new government designed to support measures to bring about macroeconomic stability beginning with a freeze on public sector wages. In December 2003 Ecuador's second pipeline, the $1.3-billion, 500-km (312-mi) Oleoducto de Crudos Pesador (OCP) pipeline opened. The OCP pipeline when it reaches full capacity will about double Ecuador's oil transporting capacity, which is 400,000 barrels per day, the capacity of the country's only other oil pipeline. In June 2003 the old pipeline was ruptured briefly by mud slides caused by heavy rains mixed with ash from the volcanic eruption of El Reventador. The participants in the OCP consortium include EnCana (Canada, 31.4%); Repsol-YPF (Spain, 25.6%); Pecom Energia (Argentina, 4.1%), Occidental Petroleum (United States, 12.2%); and AGIP (Italy, 7.5%), with construction by the Ecuador company Techint. The project implies increased exploration and development of Ecuador's oil reserves in order to fill the new pipeline. A substantial portion of increased oil revenues were then slated to be applied to paying down the country's $15 billion foreign debt.

While GDP growth in 2003 decreased to 2.7%, it jumped again to 6.9% in 2004, only to fall back to an estimated (Economist Intelligence Unit) 3% in 2005. However, since 2001 inflation has been steadily decreasing from a recorded 37.7% in 2001 to 2.4% in 2005.

INCOME

The US Central Intelligence Agency (CIA) reports that in 2005 Ecuador's gross domestic product (GDP) was estimated at $52.7 billion. The CIA defines GDP as the value of all final goods and services produced within a nation in a given year and computed on the basis of purchasing power parity (PPP) rather than value as measured on the basis of the rate of exchange based on current dollars. The per capita GDP was estimated at $3,900. The annual growth rate of GDP was estimated at 3%. The average inflation rate in 2005 was 2%. It was estimated that agriculture accounted for 7.4% of GDP, industry 31.8%, and services 60.8%.

According to the World Bank, in 2003 remittances from citizens working abroad totaled $1.545 billion or about $119 per capita and accounted for approximately 5.7% of GDP. Foreign aid receipts amounted to $176 million or about $14 per capita and accounted for approximately 0.7% of the gross national income (GNI).

The World Bank reports that in 2003 household consumption in Ecuador totaled $18.47 billion or about $1,421 per capita based on a GDP of $27.2 billion, measured in current dollars rather than PPP. Household consumption includes expenditures of individuals, households, and nongovernmental organizations on goods and services, excluding purchases of dwellings. It was estimated that for the period 1990 to 2003 household consumption grew at an average annual rate of 2.3%. In 2001 it was estimated that approximately 26% of household consumption was spent on food, 15% on fuel, 13% on health care, and 10% on education. It was estimated that in 2001 about 45% of the population had incomes below the poverty line.

LABOR

In 2005, there were an estimated 4.6 million employed wage earners in urban areas. As of 2003, agriculture accounted for 9.1%, followed by 21.7% in industry, and 69.2% in services. The unemployment rate in 2005 officially stood at 11.2%, although the underemployment rate was estimated at 47%.

Although most workers in Ecuador have the right to organize and join a union, legal protections have been insufficient. In addition, members of the armed forces, the police, and most public sector employees are prevented from joining a union, engaging in collective bargaining, or striking. In 2005, only 2–3% of the nation's labor force was affiliated with a labor union. Of those, 25% were covered by a collective bargaining agreement. The right to strike is protected by law after a mandatory 10-day cooling off period.

The labor code provides for a 40-hour workweek and two consectutive rest days each week. Overtime is limited to 12 hours per week at premium pay rates. The legal minimum working age was set at 15 years for all types of work. Also, minors are limited to working six hours per day and five days per week. Minors are also prevented from working in environments where there are hazardous conditions (mines), among dangerous machinery, and where there are toxic or dangerous substances. In spite of these laws, child labor remains a significant problem as of 2005. The minimum monthly wage plus mandatory bonuses equaled about $166 per month in 2005. However, this wage does not provide a satisfactory standard of living for a family, but most earn more than this proscribed amount. Health and safety standards are generally protected by the Labor Code.

AGRICULTURE

Although Ecuador's main economic activity has long been agriculture, only about 11% of the land is arable or under permanent crops, and another 18% is permanent pasture. Throughout the 1970s, agricultural development was neglected because of the emphasis on oil exploitation, and the sector showed negative rates of growth, declining by 5.4% in 1978, 2.8% in 1979, and 2% in 1980. During 1985–90, however, agriculture (along with fishing and forestry) showed an average annual increase of 4.8%. Agricultural production had an average annual growth of 1.7% during 1990–2000. But during 2002–04, crop production was down 2.8% from 1999–2001. Agriculture employed 25.9% of the labor force in 2000 and contributed 8% to GDP in 2003.

The land census of 1974, which covered a much larger area than the previous census of 1954, showed that during the intervening period the number of agricultural units had grown by 172,810. This increase was the result of agrarian reform and colonization, initiated in 1964. Ceilings imposed on the maximum size of holdings ranged from 800 hectares (2,000 acres) of arable land plus 1,000 hectares (2,500 acres) for pasture in the Sierra region to 2,500 hectares (6,200 acres) plus 1,000 hectares (2,500 acres) of pasture in the coastal region. The 1975 plans of the Ecuadoran Land Reform and Colonization Institute called for the redistribution of 80,000 hectares (198,000 acres) of land in the coastal region.

Traditionally, agricultural products have included bananas, coffee, tea, rice, sugar, beans, corn, potatoes, and tropical fruit. Exported products of more recent prominence include roses and carnations, strawberries, melons, asparagus, heart of palm, and tomatoes. The major crops of the highlands are corn, barley, wheat, kidney beans, potatoes, horsebeans, peas, and soybeans, all for domestic consumption. Agriculture on the coast is largely oriented toward the export market. Increased acreage and improved yields, as well as the government's price-support program, have caused rapid growth in agriculture. Most of the cacao crop is produced on plantations of 60 hectares (150 acres) or larger, but the more important banana and coffee crops are grown mainly on small landholdings by independent farmers. Banana exports rose from less than 5% of total exports after World War II (1939–45) to 62.2% in 1958; in 1974, they were 10.8%, and in 2004, 13.3%. Ecuador is the world's leading banana exporter, selling almost 4.7 million tons abroad in 2004. Cacao became a valuable export in the mid-1970s, but low prices and declining harvests had a negative impact on revenues until the early 1980s, when they began to rise again. In 1978 and 1979, coffee brought high export earnings ($281.2 million and $263.1 million, respectively), but with lower world prices, coffee export earnings fell to $106 million in 1981, despite an increase in production. Revenues rose steadily during the 1980s, reaching $290 million in 1986, but fell to $75 million in 1992. Coffee revenues in 2004 amounted to $14.6 million.

Principal commodities in 2004 (in tons) were sugar, 5,400,000; bananas, 5,900,000; corn, 651,000; plantains, 652,000; palm oil, 261,000; potatoes, 400,000; cocoa beans, 88,000; and coffee, 83,000. The production of paddy rice reached one million tons in 2004.

The agricultural sector of the economy presents potential for further development and growth. Crops for domestic consumption, particularly rice, barley, maize, African palm, and potatoes, continue to show growth due to increased area planted and improved yields. Other segments likely to experience growth are nontraditional agricultural products such as flowers, fresh fruit, vegetables, and processed foods. The government's agricultural policy focuses on integration into the World Trade Organization, import tariffs, and the lack of credit in the agricultural sector.

ANIMAL HUSBANDRY

The dairy industry is located in the most fertile valleys of the highland plateau from Ibarra to Riobamba, where irrigation is available. The beef cattle industry is an important part of the agricultural economy, as exports to Colombia and Peru have become more profitable; there were 4,951,300 head of cattle in 2005. Nearly all the sheep (2,550,000 in 2005) are in the highlands; most are raised by Amerindians and are pastured at over 2,700 m (9,000 ft). The wool is of poor quality. Hogs and goats, found throughout the country, are frequently diseased and poorly fed; in 2005 there were an estimated 1,949,000 hogs and 250,000 goats. The use of bananas as hog feed has made hog farming more attractive economically. Poultry production has been steadily growing—208,870 tons in 2005, up from an annual average of 69,000 tons during 1989–91. Beef production totaled 206,500 tons in 2005. Milk production in 2005 totaled 2,546,000 tons, and eggs, 75,000 tons.

FISHING

In the waters around the Galápagos Islands, Ecuador has some of the world's richest fishing grounds, particularly for tuna. In the past, these waters were exploited mainly by foreign companies, but in recent years, Ecuadoran enterprises have participated more fully. Shifts in ocean currents can cause great variance in the annual catch. Ecuador is a leading producer of canned tuna. Shrimp farming occupies some 110,000 hectares (over 270,000 acres). Ecuador produces more shrimp than any other nation in the Americas, and exports more than 35,000 tons annually, mostly to the United States. Rainbow trout aquaculture is being developed in the Andean highlands. The total catch in 2003 was 465,084 tons, down from 1,003,380 tons in 1986. Exports of fish and fish products in 2005 totaled $780.5 million.

Ecuador proclaimed sovereignty over its coastal waters to a limit of 200 km. In 1952, along with Peru and Chile, Ecuador signed the Declaration of Santiago (joined later by Colombia) to enforce these rights.

FORESTRY

One of Ecuador's vast untapped resources is its forestland. Forests, half of which are government owned, cover 10,557,000 hectares (26,086,000 acres), or 38.1% of the total mainland area. During 1990–2000, the annual average rate of deforestation was 1.2%. The tropical forests contain more than 2,240 known species of trees. Some of the denuded highlands have been planted with eucalyptus trees, which prevent soil erosion and provide both fuel and rough lumber. Total roundwood production in 2003 was 6.3 million cu m (221 million cu ft). About 50% of the wood cut was burned as fuel.

Ecuador is the world's largest producer and exporter of balsa. Several varieties of hardwoods, including species of mahogany, are used in cabinetmaking. Other forest products having some importance are the fiber for Panama hats (toquilla palm), vegetable ivory (tagua palm), kapok (ceiba tree), quinine (cinchona bark), and rubber.

MINING

Ecuador was heavily dependent on petroleum production, its leading industry and export commodity in 2003. The country had extensive but underdeveloped gold resources and other minerals. In 2001, Ecuador produced cadmium, copper, gold, lead, silver, zinc, cement, bentonite, common clay, kaolin, feldspar, crude gypsum, silica (glass sand), ferruginous sand, stone, sand and gravel (limestone, marble, pozzolan, pumice), salt, and sulfur. The country also contained known mineral resources of bismuth and tin. Production totals for 2003 included: gold, estimated at 3,020 kg, up from 2,750 kg in 2002; silver, 100 kg, up from 96 kg in 2002; kaolin, 9,330 metric tons, up from 8,483 metric tons in 2002; limestone, 6.28 million tons, down from 6.699 million tons in 2002; and marble, 292 metric tons, up from 265 metric tons in 2002. The slow pace of exploration and mining activities reflected low metal prices and recent political and economic uncertainties and disappointments.

ENERGY AND POWER

In recent years, an increasingly important percentage of Ecuador's national income has come from the petroleum industry. With estimated proven oil reserves of 4.6 billion barrels, as of 1 January 2005, Ecuador has the third-largest oil reserves in South America, and is the continent's fifth-largest oil producer. Initially, this industry was slow in developing, and production actually declined from 2,849,000 barrels of crude oil in 1965 to a low of 1,354,000 barrels in 1971. Starting in the 1970s, however, output increased dramatically, from 28,579,000 barrels in 1972 to 77,052,000 barrels in 1981, and to 109,400,000 barrels in 1991. After Ecuador withdrew from the Organization of the Petroleum Exporting Countries (OPEC) in 1992, the country's daily crude oil production rose from 321,000 barrels in 1992 to nearly 400,000 barrels by the end of 1995. Production in 2004 was estimated at 534,800 barrels per day, of which crude oil accounted for 528,200 barrels per day. Net oil exports in 2004 were estimated at 390,800 barrels per day. During the first 11 months of that year, oil exports to the United States totaled 226,000 barrels per day. Ecuador is only second to Venezuela as a source of oil imports for the United States. Petroecuador, the state oil agency, is the largest oil producer in Ecuador, controlling around 37% of the country's output.

The most productive oil fields are located in the northeast corner of Ecuador, with Occidental's Eden Yuturi the nation's largest oil field, which in the first half of 2004, produced more than 75,500 barrels per day. Ecuador has two major oil pipelines: the first, the 310-mile Sistema Oleducto Trans-Ecuatoriano (SOTE); and the 300-mile Oleducto de Crudos Pesados (OCP). The two pipelines can transport 400,000 barrels per day and 450,000 barrels per day, respectively. SOTE is frequently affected by natural disasters. In March 2004 oil shipments via SOTE were halted due to a landslide and in 1987, a large section of the pipeline was taken out by an earthquake, which cut Ecuador's oil output by more than 50% in that year. Ecuador has three oil refineries, with a combined capacity of 176,000 barrels per day, the largest of which, is the 100,000 barrel per day, Esmeraldas facility that is located on the Pacific coast.

Ecuador's proven reserves of natural gas are relatively small, estimated at 345 billion cu ft, as of 1 January 2005. Production and consumption of natural gas in 2002, is each estimated at 3.5 billion cu ft.

Although it is estimated that Ecuador had no consumption of coal in 2002, the country does have 26 million short tons of recoverable coal reserves.

Ecuador gets approximately 63% of its electric power from hydropower sources, with conventional thermal plants providing the remainder. However, the country's heavy reliance upon hydroelectric power has resulted in periodic power shortages during the dry season, which runs from October to March. In 1995, a serious drought affected hydroelectric generating capacity and daily blackouts became common. When drought struck again in 2001, the government declared an energy emergency, urging the public to conserve energy. More than 60% of the country's hydroelectric generating capacity comes from the Paute plant, located in the eastern part of the nation. In 2002, it is estimated that Ecuador had an installed generating capacity, electric power output, and consumption of: 3.3 GW; 11.5 billion kWh; and 10.8 billion kWh, respectively.

INDUSTRY

Ecuador enjoyed a period of prosperity in the 1970s, due in large part to a boom in oil. A decline in international oil prices, an earthquake in 1987, and political difficulties hampered industrial development during the 1980s. During 1988–98, manufacturing output increased by an annual average of 2.5% per year. According to official estimates, in 1998 manufacturing contributed an estimated 22% GDP, but achieved only minimal growth during that year, and negative growth in 1999. A default on external debt in 1999 resulted in a 70% depreciation of the currency which negatively impacted the industrial sector. The subsequent dollarization and rise in oil prices in the early 2000s caused a rise in export revenue.

Ecuador had three oil refineries in 2002, with a production capacity of 176,000 barrels per day. The construction of the new Transandean Heavy Oil Pipeline (OCP, in Spanish) due for completion in 2003 slated the petroleum industry for further growth. The most promising sectors, outside of oil, are linked to agriculture and natural resources. In the agricultural sector, expansion has come from processed foods and nontraditional agricultural products, such as flowers and fresh tropical fruits (mango, babaco, and passion fruit) and vegetables (asparagus and heart of palm). Other major manufactured items include canned seafood, automobiles, processed coffee, and cocoa. In the early part of the decade, Ecuador was also increasing its production of automobiles. Other industries include textiles, chemicals, wood products, metal work, paper products, and plastics.

SCIENCE AND TECHNOLOGY

In 1996, Ecuador had 20 agricultural, medical, scientific, and technical learned societies and research institutes, most notably the General Directorate of Hydrocarbons, the Institute of Nuclear Sciences, the Ecuadoran Institute of Natural Sciences, and the National Institute of Agricultural Research, all in Quito; the Charles Darwin Research Station in the Galápagos Islands; and the Naval Oceanographic Institute in Guayaquil. Ecuador has 19 colleges and universities offering degrees in basic and applied sciences. In 1987–97, science and engineering students accounted for 27% of college and university enrollments.

In 1998 (the latest year for which the following data is available) Ecuador had 84 researchers and 73 technicians per million people engaged in research and development (R&D). In that same year, R&D spending totaled $31.485 million, or 0.08% of GDP, of which 90.6% came from the government, with 8.9% and 0.5% coming from foreign sources and private nonprofit institutions, respectively. In 2002, high technology exports were valued at $34 million, accounting for 7% of all manufactured exports.

DOMESTIC TRADE

The major commercial centers are Quito, Guayaquil, Cuencam, and Santo Domingo de los Colorados. Importers may have headquarters in these locations, with retail branches and warehouses throughout the country. Most buyers prefer to make retail purchases directly from the manufacturers.

Rural domestic trade among the camposinos (indigenous peoples) is limited by frequent deep levels of poverty and underdevelopment. The (mostly urban) middle class is relatively moderate in size, and suffered major declines in purchasing power during the 1980s and 1990s, when economic growth faltered. Unemployment and underemployment have stimulated the growth of informal domestic economic activity.

The nation's economy is primarily based on petroleum and agricultural exports. The industrial segment, including petroleum, food processing, textiles, paper and wood products, plastics, lumber, chemicals, and fishing, primarily supplies the domestic market.

In the mountains, businesses are generally open from 8 am to 6 pm, with a two-hour midday break; lunch hours are longer along the coast during the hottest months (December–April). Banks are usually open from 9 am to 1:30 pm and from 2 to 6 pm during the week. Urban and suburban factories typically operated from 7 am to 4 pm.

FOREIGN TRADE

Ecuador's trade balance is generally positive, due overwhelmingly to its oil exports. Ecuador's oil reserves and refineries account for slightly over half of the country's commodity exports. Agricultural exports include bananas and plantains, shellfish, coffee and cocoa, and fish. In 2000, the government raised the price of Ecuadorian petrol by 60% in order to forge an economic recovery. Ecuador exports about half of its petroleum to the United States, while the United States supplied 24.3% of Ecuador's imports in 2005. Ecuador's exports in 2005 were destined for the United States (55%), Colombia (6.3%), Germany (5.3%), Russia (4%), and South Korea (4%). Imports came from the United States, Colombia (13%), Brazil (6.9%), Venequela (5.9%), and Japan (5.2%). Principal imports include raw materials, consumption goods, capital goods, fuel, and lubricants.

BALANCE OF PAYMENTS

Ecuador's balance of payments showed repeated deficits on current accounts until the vast increases in petroleum exports during the 1970s; only in 1974 did the net balance finally register a surplus of $26.7 million. International reserves rose steadily from $57.3 million in 1967 to $64.7 million in 1971, increased dramatically (with the rise in oil exports) from $143.4 million in 1972 to $1 billion by December 1980, and then dropped (as the oil market softened) to $304 million at the end of 1982, but were up to $500 million by 1987. In 1992, currency appreciation caused a narrowing in the trade surplus, which pushed down international reserves. In 1994, increased production in the petroleum, banana, construction, and manufacturing sectors generated growth of 4%, up from 3% the

Current Account			-455.0
Balance on goods		-71.0
Imports	-6,268.0
Exports	6,197.0
Balance on services		-692.0
Balance on income		-1,465.0
Current transfers		1,772.0
Capital Account			25.0
Financial Account			316.0
Direct investment abroad		…
Direct investment in Ecuador		1,555.0
Portfolio investment assets		…
Portfolio investment liabilities		8.0
Financial derivatives		…
Other investment assets		-904.0
Other investment liabilities		-343.0
Net Errors and Omissions			184.0
Reserves and Related Items			-70.0
(…) data not available or not significant.

year before, helping Ecuador post a merchandise trade surplus of $435 million. The surplus, however, was offset by a deficit on the services account resulting in a current account deficit of $807 million. Increased exports in 1995 were partially offset by increased military imports due to the conflict with Peru. The current account deficit in 1997 also showed an increase of military imports with a deficit of $734 million (according to the US embassy in Ecuador). The 1998 peace agreement with Peru assuaged the balance of payments deficit, but by that time the flight of private capital due to the unstable political situation had precipitated a negative turn in the economy. Capital flight still remained a problem in the early 2000s, due to a difficult investment climate, a fragile banking system, and continued economic and political uncertainty.

External debt was approximately 80% of GDP in 2000 (at approximately $14 billion in debt), an improvement over 1999 when the debt-to-GDP ratio was 100%, due in large measure to the depreciation of the sucre prior to dollarization. Though Ecuador's debt had risen to $18.1 billion by 2005, the debt-to-GDP ratio had dropped to roughly 60%.

The International Monetary Fund (IMF) reported that in 2003 Ecuador had exports of goods totaling roughly $6.2 billion and imports totaling roughly $6.3 billion, making for a trade deficit of approximately $72 million. The services credit totaled $900 million and debit $1.6 billion.

BANKING AND SECURITIES

The Central Bank of Ecuador, founded as a private bank in 1927, was declared an organ of the state in 1948 by the Monetary Board. The Central Bank issues and stabilizes currency, holds and manages foreign-exchange reserves, issues import and export permits, and regulates international transactions. The Monetary Board supervises government monetary, financial, and exchange policies. In 2002, there were 22 private banks operating in Ecuador. The five largest banks included Banco Popular, Filanbanco, Banco del Progreso, Banco del Pichincha, and Banco del Pacifico.

The government-owned National Development Bank (BNF) was founded in 1928 to provide credit for agricultural and industrial development. Other major government-owned financial institutions are the Bank of the State (BEDE), the National Finance Corporation (CFN), the Ecuadorian Housing Bank (BEV), and the Development Bank of Ecuador (BEDE).

On 1 December 1996, President Abdalá Bucaram anchored the fully convertible sucre to the dollar. In July 1997 the sucre was pegged at a fixed exchange rate of 4 new sucres (4,000 old sucres) per dollar. Bucaram was dismissed from the government for incompetency, and his plan was abandoned by the Alarcon government, which introduced a currency auction system to minimize fluctuations between the sucre and the dollar. The sucre depreciated by almost 200% in 1999. In 2000, President Mahuad decided to dollarize the economy at 25,000 sucres per dollar. He was also ousted in a coup d'etat on an anti-dollarization platform, but the incumbent President Naboa went ahead with the plan anyway. IMF-backed recovery plans for 2001 included massive amounts of foreign assistance. The International Monetary Fund reports that in 2001, currency and demand deposits—an aggregate commonly known as M1—were equal to $1.9 billion. In that same year, M2—an aggregate equal to M1 plus savings deposits, small time deposits, and money market mutual funds—was $4.9 billion. The discount rate, the interest rate at which the central bank lends to financial institutions in the short term, was 16.44%.

Trading in securities is relatively minor. Ecuador has two stock exchanges, one in Quito and the other in Guayaquil, both established in 1969. Market capitalization of the Guayaquil Stock Exchange was $2.581 billion in 2004, with a trading value of $99 million. As of that same year, a total of 30 companies were listed on the Guayaquil Stock Exchange. Purchase and sale of government and some private securities are functions of the National Financial Corp., which, along with several hundred business people, owns the two stock exchanges. This autonomous agency, founded in 1964, deals in mortgage bonds issued by banks for agricultural and industrial development and in general seeks to mobilize funds for technical assistance to industry.

INSURANCE

The principal branches of insurance are fire, marine, and vehicular, with some growth in aviation and aircraft. Other branches, including life, are still undeveloped. Work-related injuries and imports are required to be insured.

Insurance is closely governed by legal provisions determining necessary reserves and security funds and requiring a percentage of investments in government securities. The Superintendency of Banks periodically examines insurance operations and authorizes the formation of new companies. In accordance with the General Insurance Law of 1965, all insurance companies must apply to the Bank Superintendency for authority to operate.

It has been proposed to privatize the management of pension funds in the state security system, the Instituto Equatoriano de Seguridad Social (IESS). This will be made possible by separating the IESS into three sectors: health, pensions, and rural social security. In 2003, the value of all direct premiums written totaled $458 million, of which $412 million were nonlife. Colonial was the country's top nonlife insurer, in 2003 with $56.6 million gross premiums written. Pan American Life was the country's leading life insurer, with $12.8 million of gross life premiums written in that same year.

PUBLIC FINANCE

The central government, 20 provincial and some 100 municipal governments, and a large number of decentralized autonomous agencies constitute the public sector of the Ecuadoran economy. Central government budgets in the late 1970s and early 1980s grew expansively from one year to the next, with oil being the key source of income. Economic reforms instituted in 1992 rose domestic fuel prices and utility rates, eliminated subsidies, and brought the government budget into balance. These changes helped eliminate the budget deficit by 1994. The government was able to maintain budgetary control in 1995 when faced with increased military expenditures because of the boarder conflict with Peru, with a deficit of only 1.4% of GDP. However, the 1996 balance ran a deficit of 3% due to increased public spending. A growing fiscal deficit in the late 1990s due to declining oil prices, El Niño damage, and the inefficiencies of the public sector, caused the removal of several political leaders. The extreme financial crisis during 1999 and 2000 caused the total public debt to rise from 64% of GDP in 1997 to 116% of GDP in 1999.

The US Central Intelligence Agency (CIA) estimated that in 2005 Ecuador's central government took in revenues of approximately $8.8 billion and had expenditures of $8.1 billion. Revenues minus expenditures totaled approximately $669 million. Public debt in 2005 amounted to 44.9% of GDP. Total external debt was $17.01 billion.

TAXATION

Ecuador's tax structure includes an income tax, a 12% value-added tax (VAT), a stamp tax, a real estate tax, a transfer tax, municipal taxes, and inheritance and gift taxes.

As of 2005, the basic tax on corporate income was 25%. A reduced rate of 15% is available on the amount of profits that are reinvested. A withholding tax of 25% is also imposed upon certain payments made abroad. These include: royalty payments for technical assistance to nondomiciled companies and nonresident persons; payments to nonresident persons for services performed; payments made to nondomiciled firms for professional services performed abroad or occasional services performed in Ecuador. Dividends received as well as certain capital gains are not taxed. Personal income tax is assessed according to a progressive schedule ranging from 5–25%, up from a range of 0–15% in 2000. Additional rates and surcharges are applicable to certain classes of income. A stamp tax is levied on almost all commercial and legal documents. Estate, inheritance, and gift taxes vary according to the amount involved and the closeness of family relationship between donor and recipient. Municipal real estate taxes range from 0.3–2%. A special consumption tax is imposed on cigarettes, alcoholic beverages, soft drinks, motor vehicles, aircraft, helicopters, and ships.

CUSTOMS AND DUTIES

Import duties range from 0–20%, although there is a 35% duty applied to automobile imports. The average tariff rate is 13% ad valorem, as a result of Ecuador's accession to the World Trade Organization in 1996. Ecuador has a common external tariff (CET) with Colombia and Venezuela, ranging from 5% on raw materials and capital goods, 10% or 15% for intermediate goods, and 20% for consumer goods. A 12% VAT on imports based on CIF plus duty and all other taxes is placed on imports, with exemptions for agricultural inputs, petroleum development equipment, medicines, and books.

Ecuador is a member of the Andean Pact and the Latin American Integration Association (LAIA). Ecuador also has bilateral free trade agreements with Colombia, Bolivia, Venezuela, and Chile. All accord preferential duty treatment. Five free trade zones were established in 1991, including the Zona Franca de Esmeraldas, Zona Franca del Pacifico S.A., Zona Franca Centro Ecuatoriana CA, Zona Franca Manabi, and Parque Industrial de Cuenca CEM.

FOREIGN INVESTMENT

The government welcomes foreign investment and has substantially decreased regulatory barriers in recent years, though Ecuador's economy retains a considerable statist and protectionist orientation. As a member of the Andean Pact, Ecuador's foreign investment policy is governed largely by the parameters of Andean Pact Decisions 291 and 292 of May 1991, which provide for equal treatment of foreign and domestic investors, and unrestricted remittance of profits overseas. As of 8 January 1993, foreign investment was allowed without previous authorization in virtually all sectors of the economy that were open to domestic private investment, with total repatriation permitted.

In 1997 the government passed a law on promoting foreign investment. Investment in telecommunications and electricity were opened in 2000, when the government announced plans to sell half of the rights in each sector. In 2001 a new mining law went into effect designed to spur increased foreign investment in Ecuador's considerable untapped mineral reserves. The law provides for 30-year, renewable concessions of up to 5,000 hectares (with no limit on the number of concessions per investor), with exploration and production covered by a single license and environmental regulation under a single, central authority. Licensing fees are called "conservation patents" and increase over the life of the concession. Concessions can be both transmitted (passed on to heirs) and transferred (rented, leased, or sold.) Four major mining companies were awarded concessions in 2002.

Foreign oil companies still have to work with PetroEcuador, the state oil company, which is judged to be sorely in need of foreign investment funds, particularly after the government default in 1999 and near-collapse of domestic banking system. In 2003, PetroEcuador's problems—production was 35% below the level in 1990—were under study by an international financial group headed by the IMF, which will doubtless prescribe more openness to foreign investment in the sector.

The annual average inflow of foreign direct investment (FDI) in Ecuador amounted to $740.5 million in 1997 to 2000. In 2001 and 2002, the annual FDI inflow rose over 75% (to $1.33 billion and $1.28 billion, respectively), contrary to the worldwide trend of sharp decreases in inward FDI. Flows increased further in 2003, with the vast majority going to petroleum and mining. Major investors include the United States, Italy, Spain, and Argentina. Ecuador's good relations with the United States, plentiful natural resources, low wages and property costs, and membership in the Andean Community all serve to attract FDI. Detracting from these advantages, however, are the skills shortage, legal insecurity, and a small, infrastructurally underdeveloped business sector.

ECONOMIC DEVELOPMENT

In 1992–93, a major macroeconomic adjustment program was introduced, featuring a sizable currency devaluation (35%) and substantial increases in domestic fuel and electricity prices. Free trade agreements with Colombia, Venezuela, and Bolivia were signed, and new investment regulations were adopted to open up the economy to foreign investment and eliminate previous bureaucratic impediments. In April 1993, Ecuador qualified for Andean Trade Preference Act benefits, and became a member of the WTO in 1996.

High debt service obligations and external payments arrears to commercial banks impaired Ecuador's economic growth during the rest of the 1990s. The economy basically fell apart in 1999, despite aid throughout the decade from multilateral donors. In 2000, Ecuador accepted a $600 million loan from the International Monetary Fund (IMF), IBRD, and the Andean Development Corporation; while it rescheduled loan payments on $600 million with the Paris Club. This was part of a total $2 billion package from multilateral aid agencies to take place over a period of three years. In order to receive the money, the government was required to undertake a privatization program, and increase the price of petrol by 60%. Total external debt in 2001 reached $14 billion, most of which was in default. The country adopted the US dollar as legal tender in 2000.

In March 2003, Ecuador negotiated a 13-month, $205-million standby arrangement with the IMF. In 2002, economic growth was slow, due in part to tax cuts, a drop in oil output, large increases in a public wage bill, and a high-level corruption scandal. The government that took office in 2003 pledged to eliminate arrears, resolve remaining problems with closed banks, and modernize state-owned enterprises. Completion of a new Transandean Oil Pipeline was seen as a sign of potential output growth.

In 2004, Ecuador engaged in talks with Peru, Colombia, and the United States regarding a new free-trade agreement (to replace the 2002 Andean Trade Promotion and Drug Eradication Act—ATPDEA—that was scheduled to expire in December 2006). As opposed to other nations in the region, the emphasis of economic policy in Ecuador continues to be on primary goods, and less on diversification of trade, making it vulnerable to terms-of-trade shocks. A lack of support for the proposed Hydrocarbons Law (concerning the privatization of the state-owned oil sector) led to its demise in July 2004, in general leading to one more failure to implement privatization fully in Ecuador. In the meantime, the high oil prices have helped Ecuador to accumulate foreign currency reserves from $545 million in 2000 to $849 in 2004.

SOCIAL DEVELOPMENT

Ecuador's social security program is administered through the Ecuadorian Social Security Institute. A 2001 law to overhaul the system has not yet been implemented. The government funds the Bono de Desarrollo Humano program, which provides assistance to the elderly and disabled. Old age pensions, disability and survivorship benefits are funded through employee and employer contributions, depending on the type of occupation. Unemployment benefits for public and private employees are provided by individual severance accounts and a social insurance program. There is a minimal family allowance for impoverished mothers with at least one child under 18 years of age.

Despite equal legal status, women have fewer educational and employment opportunities than men. There are fewer women in the professions, and salary discrimination is common. Social, economic, and cultural change is promoted by the Ecuadorian Women's Permanent National Forum. The Law Against Violence Affecting Women and Children criminalized domestic abused including psychological abuse. It also created family courts and gave authorities the power to remove an abusive spouse from the home. However, domestic abuse remained widespread in 2004.

Indigenous peoples in the Amazon area are increasingly demanding that the government take into account their interests before making decisions that affect their land. Human rights organizations reported cases of mistreatment of detainees and incommunicado detention. The judicial system is slow and pretrial detention may be lengthy.

HEALTH

Health facilities are largely concentrated in the towns and are both too expensive and too distant to be used by most of the highland Amerindian population. Hospitals are operated by agencies of the national government, the municipalities, and private organizations or persons. As of 2004, there were an estimated 148 physicians, 157 nurses, and 17 dentists per 100,000 people. Health care expenditure was estimated at 3.6% of GDP.

In 2002, the birthrate was an estimated 25.5 per 1,000 people. As of 2000, 66% of married women (ages 15 to 49) used contraception. The infant mortality rate in 2005 was 23.66 per 1,000 live births. Life expectancy that year was 76.21 years. In 1997, Ecuador immunized large numbers of children up to one year old as follows: tuberculosis, 99%; diphtheria, pertussis, and tetanus, 76%; polio, 77%; and measles, 75%. The overall death rate was an estimated 5.4 per 1,000 people.

Malnutrition and infant mortality are the country's two basic health problems. Malaria is still a problem; 12,011 cases were reported in 1996. In 1999, there were 172 cases of tuberculosis per 100,000 people. In 1996, 40 cases of measles were reported. Cholera still persists; however, less than 1% of the 1,060 cases accounted for died of cholera in 1996. Other health problems are largely being controlled. Yellow fever was eliminated by the efforts of the Rockefeller Foundation. Two antituberculosis organizations have helped reduce the mortality from that disease, which earlier was responsible for one-fifth of the nation's deaths. In 2000, 71% of the population had access to safe drinking water and 59% had adequate sanitation.

The HIV/AIDS prevalence was 0.30 per 100 adults in 2003. As of 2004, there were approximately 21,000 people living with HIV/AIDS in the country. There were an estimated 1,700 deaths from AIDS in 2003.

HOUSING

In 2001, there were about 3,456,103 housing units in the country. About 72% of all housing units were detached, single-family homes, 9% were apartments, and 4% were ranchos or covachas, dwellings of wood, stone, or brick covered with palm leaves, straw or other vegetation. About 20,085 dwellings were choza, temporary shacks or huts. Owners occupied 67%. About 18% of the population live in inadequate housing structures. Almost all rural homes and many city dwellings on the coast are made with split bamboo siding and a palm thatch or corrugated iron roof.

Over the past decade, the government has received substantial amounts of money from international organizations for projects focusing on low-income housing. A housing development bank, Banco de la Vivienda, was established in 1961.

EDUCATION

Education is free and compulsory from ages 6 to 15. Primary education is six years, followed by three years of basic secondary school. This is followed by a diversified secondary program with students opting for two or three years of study in humanities, science, or technology. A two year vocational program is also offered. The academic year runs from October to July. The primary language of instruction is Spanish.

In 2001, about 73% of children were enrolled in some type of preschool program at age five. Primary school enrollment in 2003 was estimated at about 100% of age-eligible students. The same year, secondary school enrollment was about 50% of age-eligible students. It is estimated that about 99% of all students complete their primary education. The student-to-teacher ratio for primary school was at about 23:1 in 2000; the ratio for secondary school was about 12:1. In 2000, private schools accounted for about 22.7% of primary school enrollment and 24.6% of secondary enrollment.

The Central University of Ecuador dates from 1594. There are three Catholic universities, in Quito, Guayaquil, and Cuenca. The National Polytechnical School in Quito offers degrees in industrial science and mechanical engineering, while the Polytechnical School of the Littoral in Guayaquil provides training in naval and petroleum engineering and in the natural sciences. The adult literacy rate for 2004 was estimated at about 91%, with 92.3% for men and 89.7% for women.

The Ministry of Education is the principal authority for all educational programs except higher education, which is supervised by a national technical council. As of 2003, public expenditure on education was estimated at 1% of GDP, or 8% of total government expenditures.

LIBRARIES AND MUSEUMS

The oldest and most important library in Ecuador is the Central University Library in Quito. It was founded in 1586 and has 170,000 volumes. Other important collections are maintained at the Cuenca University Library (more than 63,000 volumes) and at the National Library in Quito (over 70,000 volumes). Libraries are also maintained by the other universities; the municipalities of Quito, Guayaquil, Cuenca, and Riobamba; the Ecuadoran Culture House; the Central Bank of Ecuador (48,000 volumes); and other organizations, including the Ecuadoran Culture House, which holds the Laura de Crespo room of National Authors. The library of the Pontificia Universidad Católica del Ecuador in Quito contains about 119,854 books and serves as a depository library of the United Nations.

A number of museums in Ecuador preserve and display paintings, sculpture, coins, records, and artifacts of historic and scientific interest. One of Ecuador's best collections of Inca and pre- Inca objects is found in a privately owned museum near Cuenca. Quito has the National Museum and Archives, the Museum of Modern Art, the Archaeological Museum and Art Galleries of the Central Bank of Ecuador, the Jijón and Caamaño Archaeological and Historical Museum, and the museum of the Ecuadoran Culture House, as well as other smaller collections in schools and government agencies. There are municipal museums in many smaller cities, as well as ethnographic and historical museums.

MEDIA

Between the main cities and towns there are radiotelephone links. Quito is connected by telegraph with Colombia and Peru, and there are telephone and cable connections with all parts of the world. In 2003, there were an estimated 122 mainline telephones for every 1,000 people; about 14,500 people were on a waiting list for telephone service installation. The same year, there were approximately 189 mobile phones in use for every 1,000 people.

Ecuador had 392 AM and 35 FM radio stations and 7 television stations as of 2001. In addition to the numerous local stations, there was one central government network, Radio Nacional del Ecuador. In 2003, there were an estimated 422 radios and 252 television sets for every 1,000 people. About 13.9 of every 1,000 people were cable subscribers. Also in 2003, there were 31.1 personal computers for every 1,000 people and 46 of every 1,000 people had access to the Internet. There were 38 secure Internet servers in the country in 2004.

In Quito, the leading newspapers, with their political tendencies and estimated daily circulations in 2004 as available, were: El Comercio, independent; Hoy, independent; Últimas Noticias, independent, 60,000; and La Hora, independent, 12,000. In Guayaquil, leading papers include El Extra, 380,000 (in 2004); El Universo, independent, 143,000; La Segunda, independent, 60,000; Expreso, independent, 60,000; and El Telegrafo, independent. In Cuenca, the conservative daily El Mercurio had a circulation of 18,000 in 2004.

The government requires all mass periodicals to participate in literacy and adult education campaigns. There is no censorship of newspapers or of radio and television stations, as ensured by Ecuador's constitution.

ORGANIZATIONS

There are about seven chambers of commerce and industry and at least 10 employers' organizations. Workers' and business organizations include the National Association of Cocoa Exporters, Textile Industry Association of Ecuador, and the National Association of Coffee Exporters. Trade unions are not common.

The outstanding contemporary learned society is the Ecuadoran Academy, founded in 1875, and the second academy in Spanish America. It is a correspondent of the Royal Spanish Academy. The Ecuadoran Culture House prints works of contemporary Ecuadoran writers, encourages the investigation of scientific and social problems, and conducts discussions on cultural matters. The Andean Institute of Popular Arts, based in Ecuador, is a multinational organization that promotes interest and study in the arts through special programs and scholarships.

The Federacion Medica Ecuatoriana (Medical Federation of Ecuador) promotes research and education on health issues and works to establish common policies and standards in healthcare. There are also a number of associations dedicated to research and education for specific fields of medicine and particular diseases and conditions. Professional networking and educational associations exist for many other fields as well.

Fraternal organizations and service clubs in Ecuador include the Masons, Rotary clubs, and Lions clubs. The Scout Association of Ecuador and the Girl Guides have active programs. There is a Junior Chamber Program promoting leadership development for youth. Sports associations are active in supporting amateur competitions in a number of pastimes. Many social and charitable organizations are sponsored by the Roman Catholic Church.

The Charles Darwin Foundation for the Galápagos Isles, with multinational interest and membership, is based in Quito. Golondrinas Foundation is another environmental conservation organization. The World Conservation Union has a regional office in Quito.

An organization called Ecuador Volunteer supports a number of service organizations throughout the country. The International Red Cross, Caritas, UNICEF, Habitat for Humanity, the Society of St. Vincent de Paul, and Amnesty International are active in the country.

TOURISM, TRAVEL, AND RECREATION

Ecuador's highlands, reached by air, by the spectacular railroad, or highway, are rich in natural beauty. Quito, the second-highest capital in the world, has modern hotels and transportation. Its churches and monasteries, with their delicately carved doors and altars, and an abundance of exquisite paintings and sculptures, make Quito, in the words of a 1979 UNESCO citation, a "cultural patrimony of mankind."

An important part of Ecuador's cultural life is the feria, or market day, which takes place weekly in many towns. The town of Otavalo, about 56 km (35 mi) north of Quito, is well-known for its colorful Saturday fairs. The Galápagos Islands, world-famous for their unusual wildlife, have become a popular site for ecotourism.

Tourism has experienced significant growth in Ecuador due to the natural attractions and architectural and historical sights. Further development of ecotourism must be carefully managed to avoid a negative impact on Ecuador's environment.

Tourists need a valid passport. Visas are only required for stays of over 90 days. Visitors need a yellow fever vaccination certificate if arriving from an infected area. Tourist facilities on the coast include modern resort hotels and fine beaches.

There were 760,766 tourists who arrived in Ecuador in 2003, about 55% from other countries in South America. That same year there were 38,237 hotel rooms with 86,466 beds. Tourism receipts totaled us$408 million.

In 2005, the US Department of State estimated the daily cost of staying in Quito was us$222. Expenses in Guayaquil were us$172 per day.

FAMOUS ECUADORANS

Ecuadorans claim Atahualpa (1500?–33), the last emperor of the Incas, as the first renowned figure in their country's history; during the civil war between him and his half-brother, Huáscar, his administration of the Inca empire was based in what is now Ecuador. The 16th-century Amerindian general Rumiñahui is remembered for his heroic resistance to Spanish conquest. During the colonial period, Quito produced notable artists and sculptors. Among these were Miguel de Santiago (d.1673) and the Amerindians Manuel Chile (Caspicara) and Pampite. Francisco Javier Eugenio de Santa Cruz y Espejo (1747–95), the national hero of Ecuador, inspired much of the independence movement through his political writings. Espejo advocated complete emancipation from Spain, autonomous government for each colony, and nationalization of the clergy. Although he did not live to take part in the War of Independence (he died in prison for his political activities), he was an important figure in its philosophical development.

Vicente Rocafuerte (1783–1847), an early president, made significant contributions to the development of the republic. Another president, Gabriel García Moreno (1821–75), was the first to achieve national consolidation; he also contributed to the literary development of the nation. Juan Montalvo (1823–89) bitterly and brilliantly opposed conservatism in his essays and other works. Eloy Alfaro (1841–1912), another outstanding president, was noted for the honesty of his administration.

Among Ecuador's literary figures were Numa Pompilio Llona (1832–1907), a poet-philosopher, and Juan de León Mera (1832–94), a poet and novelist. Outstanding Ecuadorans of the 20th century include the poets Gonzalo Escudero (1903–71), Jorge Carrera Andrade (1903–78), César Dávila Andrade (1918–67), and Benjamín Carrión (1897–1979); the novelist Jorge Icaza (1906–78); the painter Oswaldo Guayasamin Calero (b.1919); José María Velasco Ibarra (1893–1979), who served five times as president of his country; and Galo Plaza Lasso (1906–87), a former president of Ecuador and of the OAS. Mike Judge (b.1962) is an animator, voice actor, writer, and producer for such US television series as Beavis and Butt-head and King of the Hill.

DEPENDENCIES

Ecuador's only territory, administered as a province since 1973, is the Archipelago of Columbus (Archipiélago de Colón), more commonly known as the Galápagos Islands, after the Spanish name for the large land tortoise found there. The six largest islands of the group (with their earlier names in parentheses) are Isabela (Albemarle), Santa Cruz (Indefatigable), Santiago (San Salvador or James), Fernandina (Narborough), Floreana (Santa María or Charles), and San Cristóbal (Chatham). Lying on the equator, this cluster of 60-odd islands is scattered over nearly 60,000 sq km (23,000 sq mi) of ocean and has a total land area of 8,010 sq km (3,093 sq mi). The center of the group lies at about 90°w, some 1,130 km (700 mi) from the coast of Ecuador and about 1,600 km (1,000 mi) southwest of Panama.

Most of the islands are small and barren. The largest, Isabela, which is 121 km (75 mi) long and makes up half the land area of the group, has the highest volcano (now only slightly active), reaching 1,689 m (5,541 ft). The climate of these tropical islands is modified by the cold Humboldt Current, which keeps the mean annual temperature as low as 21°c (70°f). Desertlike low-lying areas contrast with mist-shrouded heights at 240 m (800 ft) and higher elevations that have considerable rainfall.

Charles Darwin visited the islands in 1835 during his voyage on the Beagle, and his observations there made an important contribution to the development of his theories of evolution and natural selection. The unique forms of plant and animal life found on the various islands include 15 species of giant tortoise, considered to be the longest-lived creatures on earth, with a life span of about 150 years and a maximum weight of more than 225 kg (500 lb). In the mid-1980s, their number was estimated at 10,000. The Galápagos have 85 species of birds. In 1959, Ecuador declared the Galápagos a national park to prevent the extinction of the wildlife. The islands have since become one of the world's most noted focal points for naturalist studies and observations. About 21,000 visitors come to the islands each year.

Early Amerindian navigators, traveling on balsa rafts, frequently went to the Galápagos for the excellent fishing, but there is no evidence of any permanent settlement. Bishop Tomás de Berlanga of Panama landed at the Galápagos in 1535; he was the first of a series of Spaniards to visit the islands. In 1832, the first president of Ecuador, Juan José Flores, declared the islands a national territory. Several were used from time to time for penal colonies, but the practice was discontinued in 1959. The administrative seat is San Cristóbal. Only four of the islands are inhabited, and the estimated population numbers 6,000.

BIBLIOGRAPHY

Calvert, Peter. A Political and Economic Dictionary of Latin America. Philadelphia: Routledge/Taylor and Francis, 2004.

Darwin, Charles. Voyage of the Beagle. Garden City, N.Y.: Natural History Press, 1962 (orig. 1840).

Garretón, Manuel Antonio, and Edward Newman, (eds.). Democracy in Latin America: (Re)constructing Political Society. New York: United Nations University Press, 2001.

Gerlach, Allen. Indians, Oil, and Politics: A Recent History of Ecuador. Wilmington, Del.: Scholarly Resources, 2003.

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