For the most current version of this Note, see Background Notes A-Z.

Flag of Ecuador is three horizontal bands of yellow - at top, double width - blue, and red with the coat of arms superimposed at center of flag.

PROFILE

OFFICIAL NAME:
Republic of Ecuador

Geography
Area: 276,840 sq. km; about the size of Colorado.
Cities: Capital--Quito (pop. 2 million). Other major cities--Guayaquil (2.28 million).
Terrain: Jungle east of the Andes, a rich agricultural coastal plain west of the Andes, high-elevation valleys through the mountainous center of the country and an archipelago of volcanic islands in the Pacific Ocean.
Climate: Varied, mild year-round in the mountain valleys; hot and humid in coastal and Amazonian jungle lowlands.

People
Nationality: Noun and adjective--Ecuadorian(s).
Population (July 2007 est.): 13,755,680.
Annual population growth rate (July 2007 est.): 1.55%.
Ethnic groups: Indigenous 6.8%, mestizo (mixed Indian and Spanish) 77.4%, Caucasian and others 10.8%, African 4.9%.
Religion: Predominantly Roman Catholic (95%), but religious freedom recognized.
Languages: Spanish (official), indigenous languages, especially Quichua, the Ecuadorian dialect of Quechua.
Education: Years compulsory--ages 6-14, but enforcement varies. Attendance (through 6th grade)--76% urban, 33% rural. Literacy--92%.
Health: Infant mortality rate--22.1/1,000. Life expectancy--76.62 yrs.

Government
Type: Republic.
Independence: May 24, 1822 (from Spain).
Constitution: August 10, 1998.
Branches: Executive--President and 28 cabinet ministers. Legislative--unicameral Congress. Judicial--Supreme Court, Constitutional Court, Supreme Electoral Tribunal, Provincial Courts, and ordinary civil and criminal judges.
Administrative subdivisions: 22 provinces.
Major political parties: Over a dozen political parties; none predominates, although President Correa's Alianza Pais is ascendant.
Suffrage: Obligatory for literate citizens 18-65 yrs. of age; optional for other eligible voters; active duty military personnel and police may not vote.

Economy
GDP: (2008 est.) $48.5 billion; (2007 preliminary) $44.5 billion; (2006) $41.4 billion.
Real annual growth rate: (2008 est.) 4.25%; (2007 preliminary) 2.65%; (2006) 3.9%.
Per capita GDP: (2007) $3,270; (2006) $3,088.
Natural resources: Petroleum, fish, shrimp, timber, gold.
Agriculture, including seafood (6.7% of GDP in 2007): Products--bananas, seafood, flowers, coffee, cacao, sugar, tropical fruits, palm oil, palm hearts, rice, corn, and livestock.
Industry (9.1% of GDP in 2007; oil and mining 21.9% in 2007): Types--petroleum extraction, food processing, wood products, textiles, chemicals, and pharmaceuticals.
Other major contributors to GDP: Commercial trade (wholesale and retail)--11.8% (2007); transportation--7.45% (2007); construction--8.5% (2007).
Trade: Exports--$12.48 billion (Jan.-Nov. 2007); $12.7 billion (2006). Types--petroleum, bananas, shrimp, coffee, cut flowers cacao, hemp, wood, fish. Major markets (2007)--U.S. 42%, Latin America 26%, Andean Community 20%, European Union (EU) 13%, and Asia 3%. Imports--$11.2 billion (Jan.-Nov. 2007); $11.3 billion (2006). Types--industrial materials, fuels and lubricants, nondurable consumer goods. Major suppliers (Jan.-Nov. 2007)--Latin America 40%, Andean Community 24%, U.S. 21%, Asia 20%, and EU 9%.
Currency: U.S. dollar.

PEOPLE
Ecuador's population is ethnically mixed. A large majority of the population is mestizo (mixed Indian-Caucasian), followed by smaller percentages of indigenous, Afro-Ecuadorian, and European descendent criollos. Although Ecuadorians were heavily concentrated in the mountainous central highland region a few decades ago, today's population is divided about equally between that area and the coastal lowlands. Migration toward cities--particularly larger cities--in all regions has increased the urban population to over 60%. The tropical forest region (or Amazon region) to the east of the mountains remains sparsely populated and contains only about 3% of the population. Due to an economic crisis in the late 1990s, more than 600,000 Ecuadorians emigrated to the U.S. and Europe from 2000 to 2001. According to the 2000 U.S. census there were 323,000 persons who claimed Ecuadorian ancestry. Including undocumented migrants, it is unofficially estimated that there are approximately one million Ecuadorians currently residing in the U.S.

HISTORY, GOVERNMENT, AND POLITICAL CONDITIONS

The Inca Empire and Spanish Conquest
Advanced indigenous cultures flourished in Ecuador long before the area was conquered by the Inca Empire in the 15th century. In 1534, the Spanish arrived and defeated the Inca armies, and Spanish colonists became the new elite. The indigenous population was decimated by disease in the first decades of Spanish rule--a time when the natives also were forced into the "encomienda" labor system for Spanish landlords. In 1563, Quito became the seat of a royal "audiencia" (administrative district) of Spain.

Independence
After independence forces defeated the royalist army in 1822, Ecuador joined Simon Bolivar's Republic of Gran Colombia, only to become a separate republic in 1830. The 19th century was marked by instability, with a rapid succession of rulers. The conservative Gabriel Garcia Moreno unified the country in the 1860s with the support of the Catholic Church. In the late 1800s, world demand for cocoa tied the economy to commodity exports and led to migrations from the highlands to the agricultural frontier on the coast.

A coastal-based liberal revolution in 1895 under Eloy Alfaro reduced the power of the clergy and opened the way for capitalist development. The end of the cocoa boom produced renewed political instability and a military coup in 1925. The 1930s and 1940s were marked by populist politicians, such as five-time President Jose Velasco Ibarra. In January 1942, Ecuador signed the Rio Protocol to end a brief war with Peru the year before. Ecuador agreed to a border that conceded to Peru much territory Ecuador had previously claimed in the Amazon region. After World War II, a recovery in the market for agricultural commodities and the growth of the banana industry helped restore prosperity and political peace. From 1948-60, three presidents--beginning with Galo Plaza--were freely elected and completed their terms. Political turbulence returned in the 1960's, followed by a period of military dictatorship between 1972 and 1979. The 1980's and beginning of the 90's saw a return to democracy, but instability returned by the middle of the decade.

Political Instability (1997-2007)
Abdala Bucaram, from the Guayaquil-based Ecuadorian Roldosista Party (PRE), won the presidency in 1996 on a platform that promised populist economic and social policies, and challenged what Bucaram termed as the power of the nation's oligarchy. During his short term of office, Bucaram's administration was severely criticized for corruption. Bucaram was deposed by the Congress in February 1997 on grounds of alleged mental incompetence. In his place, Congress named Fabian Alarcon interim president. Alarcon's presidency was endorsed by a May 1997 popular referendum.

Quito Mayor Jamil Mahuad of the Popular Democracy party was elected president by a narrow margin In July 1998. Mahuad concluded an historic peace agreement with Peru on October 26, 1998, but increasing economic, fiscal, and financial difficulties drove his popularity steadily lower. On January 21, 2000, during demonstrations in Quito by indigenous groups, the military and police refused to enforce public order. Demonstrators entered the National Assembly building and declared a three-person "junta" in charge of the country. Field-grade military officers declared their support for the concept. During a night of confusion and negotiations, President Mahuad fled the presidential palace. Vice President Gustavo Noboa took charge and Mahuad went on national television to endorse Noboa as his successor. Congress met in emergency session in Guayaquil the same day, January 22, and ratified Noboa as President of the Republic.

Completing Mahuad's term, Noboa restored some stability to Ecuador. He implemented the dollarization of the economy that Mahuad had announced and obtained congressional authorization for the construction of Ecuador's second major oil pipeline, this one financed by a private consortium. Noboa turned over the government on January 15, 2003, to his successor, Lucio Gutierrez, a former army colonel who first came to public attention as a member of the short-lived "junta" of January 21, 2000. Gutierrez' campaign featured an anti-corruption and leftist, populist platform. After taking office, however, Gutierrez adopted relatively conservative fiscal policies and defensive tactics, including replacing the Supreme Court and declaring a state of emergency in the capital to combat mounting opposition. The situation came to a head on April 20, 2005, when political opponents and popular uprisings in Quito prompted Congress to strip Gutierrez of the presidency for allegedly "abandoning his post." When the military withdrew its support, Gutierrez went into temporary exile. Congress declared Vice President Alfredo Palacio the new president. A semblance of stability returned, but the Palacio administration failed to achieve major reforms.

In presidential elections on October 15, 2006, third-time candidate Alvaro Noboa won the first round. However, Rafael Correa, Palacio's former finance minister, running on an anti-establishment reform platform, bested Noboa in the second round presidential runoff on November 26. Election observers characterized the elections as generally free, fair, and transparent. Noboa's National Institutional Renovation and Action Party won the largest bloc in Congress in 2006 elections, followed by Gutierrez's Patriotic Society Party; Correa's Proud and Sovereign Fatherland Alliance movement did not field any congressional candidates. Traditional parties saw their congressional representation cut in half. The new Congress took office January 5, 2007 and Correa was sworn in as President on January 15, 2007. In March, 2007, 57 members of Congress were dismissed on the grounds that they violated campaign laws. Following that, the Congress was largely deadlocked and later effectively replaced by a constituent assembly that was voted into power on September 30, 2007. The assembly, charged with drafting a new constitution, is scheduled to remain in session through mid-2008, and elections for a new Congress and perhaps other offices as well are expected later in 2008.

Government
The 1998 constitution provides for 4-year terms of office for the president, vice president, and members of Congress, although none of the last three democratically-elected presidents finished their terms. Presidents may be re-elected after an intervening term; legislators may be re-elected immediately. The executive branch currently includes 28 ministries, (including coordinating ministries with inter-governmental responsibility) Provincial leaders (called prefects) and councilors, like mayors, city councilors, and rural parish boards, are directly elected. Congress meets throughout the year except for recesses in July and December. Congress is divided into 20 seven-member subject committees. Justices of the Supreme Court are appointed by the Congress for life; members of the Constitutional Court serve four years.

Principal Government Officials
President--Rafael CORREA
Vice President--Lenin MORENO
Minister of Foreign Affairs--Maria Isabel SALVADOR
Minister of Defense--Wellington SANDOVAL
Ambassador to the United States--Luis GALLEGOS Chiriboga
Ambassador to the Organization of American States--Efren A. Cocios
Ambassador to the United Nations--Diego CORDOVEZ Egers

Ecuador maintains an embassy in the United States at 2535 15th Street NW, Washington, DC 20009 (tel. 202-234-7200). Consulates are located in Atlanta, Boston, Chicago, Dallas, Denver, Houston, Jersey City, Los Angeles, Miami, New Orleans, New York, San Francisco, and San Juan, Puerto Rico.

Political Conditions
Ecuador's political parties have historically been small, loose organizations that depend more on populist, often charismatic, leaders to retain support than on programs or ideology. Frequent internal splits have produced great factionalism. No party has won the presidency more than once through elections since the return to civilian government in 1979. Although Ecuador's political elite is highly factionalized along regional, ideological, and personal lines, desire for consensus on major issues often leads to compromise. Opposition forces in Congress are loosely organized, but historically they often unite to block the administration's initiatives.

Beginning with the 1996 election, the indigenous population abandoned its traditional policy of shunning the official political system and participated actively. The indigenous population established itself as a force in Ecuadorian politics, and participated in the Gutierrez administration before joining the opposition. In the 2006 elections, the indigenous movement won six seats in Congress (down from 11 in 2002).

Constitutional changes enacted by a specially elected National Constitutional Assembly in 1998 took effect on August 10, 1998. The new constitution strengthened the executive branch by eliminating mid-term congressional elections and by circumscribing Congress' power to remove cabinet ministers. Party discipline varies, and many congressional deputies switch allegiance during each Congress. On April 15, 2007, 82% of voters approved a referendum to convene a constituent assembly, a centerpiece of President Correa's political reform agenda. The constituent assembly met starting on November 29, 2007, with the intention of drafting a new constitution. This will be Ecuador's seventh such assembly in the past 90 years, and, if successful, will produce Ecuador's 20th constitution since independence.

ECONOMY
The Ecuadorian economy is based on petroleum production, manufacturing primarily for the domestic market, and agricultural production for domestic consumption and export. Principal exports are petroleum, bananas, shrimp, flowers, and other primary agricultural products. In 2006, oil accounted for 59% of total export earnings. Ecuador is the world's largest exporter of bananas and plantains (about $1.2 billion in 2006) and a major exporter of shrimp ($588 million in 2006). Exports of nontraditional products such as flowers ($436 million in 2006, a three-fold increase in 10 years) and canned fish ($575 million in 2006) have grown in recent years.

Ecuador's economic performance has been solid since it adopted the dollar as its national currency in 2000, following a major banking crisis and recession in 1999. Since 2000, growth has averaged 4.6% per year, supported by the stability brought by dollarization, high oil prices, strong domestic consumer demand, increased non-traditional exports, and growing remittances ($3 billion a year) from Ecuadorians living abroad. In 2007, economic growth slowed to an estimated 2.65%, while inflation was 3.32% and petroleum and non-petroleum exports expanded. Growth was constrained in 2007 by declining petroleum production and reduced private sector investment. Per capita income has increased from $1,296 in 2000 to an estimated $3,270 in 2007, while the poverty rate fell from 51% in 2000 to 38% in 2006.

Ecuador did not improve its overall competitiveness during this period of economic and export growth. In 2007, it slipped five positions in the World Bank's Doing Business Index (from 123 to 128) and also slipped in the World Economic Forum's Competitiveness Index (from 94 to 103), as other nations moved more aggressively to adapt to globalization.

Though Ecuador has a relative abundance of oil reserves, it has been unable to take full advantage of those resources for its own development. Mismanagement, lack of investment, and corruption in the state-owned oil sector have caused declines in state oil production over the last decade. Overall oil production increased during that period because of growing production by private sector companies, but in 2007 production by the state oil company fell, while that by private sector companies was flat. Commercial disputes as well as judicial and contractual uncertainties have deterred private oil and other companies from investing in the country. The electricity and telecommunications sectors also have similar significant problems. Ecuador was in the final stages of negotiating a free trade agreement (FTA) with the United States, but that progress stalled with an April 2006 hydrocarbons law mandating revisions in contract terms, and the May 2006 seizure of the assets of Occidental Petroleum, at the time the country's largest U.S. investor. Resolution of the Occidental situation is currently pending international arbitration under the terms of the bilateral investment treaty.

President Correa has announced his opposition to resumption of FTA talks with the U.S., citing concerns that Ecuador is not yet sufficiently competitive, especially in sensitive agriculture sectors. Prior to taking office, he said that the Government of Ecuador would only service its external debt obligations after funding domestic social priorities; as of January 2008, the government had met its external debt obligations. In October 2007 the Correa administration decreed that many foreign oil companies operating in Ecuador pay 99% of extraordinary income to the government. The government increased income transfers to the poor and has increased spending on health, education, and basic infrastructure.

FOREIGN RELATIONS
Ecuador always has placed great emphasis on multilateral approaches to international problems. Ecuador is a member of the United Nations (and most of its specialized agencies), the Organization of American States (OAS), and many regional groups, including the Rio Group, the Latin American Economic System, the Latin American Energy Organization, the Latin American Integration Association, and the Community of Andean Nations.

In October 1998, Ecuador and Peru reached a peace agreement to settle their border differences, which had festered since the signing of the 1942 Rio Protocol. This long-running border dispute occasionally erupted into armed hostility along the undemarcated sections, with the last conflict occurring in 1995. The U.S. Government, as one of the four guarantor nations (the others are Argentina, Brazil and Chile), played an important role in bringing the conflict to an end. The peace agreement brokered by the four guarantors in February 1995 led to the cessation of hostilities and a Military Observers Mission to Ecuador-Peru (MOMEP) which monitored the zone. In addition to helping broker the peace accord, the U.S. has been active in demining the former area of conflict and supporting welfare and economic projects in the border area.

The ongoing conflict in Colombia and security along the 450-mile-long northern border are important issues in Ecuador's foreign relations with Colombia. The instability of border areas and frequent encroachments of Colombian guerillas into Ecuadorian territory has led the Ecuadorian army to deploy more troops to the region. Although Ecuadorian officials have stated that Colombian guerrilla activity will not be tolerated on the Ecuadorian side of the border, guerrilla bands have been known to intimidate the local population, demanding extortion payments and practicing vigilante justice. The Correa administration is pursuing a policy known as Plan Ecuador to develop the northern border region and protect citizens from the drug threat.

U.S.-ECUADORIAN RELATIONS
The United States and Ecuador have maintained close ties based on mutual interests in maintaining democratic institutions; combating narcotrafficking; building trade, investment, and financial ties; cooperating in fostering Ecuador's economic development; and participating in inter-American organizations. Ties are further strengthened by the presence of an estimated two million Ecuadorians living in the United States, by 150,000 U.S. citizens visiting Ecuador annually, and by approximately 20,000 U.S. citizens residing in Ecuador. More than 100 U.S. companies are doing business in Ecuador.

The United States assists Ecuador's economic development directly through the Agency for International Development (USAID) and through multilateral organizations such as the Inter-American Development Bank and the World Bank. In addition, the U.S. Peace Corps and the State Department's Narcotic Affairs Section operate sizable programs in Ecuador. Total U.S. assistance to Ecuador amounted to over $34 million in FY 2007.

The United States is Ecuador's principal trading partner. In 2006, Ecuador exported about $6.8 billion in products to the U.S. For over 10 years Ecuador has benefited from duty-free entry for certain of its exports under the Andean Trade Preferences Act (ATPA) and received additional trade benefits under the Andean Trade Promotion and Drug Eradication Act (ATPDEA) in 2002. The U.S. Congress approved an eight-month extension of those benefits, now set to expire on February 29, 2008. In May 2004 Ecuador entered into negotiations for an Andean free trade agreement with the U.S., Colombia, and Peru, but negotiations between the U.S. and Ecuador have not resumed since the Government of Ecuador announced controversial reforms to hydrocarbons legislation in April 2006.

Both nations are signatories of the Rio Treaty of 1947, the Western Hemisphere's regional mutual security treaty. Although there are problems with money laundering, border controls, and illegal immigration, Ecuador shares U.S. concerns over narcotrafficking and international terrorism, and has energetically condemned terrorist actions. The government has maintained Ecuador virtually free of coca production since the mid-1980s, and is working to combat money laundering and the transshipment of drugs and chemicals essential to the processing of cocaine (with U.S. support). It has recently given greater priority to combating child labor and trafficking in persons.

Ecuador and the U.S. agreed in 1999 to a 10-year arrangement whereby U.S. military surveillance aircraft could use the airbase at Manta, Ecuador as a Forward Operating Location to detect drug trafficking flights through the region. President Correa has stated that he will not to renew the lease for the Forward Operating Location.

Ecuador claims a 320-kilometer-wide (200-mi.) territorial sea. The United States, in contrast, claims a 12-mile boundary and jurisdiction for the management of coastal fisheries up to 320 kilometers (200 mi.) from its coast, but excludes highly migratory species. Although successive Ecuadorian governments have declared a willingness to explore possible solutions to this issue, the U.S and Ecuador have yet to resolve fundamental differences concerning the recognition of territorial waters.

Principal U.S. Embassy Officials
Ambassador--Linda Jewell
Deputy Chief of Mission--Jefferson Brown
Political Section Chief--Nan Fife
Economic Counselor--David Edwards
Consul General--Elizabeth Jordan
Commercial Attaché--Bryan Smith
Management Counselor--Michael St. Clair
Public Affairs Officer--Michael Greenwald
Regional Security Officer--Martin J. Rath
USAID Director--Alexandria Panehal
Narcotics Affairs Section Director--John Haynes

Guayaquil Consulate
Consul General--Douglas Griffiths
Chief, Consular Section--Greg Chapman

U.S. Embassy
Avenida Patria 120
Quito, Ecuador
(tel. (593)(2) 256-2890/256-1634)
The mailing address is APO AA 34039

U.S. Consulate
9 de Octubre and Garcia Moreno
Guayaquil, Ecuador
(tel. (593)(4) 232-3570)

Consular Agent for the Galapagos
Puerto Ayora
(tel. (593) (5) 526-330 or (593) (5) 526-296)

Other Contact Information
U.S. Department of State
2201 C Street, NW
Washington, DC 20520
Main Switchboard: (202)-647-4000 (http://www.state.gov)

U.S. Department of Commerce, Trade Information Center, International Trade Administration
1401 Constitution Avenue
Washington, DC 20230
(tel: 800-USA-TRADE, Internet: http://trade.gov)

Ecuadorian-American Chamber of Commerce--Quito
Edificio Multicentro, 4 Piso
La Nina y Avenida 6 de Diciembre
Quito, Ecuador
Tel: (593) (2) 250-7450
Fax: (593) (2) 250-4571
E-mail: info@ecamcham.com
Website: www.ecamcham.com (Spanish)
www.ecamcham.com/default_en.htm (English)
(Branches: Ambato, Cuenca and Manta)

Ecuadorian-American Chamber of Commerce--Guayaquil
Av. Francisco de Orellanda y Alberto Borges
Edificio Centrum, Piso 6, Oficina 5
Tel: 593-(4)-269-3470 or 593-4-269-3471
Fax: 593-(4)-269-3465
Email: infocenter@amchamecuador.org
Website: www.amchamecuador.org (Spanish)
(Branch: Manchala)

[This is a mobile copy of Ecuador (01/08)]