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

PROFILE

Official Name:
Republic of Ecuador

Geography
Area: 256,370 sq. km.; about the size of Colorado.Cities: Capital--Quito (pop. 1.5 million).
Other cities--Guayaquil (2.0 million).
Terrain: Jungle east of the Andes, a rich agricultural coastal plain west of the Andes and high-elevation valleys through the mountainous center of the country.
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 (2000 est.): 12,646,095.
Annual growth rate: 1.72%.
Ethnic groups: Indigenous 25%, mestizo (mixed Indian and Spanish) 55%, Caucasian and others 10%, African 10%.
Religion: Predominantly Roman Catholic, 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--90%.
Health: Infant mortality rate--32.2/1,000. Life expectancy--70.8 yrs.
Work force (4.8 million): Agriculture--42%; commerce--20%; services--19%; manufacturing--11%; other--8%.

Government
Type: Republic.
Constitution: August 11, 1998.
Independence: May 24, 1822 (from Spain).
Branches: Executive--president and 14 cabinet ministers. Legislative--123-member unicameral Congress. Judicial--Supreme Court, Provincial Courts, and ordinary civil and criminal judges.
Administrative subdivisions: 22 provinces.
Political parties: 11 political parties; none predominates.
Suffrage: Obligatory for literate citizens 18-65 yrs. of age; optional for other eligible voters; active duty military personnel may not vote.

Flag:Ecuador flag

Economy
GDP (2000): $13.9 billion.
Real annual growth rate: 1996, 2.0%; 1997, 3.4%; 1998, 0.4%; 1999, -7.3%; 2000, 1.9%.
Per capita GDP: $1,100.
Natural resources: Petroleum, fish, shrimp, timber, gold.
Agriculture (10.5% of GDP): Products--Bananas, seafood, coffee, cacao, sugar, rice, corn, and livestock.
Industry (19.0% of GDP--oil and mining 17.4%): Types--Petroleum extraction, food processing, wood products, textiles, chemicals, and pharmaceuticals.
Trade: Exports--$4,845 million: petroleum , bananas, shrimp, coffee, cacao, hemp, wood, fish, cut flowers. Major markets--U.S. 38%, Latin America 32%, European Union (EU) 12%, and Asia 12%. Imports--$3,465 million: industrial materials, nondurable consumer goods, agricultural products, Major suppliers--Latin America 46%, U.S.26%, EU 12%, and Asia 11%.

Note: Central Bank of Ecuador official data

PEOPLE
Ecuador's population is ethnically mixed. The largest ethnic groups are indigenous and mestizo (mixed Indian-Caucasian). 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 about 55%. The tropical forest region to the east of the mountains remains sparsely populated and contains only about 3% of the population.

The public education system is tuition-free, and attendance is mandatory from ages 6 to 14. In practice, however, many children drop out before age 15, and, in rural areas only about one-third complete sixth grade. The government is striving to create better programs for the rural and urban poor, especially in technical and occupational training. In recent years, it also has been successful in reducing illiteracy. Enrollment in primary schools has been increasing at an annual rate of 4.4%--faster than the population growth rate. According to the 1979 constitution, the central government must allocate at least 30% of its revenue to education; in practice, however, it allots a much smaller percentage. Public universities have an open admissions policy. In recent years, however, large increases in the student population, budget difficulties, and extreme politicization of the university system have led to a decline in academic standards.

HISTORY
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.

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 previously had claimed in the Amazon. 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.

Recession and popular unrest led to a return to populist politics and domestic military interventions in the 1960s, while foreign companies developed oil resources in the Ecuadorian Amazon. In 1972, a nationalist military regime seized power and used the new oil wealth and foreign borrowing to pay for a program of industrialization, land reform, and subsidies for urban consumers. With the oil boom fading, Ecuador returned to democracy in 1979, but by 1982, the government faced a chronic economic crisis, including inflation, budget deficits, a falling currency, mounting debt service, and uncompetitive industries.

The 1984 presidential elections were narrowly won by Leon Febres-Cordero of the Social Christian Party (PSC). During the first years of his administration, Febres-Cordero introduced free-market economic policies, took strong stands against drug trafficking and terrorism, and pursued close relations with the United States. His tenure was marred by bitter wrangling with other branches of government and his own brief kidnapping by elements of the military. A devastating earthquake in March 1987 interrupted oil exports and worsened the country's economic problems.

Rodrigo Borja of the Democratic Left (ID) party won the presidency in 1988. His government was committed to improving human rights protection and carried out some reforms, notably an opening of Ecuador to foreign trade. The Borja government concluded an accord leading to the disbanding of the small terrorist group, "Alfaro Lives." However, continuing economic problems undermined the popularity of the ID, and opposition parties gained control of Congress in 1990.

In 1992, Sixto Duran-Ballen won in his third run for the presidency. His government's popularity suffered from tough macroeconomic adjustment measures, but it succeeded in pushing a limited number of modernization initiatives through Congress. Duran-Ballen's vice president, Alberto Dahik, was the architect of the administration's economic policies, but in 1995, Dahik fled the country to avoid prosecution on corruption charges following a heated political battle with the opposition. A war with Peru erupted in January-February 1995 in a small, remote region where the boundary prescribed by the 1942 Rio Protocol was in dispute.

Abdala Bucaram, from the Guayaquil-based Ecuadorian Roldosista Party (PRE), won the presidency in 1996 on a platform that promised populist economic and social reforms and the breaking of what Bucaram termed as the power of the nation's oligarchy. During his short term of office, Bucaram's administration drew criticism for corruption. Bucaram was deposed by the Congress in February 1997 on grounds of alleged mental incompetence. In his place, Congress named interim President Fabian Alarcon, who had been President of Congress and head of the small Radical Alfarist Front party. Alarcon's interim presidency was endorsed by a May 1997 popular referendum.

Congressional and first-round presidential elections were held on May 31, 1998. No presidential candidate obtained a majority, so a run-off election between the top two candidates--Quito Mayor Jamil Mahuad of the Popular Democracy party and Social Christian Alvaro Noboa--was held on July 12, 1998. Mahuad won by a narrow margin. He took office on August 10, 1998. On the same day, Ecuador's new constitution came into effect.

Mahuad concluded a well-received peace 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 was obliged to flee the presidential palace for his own safety. Vice President Gustavo Noboa took charge; Mahuad went on national television in the morning 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 in constitutional succession to Mahuad.

GOVERNMENT
The constitution provides for concurrent 4-year terms of office for the president, vice president, and members of Congress. Presidents may be re-elected after an intervening term, while legislators may be re-elected immediately.

The executive branch includes 15 ministries. Provincial governors and councilors, like mayors and aldermen and parrish boards, are directly elected. Each 2 years, legislators are elected from the majority party. Congress meets throughout the year except for recess in July and December. There are twenty 7-member congressional committees. Justices of the Supreme Court are appointed by the Congress for indefinite terms.

Principal Government Officials
Executive Branch
Chief of State
President--Gustavo Noboa Bejarano
Vice President--Pedro Pinto Rubianes
Minister of Foreign Affairs--Heinz Moeller
Ambassador, Embassy of Ecuador in Washington--Ivonne A-Baki
Ambassador to the UN—Mario Aleman
Ambassador to the OAS—Blasco Penaherrera

Ecuador maintains an embassy in the United States at 2535 - 15th Street NW,
Washington, DC 20009 (tel. 202-234-7200) and consulates in Chicago, Dallas, Houston,
Los Angeles, Miami, New Orleans, New York, and San Francisco.

Legislative Branch

Unicameral National Congress or Congreso Nacional (123 seats; 20 members popularly
elected at large nationally, 103 members popularly elected by province.)

POLITICAL CONDITIONS
Ecuador's political parties have historically been small, loose organizations that depended more on populist, often charismatic, leaders to retain support than on programs or ideology. Frequent internal splits have produced extreme factionalism. However, a pattern has emerged in which administrations from the center-left alternate with those from the center-right. Although Ecuador's political elite is highly factionalized along regional, ideological, and personal lines, a strong 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 and to remove cabinet ministers.

Constitutional changes enacted by a specially elected National Constitutional Assembly in 1998 took effect on August 10, 1998. The new constitution strengthens the executive branch by eliminating mid-term congressional elections and by circumscribing Congress' power to challenge cabinet ministers. Party discipline is traditionally weak, and routinely many deputies switch allegiance during each Congress. However, after the new Constitution took effect, the Congress passed a code of ethics which imposes penalties on members who defy their party leadership on key votes.

Beginning with the 1996 election, the indigenous population abandoned its traditional policy of shunning the official political system and participated actively. The indigenous population has established itself as a significant force in Ecuadorian politics, as shown by the selection of indigenous representative Nina Pacari, who led the indigenous political party, Pachakutik, as second vice president of the 1998 Congress. The next presidential and congressional elections are currently scheduled for 2002.

ECONOMYSunset on the coast at Crucita, Ecuador; photo by Jeff Pugh
The Ecuadorian economy is based on petroleum production and exports of bananas, shrimp and other primary agricultural products. Industry is largely oriented to servicing the domestic market. Deteriorating economic performance in 1997-98 culminated in a severe economic and financial crisis in 1999. The crisis was precipitated by a number of external shocks, including the El Nino weather phenomenon in 1997, a sharp drop in global oil prices in 1997-98, and international emerging market instability in 1997-98. These factors highlighted the Government of Ecuador's unsustainable economic policy mix of large fiscal deficits and expansionary money policy and resulted in an 7.3% contraction of GDP, annual year-on-year inflation of 52.2% and a 65% devaluation of the national currency in 1999.

On January 9, 2000, the administration of President Jamil Mahuad announced its intention to adopt the U.S. dollar as the official currency of Ecuador to address the ongoing economic crisis. Subsequent protest led to the removal of Mahuad from office and the elevation of Vice President Gustavo Noboa to the presidency.

The Noboa government confirmed its commitment to dollarize as the centerpiece of its economic recovery strategy. The government also entered into negotiations with the International Monetary Fund (IMF), culminating in the negotiation of a 12-month stand-by arrangement with the Fund. Additional policy initiatives include efforts to reduce the government's fiscal deficit, implement structural reforms to strengthen the banking system and regain access to private capital markets. Buoyed by high oil prices, the Ecuadorian economy experienced a modest recovery in 2000, with GDP rising 1.9%. However, 70% of the population lives below the poverty line, more than double the rate of 5 years ago. Inflation in 2000 remained high at 96.1%, but the rate of inflation continues to fall. Monthly inflation in February 2001 was 2.9%.

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) and the Organization of American States and also is a member of many regional groups, including the Rio Group, the Latin American Economic System, the Latin American Energy Organization, the Latin American Integration Association, and the Andean Pact.

Ecuador's border dispute with Peru, festering since the independence era, has been the nation's principal foreign policy issue. For more than 50 years, Ecuador maintained that the 1942 Rio Protocol of Peace, Friendship and Boundaries left several issues unresolved. For example, it asserted that geographic features in the area of the Cenepa River valley did not match the topographical descriptions in the Protocol, thus making demarcation of the boundary there "inexecutable."

This long-running border dispute occasionally erupted into armed hostility along the undemarcated sections. The most serious conflict since the 1941 war occurred in January-February 1995, when thousands of soldiers from both sides fought an intense but localized war in the disputed territory in the upper Cenepa valley. A peace agreement brokered by the four Guarantors of the Rio Protocol (Argentina, Brazil, Chile, and the United States) in February 1995 led to the cessation of hostilities and the establishment of the Military Observers Mission to Ecuador-Peru (MOMEP) to monitor the zone. In 1996, Ecuador and Peru began a series of meetings intended to set the stage for substantive negotiations to resolve the dispute.

Those talks were successful. In January 1998, Ecuador and Peru initialed a historic agreement in Rio de Janeiro, Brazil, which provided a framework to resolve the major outstanding issues between the two countries through four commissions. The commissions were to prepare a Treaty of Commerce and Navigation and a Comprehensive Agreement on Border Integration, to fix on the ground the common land boundary, and to establish a Binational Commission on Mutual Confidence Measures and Security. The commissions began work in February, with the intention of reaching a definitive agreement by May 30, 1998. The commissions on border integration and mutual confidence measures successfully concluded their work, and the commission working on a treaty of commerce and navigation produced a draft treaty text, but the commission on border demarcation failed to produce agreement by May 30. A flare-up in military tensions in the disputed region in August 1998 led to the creation of a temporary second MOMEP-patrolled demilitarized zone just south of the first demilitarized zone.

Presidents Mahuad and Fujimori established direct communication by meetings and phone calls in an effort to overcome the two countries' remaining differences. In October 1998, after asking for and receiving a boundary determination from the guarantors, the two presidents reached agreement. On October 26, 1998, at a ceremony in Brasilia, Presidents Fujimori and Mahuad and their foreign ministers signed a comprehensive settlement.

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 150,000-200,000 Ecuadorians living in the United States and by 24,000 U.S. citizens visiting Ecuador annually, and by approximately 15,000 U.S. citizens residing in Ecuador. The United States assists Ecuador's economic development directly through the Agency for International Development (USAID) program in Ecuador and through multilateral organizations such as the Inter-American Development Bank and the World Bank. In addition, the U.S. Peace Corps operates a sizable program in Ecuador. More than 100 U.S. companies are doing business in Ecuador.

Both nations are signatories of the Rio Treaty of 1947, the Western Hemisphere's regional mutual security treaty. Ecuador shares U.S. concern over increasing narcotrafficking and international terrorism and has energetically condemned terrorist actions, whether directed against government officials or private citizens. 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.

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. In fisheries issues, the United States claims jurisdiction for the management of coastal fisheries up to 320 kilometers (200 mi.) from its coast, but excludes highly migratory species; Ecuador, on the other hand, claims a 320-kilometer-wide (200-mi.) territorial sea, and imposes license fees and fines on foreign fishing vessels in the area, making no exceptions for catches of migratory species. In the early 1970s, Ecuador seized about 100 foreign-flag vessels (many of them U.S.) and collected fees and fines of more than $6 million. After a drop-off in such seizures for some years, several U.S. tuna boats were again detained and seized in 1980 and 1981.

The U.S. Magnuson Fishery Conservation and Management Act then triggered an automatic prohibition of U.S. imports of tuna products from Ecuador. The prohibition was lifted in 1983, and although fundamental differences between U.S. and Ecuadorian legislation still exist, there is no current conflict. During the period that has elapsed since seizures which triggered the tuna import ban, successive Ecuadorian governments have declared their willingness to explore possible solutions to this problem with mutual respect for longstanding positions and principles of both sides.

Principal U.S. Embassy Officials
Ambassador-Designate--Gwen C. Clare
Deputy Chief of Mission--Larry Palmer
Political and Labor--Stuart Symington
Economic--Thomas P. Kelly
Commercial--Robert Jones
Consular--Suzanne Payne
Administrative--Christopher L. Stillman
Public Affairs Adviser--James Moore
Regional Security Officer--Barry M. Moore
USAID--Hilda Arellano
Defense Attache--Col. Martin Reyes, USA
MilGroup--Col. Joseph Contarino, USA
Peace Corps--Marcy Kelley
Agriculture--Larry Fuell (resident in Lima)
Narcotics Assistance Staff--Joel Cassman
INS--Charles Aycock

Guayaquil
Consul General--Michael Glover
Chief, Consular Section--Steven Hardesty

The U.S. Embassy in Ecuador is located at Avenida Patria 120, Quito (tel. (593)(2) 562-890/561-634). Embassy Internet Home Page: http://www.usis.org.ec. The Consulate General is at 9 de Octubre and Garcia Moreno, Guayaquil (tel. (593)(4) 323-570).

Other Contact Information
U.S. Department of Commerce
International Trade Administration
Trade Information Center
14th and Constitution Avenue, NW
Washington, DC 20230
Tel: 1-800-USA-TRADE
Internet: http://www.ita.doc.gov

Ecuadorian-American Chamber of Commerce -- Quito
Edificio Multicentro, 4 Piso
La Nina y Avenida 6 de Diciembre
Quito, Ecuador
Tel: (5932) 507-450
Fax: (5932) 504-571
E-Mail: CCEA1@ACCEA.ORG.EC or CCEA2@ACCEA.ORG.EC
(Branches: Ambato, Cuenca & Manta)

Ecuadorian-American Chamber of Commerce - Guayaquil
G. Cordova 812, Piso 3, Oficina 1
Edificio Torres de la Merced
Guayaquil, Ecuador
Tel: (5934) 566-481 or 565-761
Fax: (5934) 563-259
E-Mail: caecam1@caecam.org.ec
(Branch: Manchala)

[This is a mobile copy of Ecuador (04/01)]