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COUNTRY PROFILE Ecuador This Country Profile is a reference tool, which provides analysis of historical political, infrastructural and economic trends. It is revised and updated annually. The EIU’s quarterly Country Reports analyse current trends and provide a two-year forecast The full publishing schedule for Country Profiles is now available on our web site at http://www.eiu.com/schedule. 1999-2000 The Economist Intelligence Unit 15 Regent St, London SW1Y 4LR United Kingdom The Economist Intelligence Unit The Economist Intelligence Unit is a specialist publisher serving companies establishing and managing operations across national borders. For over 50 years it has been a source of information on business developments, economic and political trends, government regulations and corporate practice worldwide. The EIU delivers its information in four ways: through subscription products ranging from newsletters to annual reference works; through specific research reports, whether for general release or for particular clients; through electronic publishing; and by organising conferences and roundtables. The firm is a member of The Economist Group. London New York Hong Kong The Economist Intelligence Unit The Economist Intelligence Unit The Economist Intelligence Unit 15 Regent St The Economist Building 25/F, Dah Sing Financial Centre London 111 West 57th Street 108 Gloucester Road SW1Y 4LR New York Wanchai United Kingdom NY 10019, US Hong Kong Tel: (44.20) 7830 1000 Tel: (1.212) 554 0600 Tel: (852) 2802 7288 Fax: (44.20) 7499 9767 Fax: (1.212) 586 1181/2 Fax: (852) 2802 7638 E-mail: [email protected] E-mail: [email protected] E-mail: [email protected] Website: http://www.eiu.com Electronic delivery EIU Electronic New York: Lou Celi or Lisa Hennessey Tel: (1.212) 554 0600 Fax: (1.212) 586 0248 London: Jeremy Eagle Tel: (44.20) 7830 1183 Fax: (44.20) 7830 1023 This publication is available on the following electronic and other media: Online databases NewsEdge Corporation (US) Microfilm FT Profile (UK) Tel: (1.718) 229 3000 World Microfilms Publications Tel: (44.20) 7825 8000 (UK) DIALOG (US) CD-ROM Tel: (44.20) 7266 2202 Tel: (1.415) 254 7000 The Dialog Corporation (US) LEXIS-NEXIS (US) SilverPlatter (US) Tel: (1.800) 227 4908 M.A.I.D/Profound (UK) Tel: (44.20) 7930 6900 Copyright © 1999 The Economist Intelligence Unit Limited. All rights reserved. Neither this publication nor any part of it may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, without the prior permission of The Economist Intelligence Unit Limited. All information in this report is verified to the best of the author's and the publisher's ability. However, the EIU does not accept responsibility for any loss arising from reliance on it. ISSN 0269-7971 Symbols for tables “n/a” means not available; “–” means not applicable Printed and distributed by Redhouse Press Ltd, Unit 151, Dartford Trade Park, Dartford, Kent DA1 1QB, UK Comparative economic indicators, 1998 EIU Country Profile 1999-2000 © The Economist Intelligence Unit Limited 1999 Ecuador 3 November 5th 1999 Contents 5 Basic data 6 Political background 6 Historical background 10 Constitution and institutions 11 Political forces 14 International relations and defence 14 Resources and infrastructure 14 Population 16 Education 17 Health 17 Natural resources and the environment 18 Transport and communications 20 Energy provision 22 The economy 22 Economic structure 22 Economic policy 25 Economic performance 28 Regional trends 28 Economic sectors 28 Agriculture, forestry and fishing 30 Mining and semi-processing 31 Manufacturing 32 Construction 32 Financial services 34 Other services 35 The external sector 35 Trade in goods 37 Invisibles and the current account 38 Capital flows and foreign debt 40 Foreign reserves and the exchange rate 42 Appendices 42 Sources of information 43 Reference tables 43 Population 43 Labour force 43 Transport statistics 44 Non-financial public-sector finances 44 Money supply 44 Interest rates © The Economist Intelligence Unit Limited 1999 EIU Country Profile 1999-2000 4 Ecuador 45 Gross domestic product 45 Gross domestic product by expenditure 46 Gross domestic product by sector 46 Prices and earnings 47 Agricultural gross domestic product 47 Agricultural production 47 Manufacturing gross domestic product 48 Construction statistics 48 Deposit money banks 49 Exports 49 Imports 49 Main trading partners 50 Balance of payments, IMF series 50 Balance of payments, national estimates 51 External debt, World Bank series 51 External debt, national estimates 52 Foreign reserves 52 Exchange rates EIU Country Profile 1999-2000 © The Economist Intelligence Unit Limited 1999 Ecuador 5 Ecuador Basic data Land area 276,840 sq km Population 11.5m (1998) Main towns Population in ‘000 (1990 census) Guayaquil 1,764 Quito (capital) 1,282 Cuenca 227 Machala 166 Portoviejo 164 Esmeraldas 136 Climate Tropical on the coast and in the eastern region. Temperate in the central mountain zone Weather in Quito Annual average temperature, 16°C; hottest months, December and January, (altitude 2,879 metres) 8-22°C (average daily minimum and maximum); coldest months, April and May, 8-21°C; driest month, July, 20 mm average rainfall; wettest month, April, 175 mm average rainfall Languages Spanish (official); Indian languages, particularly Quechua, are also used Measures Metric system; also local units including: 1 vara=84 centimetres=33.1 inches Currency 1 sucre (Su)=100 centavos. Average exchange rate in 1998: Su5,447:$1; exchange rate on October 1st 1999: Su12,850:$1 Time 5 hours behind GMT Public holidays New Year’s Day (January 1st), Epiphany, Carnival (February), Maundy Thursday, Good Friday, Easter Saturday, Labour Day (May 1st), Battle of Pichincha (Quito only, May 24th), St Peter and St Paul (June 29th), Bolívar’s birthday (July 24th), Founding of Guayaquil (Guayaquil only, July 25th), Independence of Quito (August 10th), Independence of Guayaquil (Guayaquil only, October 9th), Discovery of America (October 12th), All Saints’ Day, All Souls’ Day, Independence of Cuenca (Cuenca only, (November 3rd), Foundation of Quito (Quito only, December 6th), Christmas Day © The Economist Intelligence Unit Limited 1999 EIU Country Profile 1999-2000 6 Ecuador Political background Jamil Mahuad assumed the presidency on August 10th 1998 after narrowly defeating his main opponent in a second-round election. His party, the centrist Democracia Popular (DP), is the largest in the unicameral Congress, but does not have an overall majority. The next presidential election is due in 2002. Historical background Independence— Prior to the arrival of the Spanish in 1531, the territory that is now Ecuador was dominated by regional trading confederacies. For 80 years it was the northern outpost of the Inca empire, which introduced the Quechua language. The country gained independence from Spain in 1822 and temporarily joined Venezuela, Colombia and Panama in Simón Bolívar’s Grancolombian Federation. In 1830 it left to become an independent nation. —leads to political The period after independence was characterised by government instability instability and economic and political rivalry between the coastal and highland regions. Political power was concentrated in the hands of a highland land-owning class allied with the Catholic Church, yet the growth of the banking sector and a rapid expansion in cocoa production created a wealthy coastal banking and agricultural middle class seeking greater political power. State power remained decentralised at a regional level until Gabriel García Moreno came to power in 1860 and attempted to centralise public administration and tax collection. External shocks, in the shape of a collapse in the cocoa market in the 1920s and the Great Depression of the 1930s, were at the root of severe instability from 1931 to 1948. Of 21 governments, none survived to complete a full term in office. José María Velasco Ibarra was a particularly important figure during this period. A populist who was first elected in 1933, he was to hold office a total of five times (the last time in 1968-72), and was overthrown four times. From 1948 to 1960, however, Ecuador enjoyed 12 years of stable civilian rule. Increasing banana exports helped to finance development policies, and also shaped the emergence of growers as a powerful economic group. Modernisation and the A move towards industrial development took place in the 1960s. The influence military of the Cuban revolution contributed to growing social unrest, leading the military government of 1963-66 to take a strongly anti-Communist stance. Great emphasis was placed on economic modernisation, and the role of the state in the economy was expanded. Another military dictatorship from 1972 began the exploitation of the extensive oil reserves discovered in the late 1960s. The oil boom was accompanied by the accumulation of high levels of indebtedness to foreign banks as governments used the creditworthiness conferred by oil to contract loans to finance a programme of state-led indus- trialisation. In 1978 a referendum approved a new constitution which was to form the basis for a return to democratic elections and civilian rule in 1979. EIU Country Profile 1999-2000 © The Economist Intelligence Unit Limited 1999 Ecuador 7 Democratic governments Jaime Roldós of the populist Concentración de Fuerzas Populares (CFP) was face economic crisis— elected president in the 1979 polls. The past two decades have been characterised by—mostly failed—attempts at reform as successive governments have struggled to forge consensus behind economic policy in Ecuador’s polarised and fragmented political environment. Mr Roldós was killed in a plane crash in 1981, giving him the status of political martyr even though his reformist intentions had been undermined by conflict within his government. Mr Roldós was succeeded by his more moderate vice-president, Osvaldo Hurtado of the centrist Quito-based Democracia Popular (DP). Mr Hurtado was able to provide more organised government but faced economic difficulties.
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