U.S. Department of State
Background Notes: Ecuador, February 1998
Released by the Bureau of Inter-American Affairs

OFFICIAL NAME: Republic of Ecuador



Area: 283,560 sq. km.; about the size of Colorado.
Cities: Capital--Quito (pop. 1.5 million). Other cities--Guayaquil (2.0 
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.


Nationality: Noun and adjective--Ecuadoran(s).
Population (July 1997 est.): 12.1 million.
Annual growth rate: 1.93%.
Ethnic groups: Indigenous 25%, mestizo (mixed indigenous--Caucasian) 
65%, Caucasian and others 7%, African 3%.
Religion: Predominantly Roman Catholic, but religious freedom 
Languages: Spanish (official), indigenous languages, especially Quichua, 
the Ecuadoran 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--33.4/1,000. Life expectancy--71.4 yrs. 
Work force (4.8 million): Agriculture--42%. Commerce--20%. Services--
19%. Manufacturing--11%. Other--8%.


Type: Republic.
Constitution: 1979.
Independence: May 24, 1822 (from Spain).
Branches: Executive--president and 14 cabinet ministers. Legislative--
82-member unicameral Congress. Judicial--Supreme Court, Provincial 
Courts, and ordinary civil and criminal judges. 
Administrative subdivisions: 22 provinces.
Political parties: 13 legal 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.

Economy (1996)

GDP: $18.0 billion.
Real annual growth rate: 1994, 4.3%; 1995, 2.3%; 1996, 2.0%.
Per capita GDP: $1,534.
Natural resources: petroleum, fish, shrimp, timber, gold, limestone. 
Agriculture (13% of GDP): bananas, seafood, coffee, cacao, sugar, rice, 
corn, and livestock.
Industry (38% of GDP): petroleum extraction, food processing, wood 
products, textiles, chemicals and pharmaceuticals.
Trade: Exports--$4.9 billion: petroleum and petroleum products, bananas, 
shrimp, coffee, flowers, cocoa. Major markets--U.S. 39%, Latin America 
25%, European Union (EU) 22%, and Asia 12%. Imports--$3.5 billion: 
agricultural and industrial machinery, industrial raw materials, 
agricultural commodities, chemical products, transportation and 
communication equipment, petroleum products. Major suppliers--Latin 
America 35%, U.S. 32%, EU 19%, and Asia 11%.


Ecuador's population is ethnically mixed. The largest ethnic groups are 
indigenous and mestizo (mixed Indian-Caucasian). Although Ecuadorans 
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 

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 has also 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--and, during the 1980s, the number of 
university students increased about 18% per year. 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 

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.


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 were also 
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 Ecuadoran 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 kidnaping 
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 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 is 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 was President of Congress and head of the small Radical 
Alfarist Front party. Alarcon's interim presidency was endorsed by a May 
1997 popular referendum. New presidential elections are scheduled for 
May 31, 1998. The elected president is to take office August 10, 1998.


The 1979 constitution provides for concurrent four-year terms of office 
for the president, vice president, and the 12 members of congress (of a 
total of 82) who are elected as "national" (at large) legislators. The 
remaining 70 legislators, representing the country's 22 provinces, serve 
for 2 years. Presidents may be reelected after an intervening term, 
while legislators may be re-elected immediately.

Each year legislators elect from among themselves a president and vice 
president of Congress. Congress meets for two months a year. For the 
remainder of the year--unless an extraordinary plenary session is 
called--all legislative business is transacted by the 35 members of the 
Congress who serve on five permanent committees.

Ecuador has a three-tiered court system. Justices of the Supreme Court 
are appointed by the Congress for six-year terms. The Supreme Court 
names the members of the superior (provincial) courts, who, in turn, 
choose ordinary civil and penal judges.

The executive branch includes 17 ministries and several cabinet-level 
secretariats headed by presidential appointees. The president also 
appoints Ecuador's 21 provincial governors, who represent the central 
government at the local level. Provincial prefects and councilors, like 
municipal mayors and aldermen, are directly elected.

Principal Government Officials

Executive Branch

Chief of State
President Fabian Alarcon Rivera (since 11 February 1997)

Head of Government
President Fabian Alarcon Rivera (since 11 February 1997)

In February 1997, Congress removed President Abdala Bucaram Ortiz and 
replaced him with Fabian Alarcon Rivera. New elections are scheduled for 
May 1998.

Legislative Branch
Unicameral National Congress or Congreso Nacional (82 seats; 12 members 
popularly elected at large nationally for four-year terms, 70 members 
popularly elected by province for two-year terms.)

Vice President--Rosalia Arteaga
Minister of Foreign Affairs--Jose AYALA Lasso
Ambassador to the U.S.--Alberto Maspons
Ambassador to the UN--Luis Valencia
Ambassador to the OAS--Julio Prado 

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 


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 as the electorate searches for leaders who will bring about 
necessary economic reforms at minimal social cost. 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. Structural reforms are difficult to legislate and 
implement, but widespread recognition of the need for change has enabled 
Ecuador to enjoy a relatively high degree of social stability.

The center-left of the political spectrum represents a large segment of 
the body politic, but it is divided among several parties and this often 
has prevented it from winning the presidency. In the 1996 elections, 
Abdala Bucaram was able to capitalize on these divisions to emerge from 
the first round as the alternative to the right-of-center PSC candidate, 
and he then went on to consolidate the support of the center-left to win 
handily in the runoff. Bucaram's PRE only won 19 of 82 seats in 
Congress, however, with the remaining deputies spread among nearly a 
dozen parties as well as independents. Alarcon's FRA controls only three 
seats, so his administration depends on the legislative cooperation of 
larger parties. Opposition forces in Congress are loosely organized, but 
historically they often unite to block the administration's initiatives 
and to remove cabinet ministers. Party discipline is weak, and routinely 
many deputies switch allegiance during each Congress.

In the 1996 election, the indigenous population abandoned its 
traditional policy of shunning the official political system and 
participated actively in support of the Pachakutik/New Country movement. 
This coalition obtained eight deputies, and although some disaffiliated 
themselves early in the new Congressional session, the indigenous 
population established itself as a significant force in Ecuadoran 

Mid-term Congressional elections are currently scheduled for 1998.


Ecuador's gross domestic product (GDP) reached $18.0 billion in 1996. 
This represents growth of 2% over 1995. The economy is based on 
petroleum production, along with exports of agricultural commodities and 
seafood. The state oil industry makes up 10% of GDP, generates 37% of 
total exports, and provides about 30% of government revenue. Agriculture 
and fishing contribute 13% of GDP. Ecuador is a major world producer of 
bananas and shrimp. Cocoa, coffee, and tuna are also exported. Non-
traditional agricultural products, such as flowers and winter 
vegetables, are becoming more important. Industry accounts for 38% of 
GDP, and is becoming increasingly oriented to the export market.

Ecuador's merchandise exports for 1996 were $4.9 billion for 1996 and 
its imports $3.5 billion. Lower trade barriers in the region, including 
free-trade agreements with Colombia, Venezuela, and Bolivia are helping 
manufacturers of vehicles and other products become more export 
oriented. Ecuador has reduced most tariffs to 5-20% and in January 1995 
instituted a common external tariff with Colombia and Venezuela. Ecuador 
acceded to the World Trade Organization (WTO) in 1995. The government 
has committed to address remaining obstacles to trade, including 
agricultural price bands, minimum import prices, and sanitary 
registrations. Ecuador signed an intellectual property rights agreement 
with the United States in 1993 but has not yet implemented it. Ecuador 
has a unified, free market in foreign exchange.

During the oil boom of the 1970s, the government borrowed heavily from 
abroad, increased subsidies, and expanded the state's economic role. 
Such policies became unsustainable, leading to chronic macroeconomic 
instability in the 1980s. President Duran-Ballen took office in 1992 
promising to stabilize the economy, modernize the state, and expand the 
free market. A sizable devaluation of the sucre in 1992, large public-
sector price hikes, market pricing of fuel, and spending reductions--
together with monetary, budget, and tax reforms--reduced the public 
deficit. Inflation also fell from 60% to about 25%, but increased again 
to 30% in 1997. 

The structural reforms required to improve prospects for investment and 
growth have proven more difficult to achieve. Government staffing has 
been cut and many unnecessary regulations have been eliminated. Banks 
and capital markets are modernizing under new financial laws. Shares 
held by the state in private companies are being sold. The government 
has suggested plans to partially privatize some of the major state 
enterprises, and has obtained legal authority to privatize 35% of the 
telephone service. However, an auction of the telephone company 
scheduled for November 1997 had to be canceled when only one bidder 
participated. The government also hopes to reform the social security 
system. However, there is substantial political opposition to 
privatization proposals.

Liberalized investment regulations afford foreign investors national 
treatment--including equal tax rates--and do not require prior 
authorization for investment in most industries. A bilateral investment 
treaty with the United States approved in 1994 and ratified in May 1997 
provides for transfers of capital and profits and a binding arbitration 
dispute settlement procedure. The 1994 agrarian development law has 
improved the security of agricultural land tenure. The 1993 hydrocarbons 
law made investment in petroleum exploration more attractive, and U.S. 
firms initiated and expanded projects. However, U.S. firms doing 
business in Ecuador have complained of being pressured into contract 
renegotiations by the government. Several U.S. firms have had large 
judgments entered against them in Ecuadoran courts under a law which 
permitted the firms' local partners to disregard the terms of their 
contracts. This law, the Dealer's Act, was repealed in 1997 but remains 
in effect with regard to contracts entered into prior to the repeal. 


A small country, 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. Ecuador is also 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, is the nation's principal foreign policy issue. Ecuador maintains 
that the 1942 Rio Protocol of Peace, Friendship and Boundaries left 
several issues unresolved. For example, it asserts that geographic 
features in the area of the Cenepa River Valley do not match the 
topographical descriptions in the Protocol, thus making demarcation of 
the boundary there "inexecutable."

This long-running border dispute has 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 have shown significant progress. In January 1998, Ecuador 
and Peru initialed an historic agreement in Rio de Janeiro, Brazil, 
which provided a framework to resolve the major outstanding issues 
between the two countries through four commissions. Specifically, the 
commissions are 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 four commissions were to begin 
work in February, with the intention of reaching a definitive agreement 
by May 30, 1998.


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 Ecuadorans 
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. Over 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.

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 Ecuadoran legislation still 
exist, there is no current conflict. During the period that has elapsed 
since seizures which triggered the tuna import ban, successive Ecuadoran 
governments have declared their willingness to explore possible 
solutions to this problem with mutual respect for long-standing 
positions and principles of both sides.

Principal U.S. Embassy Officials

Ambassador--Leslie Alexander
Deputy Chief of Mission--James Curtis Struble
Political and Labor--David Lindwall
Economic--Michael Glover
Commercial--Janice Corbett
Consular--Joyce De Shazo
Administrative--Charles B. Angulo
Public Affairs Advisor--Mark Krischick
Regional Security Officer--Dennis Ravenscroft
USAID--Thomas Geiger
Defense Attache--Col. Ovidio E. Perez, USA
MilGroup--Col. Michael Merz, USA
Defense Mapping Agency--James P. Hutching 
Peace Corps--Jean Seigle
Agriculture--Daryl Brehm (resident in Lima)
FAA--Victor H. Echevarria (resident in Miami)
Narcotics Assistance Staff--James F. Greene
IRS--Frederick Dulas (resident in Santiago)
Consul General--Timothy Dunn
Chief, Consular Section--Norman Alexander

The U.S. Embassy in Ecuador is located at Avenida Patria 120, Quito 
(tel. (593)(2) 562-890/561-634).
Embassy Internet Home Page: .

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, N.W.
Washington, D.C. 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
(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)


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Further Electronic Information:

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the Superintendent of Documents, U.S. Government Printing Office, P.O. 
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