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COUNTRY PROFILES


PROFILE

Country Facts

Full country name: Republic of Ecuador
Area: 283,560 sq km (109,000 sq miles) including the Galapagos Islands
Population: 14 million (2010 census unofficial figures)
Capital City: Quito (population: 1.8 million)
People: Mestizo (60%), Indigenous (20%), Caucasian (15%), Black (5%)
Language(s): Spanish (official), Amerindian languages (especially Quechua)
Religion(s): Roman Catholic (95%)
Currency: US Dollar (since early 2000)
Major political parties: Alianza País (Government Party), Partido Sociedad Patriótica (PSP), PRIAN, Movimiento Popular Democrático (MPD), Partido Social Cristiano (PSC); Pachakutik; Madera de Guerrero
Government: The 2008 constitution provides for a presidential system of democracy with presidential elections every four years and an executive and a legislature consisting of a unicameral National Assembly.
Head of State: Rafael Correa Delgado
Vice-President: Lenin Moreno Garcés
Foreign Minister: Ricardo Armando Patiño Aroca
Membership of international groupings/organisations: The UN; WTO; G-11; G77; Organisation of American States (OAS); Andean Community (CAN); Latin American Integration Association (ALADI); ALBA; UNASUR; Rio Group; Inter-American Developmental Bank (IADB), OLADE. On the Human Rights Committee of the UN. Associate member of Mercosur.

Did You Know?

-- The Galapagos Islands, famous for their connection with Charles Darwin and his work on the “Origin of the Species” are part of Ecuador. Their Royal Highnesses The Prince of Wales and The Duchess of Cornwall visited the islands in March 2009.

-- Yasuni National Park, located in Ecuador's Amazon region, is one of the most biologically diverse areas on earth. UNESCO named Yasuni a biosphere reserve in 1989. A small part of the park, known as Ishpingo-Tiputini-Tambococha (ITT), is home to at least two indigenous tribes, the Tagaeri and Taromenane, who maintain their traditional lifestyles in voluntary isolation.

-- ITT also contains about 850 million barrels of unexploited oil, about 20% of Ecuador's total reserves. The Ecuadorean government has asked the international community to compensate Ecuador for keeping this oil in the ground, thereby protecting the uniqueness of the diversity and contributing to global initiatives on climate change. Ecuador wants to receive USD100 million by December 2011 but so far only has contributions of around USD40 million.

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HEALTH

Ecuador's population growth rate is around 2.1%, with birth and death rates of 25.99 and 5.44 respectively per 1,000. The country has an infant mortality rate of 34.08 deaths for every 1,000 live births. The total fertility average rate is 3.12 children born per female with a total overall life expectancy of 73 years (72 for men and 74 for women).

The first cases of HIV were detected in Ecuador in 1984 and as of 2010 HIV/Aids affects less than 1% of the population. Since 1984 the Ministry of Health has detected 19,945 case of HIV/Aids of which 5,599 have died. The biggest increases have taken place since 2004 and the vast majority of cases have been contracted through sexual contact. Dengue fever, tuberculosis and malaria are present in certain parts of the country. Pollution in the capital, Quito, is above desirable levels. (For more details see and http://www.msp.gov.ec/ (http://www.msp.gov.ec/) and www.paho.org (http://www.paho.org) ).

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ENVIRONMENT

Ecuador has supported the Kyoto Protocol and other environmental forums. For its size Ecuador has one of the highest concentrations of diversity in the world, though this is threatened by destruction of natural ecosystems. According to the United States Agency for International Development (USAID), Ecuador has one of the highest deforestation rates in South America despite government efforts to slow the damage.

The Galapagos Islands and surrounding waters are both World Heritage Sites and have been recognised as of vital ecological importance. These too have come under threat, prompting UNESCO in June 2007 to include the Galapagos in the list of World Heritage Sites at risk. The government undertook to address problems caused by immigration, excess fishing, invasive species and increased tourism, and in 2010 UNESCO took the Galapagos Islands off their at risk list, for many a premature move. In July 2007, the President signed a decree legalising incidental shark fishing, generating criticism particularly from environmentalists. Shark finning (removing the fin and throwing the carcass overboard) is still illegal but continues because of weak enforcement and a strong demand, particularly from Asia. According to experts, the practice has proved harmful to the marine ecosystem in the Galapagos and mainland coastal waters.

The UK’s environmental objective in Ecuador is to support efforts at a local level to tackle environmental problems and to maintain a dialogue with the Ecuadorean government over a post-Kyoto agreement on climate change. In 2005 the UK financed two projects worth over £300,000 under the Darwin Initiative ( www.darwin.gov.uk (http://www.darwin.gov.uk) ) to protect the Galapagos coral reefs and associated biodiversity, and to develop a sustainable conservation network for primates in the north west of Ecuador. Two further Darwin Initiative projects worth £360,000 started in 2006 and 2007. One contributes to the conservation of the critically endangered Mangrove Finch on the Galapagos Islands. The other is creating an orchid seed bank and establishing Ecuador as a regional centre for scientific research and training. In March 2009 Their Royal Highnesses The Prince of Wales and The Duchess of Cornwall paid a brief visit to the Galapagos Islands to witness first hand the challenges faced in preserving the islands’ unique biodiversity.

The Embassy also launched in 2009 its campaign “Vuélvete Verde” (Become Green) to try to raise awareness amongst the population in general of the need to tackle climate change. Various projects have been implemented under this campaign including workshops with children; a campaign in conjunction with Quito City to reduce use of plastic bags; organising two waste management seminars; using the Residence to show the value of composting and recycling; and showing the film “Age of Stupid” in cities, schools and colleges across Ecuador.

The Embassy has also supported a series of seminars and workshops with the media on reporting climate change issues. Our aim is to get such articles off the environment pages and into mainstream issues, such as politics, economics and security.

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ECONOMY

Basic Economic Facts

GDP: $61.49 billion (2010 estimate)
GDP - real growth rate: 3.4% in 2010 (Central Bank estimate)
GDP - per capita: $4,296 (2010 Central Bank estimate)
Inflation rate: 3.5% (2011 forecast)
Population below poverty line: 35.1% (2008)
Major Industries: Oil, bananas, coffee, cocoa, tuna; flowers; shrimp farming; exotic fruits; timber.
Major trading partners: United States, Latin American countries, European Union, Japan, Korea.

Ecuador is the world’s leading exporter of bananas and a major producer of agricultural commodities and shrimp, in addition to coffee, cocoa and tuna fish. Non-traditional agricultural products such as flowers and winter vegetables are also important export earners.

The economy is largely dependent on oil revenues, traditional exports and remittances from Ecuadoreans overseas (although these have declined since 2008). It is therefore highly vulnerable to external shocks. The aftermath of the weather phenomenon El Niño and the depressed oil market of 1997-98 contributed to half of Ecuador’s already weak banking sector collapsing overnight in 1999. The failure led to an unprecedented default on external loans, ignited hyperinflation, and caused a 70% depreciation of the then currency, the Sucre. The economic breakdown set off massive migration principally to the US and Europe (especially Spain and Italy), but also to other Latin American countries. The economy only started to stabilise after the country took the highly controversial decision to adopt the US Dollar as its currency in 2000.

Dollarisation dampened inflation until 2006 when it began to pick up again, accelerating in 2008 to just under 9%. Inflation has since decreased because of the global economic slowdown, but so did oil revenues, remittances and export earnings, giving rise to predictions that the government could experience financing difficulties in 2010 and 2011. However, with the situation in the Middle East and North Africa, oil revenues are again increasing and Ecuador is likely to be able to finance its projected USD4 billion deficit without difficulty.

President Correa’s policy of having the public sector lead the economy has seen public expenditure triple over four years but this has not led to much job creation or high growth. There are signs that he is becoming more pragmatic and recognising the role of the private sector but signals are mixed.

Correa’s response to the global financial crisis has included an assertion that if the need arose he would suspend payments on the foreign debt in order to continue high levels of social spending. Such news has propelled Ecuador’s risk rating upward. In November 2008 a government-appointed commission tasked with examining the country’s external debt issued its report. The report, which condemned much of the debt as illegal and illegitimate and laid the blame of past administrations, was reportedly based more on political opinion rather than technical analysis. Since the report, the government has sent mixed messages to the market, declaring a moratorium on some of the debt and servicing other parts. This has restricted Ecuador’s access to international credit, although some multilaterals have tacitly endorsed Ecuador's handling of debt issues, including its modified Dutch auction in 2009 to repurchase of Global 2012 and 2030 bonds, by continuing to lend. In 2009 the government introduced import restrictions in an effort to reduce a widening trade balance. At the start of 2010, and following WTO pressure, the government started to dismantle these restrictions, though it has announced a policy of import substitution. This, together with a stipulation that government institutions must “buy Ecuadorean”, has raised competition issues in the WTO and EU.

Under previous administrations, Ecuador had been negotiating a free trade agreement (FTA) with the US, Ecuador’s biggest export market. However, since taking office President Correa has halted the talks on the grounds that they are not in Ecuador’s national interest. Ecuadorean exporters continued to benefit from tariff free trade with US for certain goods, under the Andean Trade Partnership and Drug Eradication Agreement (ATPDEA) until February 2011 when the US Congress failed to renew it. Following the expulsion of the US and Ecuadorean Ambassadors from Quito and Washington in April 2011 this is not likely to be renewed any time soon and Ecuadorean goods will be at a disadvantage compared with their neighbours for entering the US market.

In the meantime, to reduce economic dependence on the US the government is seeking new trading partners, particularly in Asia, Eastern Europe and the Middle East. As a member of the Andean Community, Ecuador did participate with Peru and Colombia (but not Bolivia) in talks on an Association Agreement between the Andean Community and the EU, in which trade was an important pillar. These negotiations were however suspended on the orders of President Correa in 2009, again on the grounds that the proposed agreements did not fully meet Ecuador’s national interests. In March 2011, however, Ecuador officially informed the EU that it wanted to re-enter negotiations to reach agreement. A response from the EU is still awaited on Ecuador’s proposals to resolve key issues such as public procurement, services and intellectual property.

Ecuador is increasingly being affected by the drugs trade with the country becoming increasingly important for the transit, processing and export of cocaine. A dollarised economy and liberal visa policy are seen as attractive for money laundering activities, and the Financial Action Task Force recently maintained Ecuador on a watch list. Chronic corruption in all sectors of Ecuadorean society continues. Whilst Transparency International’s corruption perceptions index (CPI) continues to classify Ecuador as one of the most corrupt countries in Latin America, it also acknowledges that public opinion in Ecuador recognises government’s efforts to combat corruption are more consistent, if not effective, than in the past.

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HISTORY

Advanced indigenous cultures flourished prior to the arrival of the Incas in the 15th century and subsequent conquest by the Spanish in 1534. After some 300 years of Spanish domination, forces under Antonio José de Sucre defeated the Spanish in 1822 at the battle of Pichincha, just outside Quito. Ecuador then joined Simon Bolivar’s Republic of Gran Colombia, but left to become a separate Republic in 1830.

Political instability and rivalry between the coast and highlands heavily influenced the post-independence period. Growth of the banking sector and a rapid expansion in cocoa production created a wealthy coastal middle class whose increasing political power started a liberal revolution in 1895 and led to capitalist development over the next 30 years.

External shocks, including a collapse in the cocoa market in the 1920s and the Great Depression in the 1930s, deepened instability between 1931 and 1948. Between 1948 and 1960 Ecuador enjoyed 12 years of relatively stable civilian rule. Increasing banana exports helped to finance development policies. But social unrest resurfaced in the 1960s, giving rise to an anti-Communist military government between 1963 and 1966. Soon thereafter, Ecuador underwent an economic boom with the discovery of extensive oil reserves, which prompted the government to borrow heavily internationally to finance state-led industrialisation.

In 1978 a referendum approved a new constitution that formed the basis for a return to democratic elections and civilian rule the following year. Since then, Ecuador's 1998 constitution was rewritten by a constitutional assembly, which concluded in July 2008. The new constitution, Ecuador's twentieth since independence, was accepted in a national referendum on 28 September 2008. It came into force on 20 October 2008.

BBC News Country Timeline: Ecuador (http://news.bbc.co.uk/hi/english/world/americas/newsid_1212000/1212826.stm)

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INTERNATIONAL RELATIONS

Relations with Neighbours

Ecuador has had serious tensions with Peru over territorial disputes, which last erupted into open conflict on the border in 1995. In 1998 both countries initialled an agreement in Rio de Janeiro to resolve major outstanding issues. On October 26, 1998 Presidents Fujimori and Mahuad signed a comprehensive settlement in Brazil. Relations with Peru have since remained stable.

Ecuador has been, and continues to be, affected by the conflict in Colombia, in terms of drugs, illegal and terrorist Colombian armed groups on both sides of the border, trafficking of small arms and the steady flow of Colombian refugees fleeing the conflict. Ecuador is promoting Plan Ecuador to co-ordinate a response to the northern border issues, including raising international financial support for projects in the area.

Diplomatic relations between Ecuador and Colombia were fully restored in 2011 following the rupture of diplomatic relations following a military incursion by Colombian troops into Ecuadorean territory on 1 March 2008, which led to the death of Raul Reyes, number two in the FARC, encamped on Ecuadorean soil. Relations between the two governments have generally been tense largely because President Correa continues to refuse to classify the major guerrilla groups in Colombia as terrorists, and insists that Colombia’s civil strife is an internal problem which can only be resolved through peaceful means. The conflict in Colombia has led to a large number of Colombians seeking refuge in Ecuador, and Colombia has offered little if any assistance in dealing with this problem. In addition, Ecuador has consistently protested against Colombian aerial spraying of coca cultivation in the border region alleging that Ecuadoreans living in the area are suffering from crop failure and health problems caused by the chemicals drifting across the border. It took its case to the International Court of Justice in The Hague at the end of March 2008. Since Juan Manuel Santos took office in Colombia in August 2010 both have expressed the hope that relations and cooperation can be improved.

Relations with the UK

Historical links go back to the first attempt to gain independence from the Spanish in Quito on 10 August 1809 chronicled by William Bennet Stevenson, an Englishman acting as Secretary to Count Ruiz de Castilla, the leader of the Revolt.

Cultural Relations with the UK

There is no formal cultural programme. The Embassy has participated in various local film festivals and in 2010 supported a visit by the London Festival Orchestra.

Outward Visits

Their Royal Highnesses The Prince of Wales and The Duchess of Cornwall visited Ecuador in March 2009 to celebrate the anniversaries surrounding Charles Darwin and to support the work of the Charles Darwin Foundation and Galapagos National Park in environmental issues. They visited Quito where the Vice President received them, and the Galapagos Islands where they saw first-hand the efforts being made to preserve the unique biodiversity of the islands.

The British Embassy also sponsored visits by two members of the House of Lords, Lord Brennan QC and Baroness Hooper in 2005.

Inward Visits

President Correa made an academic visit to the UK in October 2009 giving speeches at the Oxford Union, Chatham House and the London School of Economics. He also visited the House of Lords and had a meeting with the Speaker, Baroness Hyman

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GEOGRAPHY

Ecuador straddles the equator in the north-western part of South America. The country is bordered by Colombia to the north, Peru to the south and east, and the Pacific Ocean to the west. The Galapagos archipelago, famous for its connection with Charles Darwin, is part of Ecuador and is set in the Pacific Ocean some 960km off the Ecuadorean coast. Ecuador has a tropical climate in coastal regions, but gets cooler as you move inland. The terrain consists of coastal plain (costa), inter-Andean central highlands (sierra), and a flat, rolling jungle in the east (oriente). Elevation varies from sea level to 6,310m. Guayaquil, on the coast, is Ecuador’s largest city. At an altitude of 2,850m above sea level the capital Quito is set in a hollow at the foot of Rucu Pinchincha (4,794m). It is the second highest capital in Latin America after La Paz. Guagua Pichincha, an active volcano, overlooks the city 12km away.

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TRADE AND INVESTMENT

Trade and Investment with the UK

Trade between the two countries is low. The UK’s main exports are pharmaceuticals, transport equipment, chemical materials/products, and beverages (mainly whisky). In 2010, UK exports to Ecuador totalled £54 million and imports amounted to £70 million (mainly shrimp and tropical fruits). The UKTI section in the Embassy is working to identify opportunities in key sectors: energy, security, mining, health, environment and renewable energy and has organised a series of seminars to inform the Ecuadorean business sector of the opportunities the UK provides.

A Bilateral Investment Promotion and Protection Agreement (IPPA) was signed in 1994. President Correa has said that he wants to annul agreements such as this as the clauses on arbitration are unconstitutional. He has started a process of denunciation but to date no formal termination procedures have been started. There are few UK companies still active in Ecuador – Unilever, SABMIller, BUPA, G4S, Wood Group, for example. The Anglo-Ecuadorean Chamber of Commerce has two branches in Quito and Guayaquil and promotes links between Ecuador and Britain. UK Trade & Investment Country Profile: Ecuador (http://www.uktradeinvest.gov.uk/ukti/ecuador)

UK Bilateral Development Assistance

The UK has provided assistance worth over £3.3 million over the period 2000 - 2010, covering climate change awareness, environmental protection, children and human rights, gender, democracy and good governance issues. For 2011, the Embassy has an allocation of £60,000 for bilateral programme projects which will be used to focus on the FCO’s priority areas – prosperity, security and consular assistance.

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POLITICS

Several main traditional political parties dominated politics since Ecuador’s return to civilian rule. This period has been characterised by both political and institutional instability. During the 1980s and early 1990s two major political parties had the most influence - the right wing PSC (Partido Social Cristiano), with its traditional leader León Febres Cordero (President 1984-88), and the left wing ID (Izquierda Democrática), led by Rodrigo Borja (President 1988-92). For many years, the PSC controlled the main state institutions, including Congress. In the early nineties the credibility of the traditional parties began to decline and many populist movements began to gain favour.

Abdalá Bucaram (President August 1996 to February 1997) and his party PRE (Partido Roldosista Ecuatoriano) had much influence in the late 1990s, but lost favour after Bucaram’s controversial administration, which resulted in his premature removal from office. The DP (Democracia Popular) was also a key player during this period, led by Jamil Mahuad (President August 1998 to January 2000). The economic crisis, culminating in the banking crisis of 1999, in which half of Ecuador’s banks collapsed, led Mahuad to adopt the US Dollar as the national currency, amid much opposition. Although the economy stabilised quickly as a result of dollarisation, Mahuad was forced to leave office prematurely. The DP was recently re-founded as UDC (Unión Demócrata Cristiana), but as a centre-right wing party it has failed to attract popular support.

Lucio Gutierrez (President 2003-2005, when he was forced from office) and his party PSP (Partido Sociedad Patriótica) heavily influenced the administration of government in more recent years. But the PSP has been unable to regain its previously powerful position. The Movimiento Popular Democratico (MPD), with strong links to the education sector, has been a political force in recent Ecuadorean politics, but its influence has waned with many of its traditional voters now supporting President Correa’s movement.

Many other smaller political and minority parties have also taken part in Ecuadorean politics and the voting system had been designed to give emphasis to minorities. In the past this has produced a large number of political organisations, weakening the influence of government and leading to increasingly polarised political opinion.

President Rafael Correa (Alianza PAIS), who took office in January 2007, has pledged to redistribute the country’s wealth through radical political and social reform, including greater State participation in the economy. A new Constitution came into force on 20 October 2008. Presidential and general elections were held on 26 April 2009 and President Correa was elected in the first round. However, his Alianza PAIS movement failed to gain a majority of seats in the National Assembly and he has struggled to have legislation passed in the Assembly to carry out his citizens revolution.

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HUMAN RIGHTS

Ecuador is a signatory of the six major Human Rights instruments, has a National Human Rights Plan and a Constitution that is one of the most advanced in terms of human rights principles in Latin America.

Ecuador's Human Rights record does not attract regular criticism from Human Rights organisations. Amnesty International has in the past urged the Ecuadorean Government to demonstrate its commitment to respect human rights, and has urged the authorities to carry out independent and impartial investigations to bring perpetrators of human rights abuse to justice. A government appointed truth commission recently published a report after carrying out investigations into past government behaviour. Murder rates, including contract killings, have risen significantly in recent years and kidnappings have also increased.

There is concern at threats to freedom of expression, particularly within the media. The President has a confrontational relationship with the media and there is an increasing level of self-censorship.

The UK has in the past funded a number of small projects on human rights. It is currently funding a project aimed to develop awareness of international human rights standards in prison administration with a view to support the implementation of the prevention national mechanism in Ecuador.

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Last Updated: April 2011

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