Country profile: Ecuador
In the days following the catastrophic earthquake that struck Ecuador on 16 April, checkout lines at the supermarkets were exceptionally long. Ordinary Ecuadorians from all walks of life came together to buy food, drinking water and other essential supplies for the victims. It was the country’s worst natural disaster in 70 years, which left as many as 1,000 dead, over 10,000 homeless, and caused over $3 billion worth of damage.
The earthquake happened just as the country was entering a recession – global oil prices have reached a new low and the government has already had to cut public spending, especially in investment projects. Despite the poor economic outlook, President Rafael Correa remains the country’s most popular politician.
The reason for Correa’s popularity, especially among the country’s poor, is simple. Since his election in 2006 poverty rates have nearly halved, from 45 to 25 per cent and inequality has decreased significantly. Along with higher taxation of the wealthy, there has been increased spending on housing subsidies, cash transfers for the poor, and a doubling of investment in public education. Also, infrastructure throughout the country has visibly improved, with numerous new highways, universities and public transportation upgrades.
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Correa has also brought a measure of political stability. Between 1996 and 2007 Ecuador went through eight presidents and two severe political and economic crises. By the time Correa leaves the presidency in 2017, he will have governed for 10 years, longer than any president since Eloy Alfaro, one of the nation’s founding fathers, who left office in 1911.
One area where the government has faced problems recently is in its relationship with social movements. A significant segment of the fractious indigenous movement, several smaller leftist parties, environmental groups, and a sector of the union movement have criticized the President for going back on a variety of progressive policy promises and for governing in an authoritarian manner. They say he has failed to move away from ‘extractivism’ and oil dependency, from vigorously protecting the environment, and from including social movements in the development of his policies. The most important of these groups is the indigenous movement, which, despite its internal divisions, can claim to represent up to 10 per cent of the population.
The country is extremely dependent on oil. Approximately half of Ecuador’s export revenue comes from oil exports and, at times, depending on the price of oil, this provides a quarter of the state’s budget. Despite the 2008 global economic crisis, Ecuador was able to maintain robust average annual GDP growth of over four per cent between 2000 and 2012. Nevertheless, the fact that the country adopted the US dollar as its currency following the economic resession of 2000 hampers economic policy significantly.
Although Ecuador is a welcoming country for foreigners, some also consider it to be rather conservative and closed. Abortion, for example, is illegal in almost all circumstances. Also, subservient class-based attitudes are still prevalent. Yet the country can boast that it included the indigenous concept of buen vivir (good living) in its 2008 constitution and thereby contributed to the international discussion about how to achieve a non-consumerist and ecologically sound society.
Ecuador’s diverse landscape – including the Amazon, beautiful beaches, mountain forests, the Galapagos Islands and spectacular volcanoes – as well as its diverse population and politics, make for a country that is never less than interesting. Now that conservative forces in Latin America are attempting to roll back the region’s so-called ‘pink tide’, their next target will probably be Ecuador and it will no doubt become even more interesting.