Ecuador’s economy is based on exports from the banana, shrimp, and other agriculture industries; money transfers from natives employed abroad; and petroleum production, which accounts for 40% of export earnings and one-third of the central government budget revenues. The economy went into a scary free-fall in the late 1990s when the nation experienced natural disasters such as El Niño and the eruption of the volcano Pichincha in combination with a sharp decline in world petroleum prices. Poverty worsened and the banking system collapsed. Bankers fled the country in 1999 without honoring their clients’ accounts. When the Sucre- the nation’s currency- depreciated by about 70% in the same decade, then-President Jamil Mahuad made the wildly unpopular announcement that he would adopt the US dollar as the national currency. A coup in January 2000 ousted Mahuad. With few alternatives to save the struggling economy, Congress went on to approve the adoption of the US dollar in March of that year. Since then the nation’s economy has been relatively solid, though an estimated 41% of the population still lives below the poverty line.
President Correa has not been quiet about his opposition to Free Trade Agreement talks with the US, and stated that Ecuador will acknowledge its external debt- and only what it deemed to be “legitimate debt”- only after successfully funding domestic social programs. As of February 2009, the government has implemented income transfers to the poor and has announced plans to increase spending on health and education.
Unemployment: 8.7% (as of 2008)
Underemployment: 47% (as of 2008)
GDP Per Capita: $3,500 (as of 2008)
Public debt: 30% of GDP (as of 2008)
Chief Agricultural exports: flowers, bananas, coffee, cocoa, rice, potatoes, manioc (tapioca), plantains, sugarcane; cattle, sheep, pigs, beef, pork, dairy products; balsa wood; fish, shrimp.
Export commodities: petroleum, bananas, cut flowers, shrimp.
Main industries: petroleum, food processing, textiles, wood products, chemicals.