Once part of the Inca heartland, Ecuador lies on the western coast of South America. It was ruled by Spain from 1533, when the last Inca emperor was executed, until independence in 1830. Most Ecuadorans live either in the lowland coastal region or in the Andean Sierra. The Amazonian Amerindians are now pressing for their land rights to be recognized. Oil exports have boosted the economy.

Over half of the population is of Indian–Spanish extraction (mestizo). Black communities exist on the coast. The Amerindians, who make up about one-quarter of the population, are pressing for Ecuador to be described as a plurinational state, within which the different indigenous communities are recognized as distinct nationalities. The strong and largely unified Amerindian movement is at the forefront of social protests.

Strengths

Net oil exporter. World's biggest banana producer. Fishing industry.

Weaknesses

Poor infrastructure and land productivity. Energy crises. High inflation. Financial instability. Confusion over adoption of US dollar as official currency in 2000.

After the instability and corruption of the late 1990s, a new broad-based alliance was formed in 1999. Severe austerity reforms provoked widespread protests; the army intervened and Vice President Gustavo Noboa took over the presidency in 2000. The dollarization of the economy in 2000 led to popular protest, which resurfaced more widely and violently in response to IMF-backed austerity in 2001.

Access to US and EU markets for bananas and oil prices are major concerns. There are serious security problems along the border with Colombia.

The army kept out of politics from the mid-1970s until its intervention in 2000. Moves to reduce the military's 50% "royalty" share of oil revenues, its prime source of funding, have raised tensions.

The government is encouraging faster oil exploration and higher output. Ecuador left OPEC in 1992. Overfishing is threatening mackerel and squid stocks.

Oil drilling in new areas of Amazonia threatens indigenous tribes. Tourism, some of it illegal, has upset the delicate ecosystems of the Galapagos Islands; the land iguana has become sterile and black coral is stolen in quantity for souvenirs. The breaching of the Jessica oil tanker just offshore in 2001 raised concerns about shipping oil through ecologically sensitive areas.

The road network and railroad are grossly underfunded. Serious political unrest in 2000–2001 blocked roads.

Health care is seriously underfunded. Some services exist in poor urban districts but are still unavailable in many rural areas. Severe budget cuts mean that any improvement will depend on more outside aid.

Some 20% of Ecuadorans in the relevant age group receive higher education at 16 universities.

Programs have been launched to combat high levels of adult illiteracy in rural areas. Secondary schools are badly underfunded.

Right-wing paramilitaries were blamed for the murders of a trade union leader in November 1998 and a left-wing congressman in February 1999. The paramilitaries are rumored to be supported by Colombians. Left-wing urban guerrillas are also reported. Unprecedented numbers of citizens are applying for arms permits and the illegal arms trade is thriving.

An estimated 60% of the population live in poverty, but disparity between rich and poor is not as great as in other South American countries.

Tourism is growing. Quito, once the capital of the Inca empire, has restored many of its Spanish imperial buildings, including 86 churches. Access to the Galapagos Islands is restricted to 60,000 visitors a year.

Alternating republican and military governments ruled Ecuador from independence in 1830 to 1978.

• 1941–1942 Loss of mineral-rich El Oro region to Peru.
• 1948–1960 Prosperity from bananas.
• 1972 Oil production starts.
• 1979 Return to democracy.
• 1992 Amerindians win land in Amazonia.
• 1996–1997 Abdalá Bucarám Ortíz removed from presidency on grounds of mental incapacity.
• 1998–1999 Jamil Mahuad of DP wins elections; forms new majority alliance. Economic crisis.
• 2000 Army sides with Amerindian protestors. Vice President Gustavo Noboa replaces Mahuad.