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Ecuador
Between 1904 and 1942, Ecuador lost territories in a series of
conflicts with its neighbors. A border war with Peru that flared in
1995 was resolved in 1999. Although Ecuador marked 25 years of
civilian governance in 2004, the period has been marred by political
instability. Protests in Quito have contributed to the mid-term
ouster of Ecuador's last three democratically elected Presidents.
After winning the 2006 presidential elections, President Rafael
CORREA assumed power in 2007. Besides being very critical of
Congress, he won public support to have the constitution redrafted
so the power of the political parties can be limited, and he is
opposed to a free trade agreement with the U.S.
Capital City: Quito (-5 GMT)
Chief of State: President Rafael CORREA Delgado
Head of Govt.: President Rafael CORREA Delgado
Currency: US dollar
Main Cities: Guayaquil
Major Languages: Spanish
Calling Code: 593
Voltage: 110/220V
Primary Religions: Roman Catholic
Main Airports
Guayaquil (GYE) (Simón Bolívar), Quito (UIO) (Mariscal Sucre)
U.S. Embassy
Avenida Patria 120 Quito, Ecuador
tel. (593)(2) 256-2890/256-1634)
Statistics
- GDP: purchasing power parity:
- $56.9 billion (2005 est.)
- GDP - real growth rate:
- 3.9% (2005 est.)
- GDP - per capita: purchasing power parity:
- 4,300 (2005 est.)
- Inflation rate (consumer prices):
- 2.1% (2005 est.)
- Labor force:
- 4.6 million (urban) (2005 est.)
- Exports:
- $9.224 billion (2005 est.)
- Exports - partners:
- US 52.7%, Peru 8.3%, Germany 4.5% (2005)
- Imports:
- $8.436 billion (2005 est.)
- Imports - partners:
- US 22.4%, Colombia 13%, Venezuela 7.9%, Brazil 6%, China
5.3% (2005)
- Population:
- 13,547,510 (July 2006 est.)
- Population growth rate:
- 1.5% (2006 est.)
- Population Below Poverty Line:
- 41% (2006)
- Major Industries:
- petroleum, food processing, textiles, wood products,
chemicals
- Employing Workers: 161*
- Registering Property: 84*
- Enforcing Contracts: 96*
- Closing a Business: 134*
- *2006 World Bank rank out of 175 countries
- Starting a Business
The table below shows the number of steps and the amount of
time needed to start a business, on average
| Indicator |
Ecuador |
Region |
| Procedures (number) |
14 |
10.2 |
| Time (days) |
65 |
73.3 |
Ecuador Risk Assessment
Country Rating
Rating: C
A very uncertain
political and economic outlook and a business environment with many
troublesome weaknesses can have a significant impact on corporate
payment behaviour. Corporate default probability is high.
Risk Assessment
The anti-liberal leftwing president
Rafael Correa began his four-year term in January 2007. The election
victory of his Acuerdo Pais movement late September 2007 led to the
institution of a constituent Assembly with early general elections
likely in 2008.
Despite public spending buoyed by higher oil revenues, economic
growth should be limited due to a smaller rise in private
consumption attributable to a decline in expatriate transfers and
bank credit, along with a reduction in corporate investment amid the
current political and economic uncertainties.
The profit sharing with international oil companies was revised
again in favour of the State in October 2007 and the country
rejoined OPEC end 2007. The oil wealth should contribute to an
increase in social spending but without jeopardising the fiscal
surplus for the time being. There is nonetheless still uncertainty
as to Ecuador's intention to fully honour its obligations in
connection with foreign debt, even if officials seem aware of the
negative impact of any unjustified restructuring. The suspension of
negotiations on a free trade agreement with the United States, the
country's main trading partner, will affect its exports and its
trade and current account surpluses should shrink. And unless the
Andean Trade Promotion and Drug-Eradication Act (ATPDEA) is extended
beyond March 2008, Ecuador will lose its preferential access to the
North American market.
In this troubled context, the macroeconomic improvement achieved in
recent years could be in jeopardy from 2009. In a period of
international financial turmoil, that prospect could trigger a
crisis of confidence in financial markets.
STRENGTHS
- Ecuador boasts extensive
resources — mining, gas, and especially oil — with completion of
the trans-Andean pipeline supposed to facilitate increased
production and exports.
- World-leading exporter of
bananas and shrimp, the country is also endowed with rich
fishing areas especially for tuna.
- The economy's dollarisation has
notably contributed to limiting inflation and capital flight.
- Rising wages and easier access
to credit have spurred household consumption.
WEAKNESSES
- Insufficiently diversified, the
economy has been vulnerable to fluctuations in raw materials
prices, particularly for oil.
- Chronic political instability
has not facilitated economic and financial consolidation and has
hampered progress on reforms.
- A lack of infrastructure and
skilled labour compounded by a poor institutional and legal
environment has deterred local and foreign investors.
- Ecuador suffers from a chronic
shortage of foreign exchange reserves, a shortcoming nonetheless
mitigated by the dollarisation.
- Regional disparities, marked
inequality and social tensions have undermined the cohesiveness
of this multiethnic country.
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