Despite rich resources, Ecuador is a relatively poor
country. The country's economy is highly dependent on a few
export goods (oil and bananas) and therefore very sensitive
to changes in the world market price of these.
In the 1970s, oil recovery replaced agriculture as the
most economically important sector; oil now accounts for
half of the country's export revenue. However, despite the
fact that agriculture's importance for both GDP and
employment has decreased, banana exports still represent an
important source of income.
countryaah, the country's very strong economic upswing during the
1970s was dampened in the 1980s and 1990s. During the 00s,
oil revenues have risen and the country's economy has
stabilized somewhat. Rafael Correa, who assumed office in
2007, has implemented increased state involvement in key
industries such as the oil and mining industry.
The country has on many occasions been affected by
natural disasters; An earthquake in 1987 destroyed the oil
lines, and the hot water stream El Niño periodically causes
weather disasters that adversely affect both agriculture and
For information on GDP and other business statistics, see
Agriculture and forestry
Although agricultural products are a declining part of
the country's exports, the agricultural industry is still an
important industry. About 9 percent of the area is
cultivated. The land is mainly used as haciendas,
mainly in the coastal area but also in the highlands, or in
very small units (often less than 1 ha) by Native American
small farmers in the mountainous regions. This extreme
distribution of ownership does not promote a rational
agricultural operation, but the attempts at land reform have
so far been unsuccessful.
In the western lowland area, La Costa, and up towards the
slopes of the Andes, an export-oriented agriculture is
conducted with the cultivation of bananas, coffee and cocoa.
Ecuador is one of the world's largest exporters of bananas.
Previously, cocoa was the most important export crop, but
was overrun by bananas after the Second World War. Some of
the crops are now being replaced by oil palm trees, while
new banana crops are being taken up in other areas. Other
crops in the coastal area are sugar cane and rice, which
largely go to domestic consumption.
In central Ecuador's mountain areas, La Sierra,
agriculture is largely conducted for self-catering and for
sale on the local market. Mainly, potatoes, maize, wheat and
other cereals are grown as well as beans and various
vegetables. The soil is of volcanic origin and highly
erosion sensitive. Extensive pasture features the large
alpine grass steppes, páramos. Dairy management
also exists around the larger resorts, mainly Quito.
In the most sparsely populated eastern lowland area, El
Oriente, which is mainly covered by tropical rainforest,
agriculture has only local importance.
Although almost half of Ecuador's area is forested,
forestry plays little role. The richness of the forests in
combination with difficult transport conditions has
prevented forest exploitation. However, Ecuador is one of
the world's largest exporters of balsa wood.
The fishing industry has become increasingly important in
recent decades. The cold and nutritious Humboldt stream
provides rich fishing waters off the coast of Ecuador and
around the Galápagos Islands. Mostly, sardines and anchoveta
are caught, which are, however, partly used for fishmeal.
Furthermore, tuna. To protect fisheries, Ecuador has
expanded its economic zone to 200 nautical miles (370 km).
In the Bay of Guayaquil, large seafood (shrimp) cultivations
Minerals and energy
Apart from some gold, mineral extraction is
insignificant. Minor deposits of silver, copper and iron are
available. Oil is the country's most economically important
asset. At Santa Elena in the west, oil has been mined since
1917, and there is also a refinery here. Following oil
discoveries in 1967 in the northern part of El Oriente, oil
pipelines were built to the coast. Oil has subsequently been
Ecuador's most important source of income. The country
joined OPEC in 1974. New oil discoveries have later been
made both in El Oriente and in the coastal zone and
refineries have been built. Furthermore, the country has a
partnership with Venezuela that refines Ecuadorian oil.
Large deposits of natural gas exist, including in the Gulf
The electricity supply, which has been greatly expanded,
has largely been based on thermal power plants. However, the
country has great water energy resources, especially in the
Andes slopes towards the Amazon basin. Large extensions have
been planned. East of Cuenca, for example, the Paute project
has been realized. The country's electricity production is
now only half based on oil, but the energy supply is drawn
with major problems, partly due to lack of maintenance of
the hydroelectric power stations.
Since Ecuador became an oil exporting state in 1972, the
new revenue has been partially used to promote the country's
industry. However, the strong development of the 1970s
ceased during the 1980s, and the industry still plays a
relatively limited role in Ecuador, although some recovery
took place during the 1990s and 00s. It accounts for just
over 20 percent of employment.
Most important is the textile and food industry, which
mainly works for the domestic market and includes sugar
refineries, mills, breweries and canning factories. Textile
manufacturing has always been of great importance in the
country. It is partly run in artisanal form and has its main
focus in Quito, Ambato (central Ecuador) and Otavalo
(northern Ecuador). Other products are shoes, (Panama) hats,
ceramics and construction products.
The oil-related industry has the greatest economic
significance. A major expansion has been initiated, both by
oil refineries and by the petrochemical industry. With the
exception of these two sectors, Ecuador's industries are
highly concentrated in Guayaquil and Quito. The government's
various attempts to achieve a more widespread location have
not been successful.
For Ecuador's economy, foreign trade plays a significant
role. The country's export goods are often subject to large
variations in price levels, which makes financial planning
difficult. The export of oil and oil products usually
accounts for more than half of export earnings. The rest
comes mainly from bananas, coffee and other agricultural
products as well as from fish and fishery products. The
majority of exports go to the United States. Imports come
primarily from the US, China and Colombia and consist of
machinery, fuel and chemical products, among others.
As a rule, Ecuador has had a positive trade balance, but
after the restructuring program began in 1991 and thus
increased imports, the trade balance has deteriorated.
Interest and repayments to the rising external debt also
take up an increasing share of export earnings. After oil
exports, tourism provides the largest inflow of foreign
Ecuador is one of the most popular tourist destinations
in South America, and tourism has become one of the
country's most important sources of income. Usually, the
country is visited by just over 1 million tourists a year.
If you want to experience Ecuador at all, you should
visit both the coastal country and the highlands. The city
of Guayaquil is warm and humid; one day, however, it might
be enough to experience the atmosphere on the main streets,
lined by the banks 'and trading houses' turn of the century
Landslides have now made it impossible for the classic
journey by narrow-gauge railway up the mountains to Quito.
The cityscape in the central parts of the capital is
characterized by lavishly decorated Baroque churches and,
above all, by the closed environments of the vast monastery.
In the city there are outstanding collections of
pre-Columbian arts and crafts.
From Quito you can make interesting excursions. to the
market for Native American handicraft in Otavalo, which also
provides the opportunity to study the diverse folk life. On
the way there, the equator is passed, marked by two
monuments, one older, misplaced, and one later with more
precise location. To the south you reach a magnificent
landscape with large, snow-capped volcanic mountains.
A unique tourist destination is the Galápagos Islands,
with giant turtles, large lizards and an interesting bird
life; the islands form a national park and the number of
visitors is limited for ecological reasons. Since 1978, both
the Galápagos Islands and Quito have been included on the
UNESCO World Heritage List.