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Updated January 5, 2021
Ecuador: An Overview
Political and Economic Situation
democratic institutions by bolstering judicial independence
Ecuador is a small, ethnically and geographically diverse
and press freedom.
country of 17 million inhabitants, located in South America
between Colombia and Peru. In 2017, Lenín Moreno of the
Figure 1. Ecuador at a Glance
leftist Alianza Pais (AP) party was elected president,
succeeding President Rafael Correa (2007-2017), a populist
leader of the same party who had governed in an
increasingly authoritarian manner. Correa, Ecuador’s
longest-serving president, was reelected three times,
bringing stability to Ecuador’s previously tumultuous
politics. Many thought Correa’s socialist “Citizens’
Revolution” movement would continue under President
Moreno, who served as Correa’s vice president for six
years. President Moreno quickly distanced himself from
Correa in style and substance, however, and implemented
liberal political and economic reforms.
Area: 109,483 square miles, slightly smal er than Nevada
Historically, Ecuador’s economy has relied on agricultural
Leadership: President: Lenín Moreno; Vice President: María
commodities, such as bananas, shrimp, and coffee. The
Alejandra Muñoz Seminario; Minister of Foreign Relations: Luis
discovery of oil in the Amazon in 1967 transformed the
Gal egos Chiriboga
Ecuadorian economy, but the country remains largely
Ethnic Makeup: 72% Mestizo (mixed Amerindian and
dependent on commodity exports despite diversification
White); 7.4% Montuvio (coastal farmers of mixed race and
efforts. Ecuador adopted the U.S. dollar as its national
indigenous heritage); 7.2% Afro-Ecuadorian; 7% Amerindian;
currency in 2000, following a major recession.
and 6.1% White (2010 census, National Statistics and Census)
Dollarization helped to curb inflation and foster
Key Trading Partners: United States (26.7%), China
macroeconomic stability. However, according to numerous
(14.8%), and Panama (8%) (Trade Data Monitor)
assessments, strong economic growth under Correa, which
Poverty Rate: 25% (2019, World Bank)
averaged 5% annually between 2010 and 2014, was driven
Economy: GDP = $93.1 bil ion (current U.S. $, 2020 World
by a public investment boom fueled by high oil prices and
Bank est.)
lending from China. For its construction projects, the
In October 2017, after two months in office, President
Correa government took on extensive debt from China that
is partially repayable with oil shipments. Although the
Moreno suspended his vice president, Jorge Glas, for
politically significant indigenous population initially
alleged corruption. Glas was another former Correa vice
president who remained close to the former leader. In
supported Correa (see Figure 1), this support dwindled as
December 2017, Glas was convicted of taking $13.5 million
Amazon and highland indigenous areas were threatened by
resource exploitation and infrastructure development.
in bribes from Odebrecht, a Brazilian construction firm at
Ecuador is one of the world’s most biodiverse nations, with
the center of corruption prosecutions throughout Latin
America, while serving as head of Ecuador’s state oil
protected areas encompassing 25% of the country.
company. In January 2018, Ecuador’s legislature
The Moreno Administration Through 2020
impeached Glas, who began a six-year prison sentence that
President Moreno has chosen not to run in national
was upheld on appeal in October 2019.
elections scheduled for February 2021 and is to conclude
In February 2018, Moreno organized a successful
his presidency in May 2021 after a single term. His efforts
to improve trade with the United States and renew other
referendum that prohibited indefinite reelection and adopted
bilateral ties have been met with public skepticism. In
other measures to counter public corruption. The
addition, Moreno’s govern
referendum also drove a wedge between AP factions
ment has been challenged by the
aligned with Moreno and those loyal to Correa, who would
fallout of the Coronavirus Disease 2019 (COVID-19)
pandemic. The outbreak, combined with a halting economic
be prohibited from returning to office. The former president
recovery, has taken a toll on Moreno’s public standing. His
campaigned against the referendum, which he characterized
as a ploy to diminish his achievements. (However, in April
approval ratings are among the lowest in the region at 7%,
2020, Correa was convicted of corruption and sentenced in
according to numerous polls . At the same time, many
analysts credit President Moreno for making major efforts
absentia, as he currently lives in Europe).
to curb corruption, open and liberalize trade, and strengthen
Although Ecuadorian voters approved Moreno’s
referendum measures, Correa convinced more than one-
https://crsreports.congress.gov
Ecuador: An Overview
third of the 74 AP legislators to join a splinter party,
contest between two leading candidates proposing starkly
Revolución Ciudadana (RC). The party split weakened
different governing strategies: Guillermo Lasso of the
President Moreno’s support in Ecuador’s 137-member
center-right Movimiento CREO, who favors continuing to
unicameral National Assembly, requiring him to put
liberalize trade, and Andrés Arauz of the leftist party
together coalitions to pass his legislative proposals.
faction loyal to former president Correa, now in a leftist
Nevertheless, in December 2020, Moreno secured the
coalition called UNES. Yaku Pérez from the indigenous
passage of an anti-corruption law intended to impose new
party, Pachakutik, linked to the 2019 anti-austerity protests,
controls on public procurement and private sector
also could win broad support. Whoever takes power in May
corruption. The law’s enactment is to allow the government
2021 likely will face a complex economic recovery and a
to access $2 billion of financing from the International
politically fragmented society. Polling in late 2020
Monetary Fund (IMF).
suggested many voters remain undecided.
Moreno pledged to cut government bureaucracies, eliminate
U.S.-Ecuadorian Relations
offices, and reduce the size of what some view as a bloated
Although the United States traditionally had close relations
public sector. He also proposed tax incentives to encourage
with Ecuador, the relationship grew strained under
a more business-friendly environment, along with efforts to
President Correa due to his populist governing style and
assist the poor. In March 2019, he reached an agreement
“anti-imperialist” stance. Friction between the two
with the IMF for a $10.3 billion loan over three years.
countries led to Ecuador’s expulsion of the U.S.
However, removal of fuel subsidies and other economic
ambassador in 2011. Tensions escalated after Correa
reforms required to meet IMF conditions led to an outbreak
granted WikiLeaks founder Julian Assange asylum in
of extended protest and vandalism in October 2019.
Ecuador’s London embassy. In 2014, Correa refused to sign
Moreno’s government imposed a 60-day suspension on
agreements allowing the U.S. Agency for International
mass gatherings, which it later cut in half. According to
Development (USAID) to continue its work in Ecuador.
press reports, some 10 people died in the violence, and
human rights advocates accused security forces of using
Under President Moreno, rebuilding relations with the U.S.
excessive force to quell the protests.
government has been a top priority. In May 2019, the
USAID Administrator signed a memorandum to restart its
President Moreno upheld his campaign promise to modify
programs in Ecuador. The USAID mission reopened in late
the country’s controversial 2013 communications law. The
2020, with a focus on supporting Ecuador’s efforts to
law had defined communications as a public service, giving
rebuild democratic institutions, protect the environment,
the government under President Correa broad authority to
and create economic opportunities. U.S.-Ecuadorian
regulate media content and to investigate and sanction
counternarcotics collaboration also has increased. As a
journalists. The amendments that reined in government
result of this enhanced cooperation, U.S. bilateral aid to
powers passed the National Assembly in 2018 and went
Ecuador increased from less than $2 million in FY2018 to
into effect the following year. In April 2019, several
an estimated $19.5 million in FY2020.
government agencies moved to establish a national
Committee for the Protection of Journalists. According to
The U.S. government has provided additional assistance to
the State Department’s human rights report released in
Ecuador to help the country manage an influx of
2020, the committee helped reduce attacks on journalists.
Venezuelans and the ongoing impacts of the COVID-19
pandemic. In FY2020, the United States provided $75.3
Pandemic and Its Economic Consequences
million in humanitarian assistance to support more than
Unlike the favorable international economic conditions
400,000 Venezuelan refugees and migrants sheltering in
Ecuador enjoyed during the Correa era, President Moreno
Ecuador, as well as host communities. The United States
faced a crash in global oil prices and, in 2020, a severe
also provided Ecuador with $18 million of health and
pandemic-induced recession. According to the IMF,
humanitarian assistance and 250 ventilators to support the
Ecuador’s growth slowed to 1.2% in 2018 and near zero in
country’s pandemic response.
2019. In October 2020, the IMF forecast a deep contraction
of 11% for the year (although Ecuador’s government
In addition to increasing assistance to Ecuador, the Trump
estimates it will be closer to 9.5%).
Administration sought to strengthen the bilateral trade
relationship. During Vice President Mike Pence’s 2018 visit
Ecuador has managed to plug a large fiscal deficit with
to Ecuador, the countries reactivated a bilateral trade and
credits and deferrals. For example, to combat the pandemic-
investment council. In December 2020, the United States
related recession, Ecuador secured an IMF front-loaded
and Ecuador signed a first-phase trade agreement. The
extended fund facility dispersal of $6.5 billion over 27
Protocol on Trade Rules and Transparency includes
months in late September 2020. Analysts forecast austerity
provisions intended to benefit small- and medium-sized
measures required by the IMF could again fuel public
businesses, bolster trade and investment flows, and increase
discontent. Some predict economic growth may not return
transparency, according to the U.S. Trade Representative.
to 2019 levels until 2024.
The United States was Ecuador’s largest trading partner in
2019, accounting for more than 26% of total trade, followed
February 2021 Elections
by China.
Although the National Election Council has registered 16
presidential candidates for the election scheduled for
For additional background, see CRS Report R44294,
February 7, 2020, several analysts forecast it may be a
Ecuador: In Brief.
https://crsreports.congress.gov
Ecuador: An Overview
IF11218
June S. Beittel, Analyst in Latin American Affairs
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https://crsreports.congress.gov | IF11218 · VERSION 3 · UPDATED