Ecuador: Country Overview and U.S. Relations

link to page 1



Updated January 24, 2024
Ecuador: Country Overview and U.S. Relations
Ecuador is an ethnically and geographically diverse country
Noboa’s center-right ADN, and the right-wing Social
of 18.3 million people encompassing portions of South
Christian party. This legislative alliance may enable Noboa
America’s Pacific coast, Amazon Basin, and Andean
to enact policies intended to restore public security and
highlands. Ecuador’s strategic port city of Guayaquil has
continue Ecuador’s post-pandemic recovery.
become a major hub for trafficking cocaine from
neighboring Colombia and Peru, the world’s largest cocaine
Figure 1. Ecuador at a Glance
producers (see map, Figure 1). Ecuador faces an acute
security crisis, as gangs have increasingly fought for control
of drug trafficking routes and prisons and have assassinated
politicians. Some Members of Congress have expressed
concern about the deteriorating security climate in Ecuador,
a key U.S. regional partner. Congress enacted a framework
to deepen economic and other bilateral ties with Ecuador in
2022 and may consider legislation to provide additional
trade preferences for Ecuador.
Current Political Conditions
President Daniel Noboa took office on November 23, 2023,
to complete the term of his predecessor, Guillermo Lasso
(2021-2023), who had called Ecuador’s first-ever snap
general elections. Lasso had pushed for market-friendly
political and economic reforms but faced opposition from

the country’s powerful Indigenous movements and a
Sources: World Factbook (CIA), International Monetary Fund (IMF);
Ecuador’s National Institute of Statistics and Censuses (NISC); Trade
divided legislature dominated by leftist parties that had
Data Monitor (TDM).
repeatedly tried to impeach him. The 2023 elections were
marred by the assassination of one of the presidential
Security Crisis
candidates and other political figures, allegedly by
organized crime groups.
Ecuador has seen a sharp rise in violence over the past four
years, attributable primarily to power struggles among
In mid-October 2023, Noboa won a second-round runoff
gangs affiliated with transnational criminal organizations,
with 52% of the vote, defeating Luisa Gonzales, an ally of
including Mexican cartels and the Albanian mafia, battling
former leftist populist president Rafael Correa (2007-2017).
for control of drug trafficking routes and infrastructure,
Noboa is the head of a center-right, pro-business party,
such as ports. The homicide rate nearly doubled from 2021
National Democratic Action (ADN by its Spanish
to 2022, reaching almost 26 per 100,000 persons, a rate on
acronym). He is a 36-year-old former corporate executive
par with Colombia and Mexico. Some observers estimate
and scion to a banana fortune. Voters also reelected about
that the rate exceeded 44 per 100,000 in 2023, which would
30% of National Assembly members and approved by large
be among the highest rates in Latin America. In response,
margins national and regional referenda to halt oil and
President Lasso declared multiple states of emergency but
mineral extraction in two ecologically sensitive regions.
failed to quell the violence. High-fatality prison riots due to
President Noboa and the newly elected legislators are to
gang rivalries plagued Lasso’s years in office. Criminal
serve until May 2025.
organizations are alleged to have widely corrupted public
officials, judges, police, military, and corrections personnel.
The new 137-member unicameral National Assembly was
seated on November 17. The Correa-linked Citizens
In early 2024, President Noboa began to unveil his anti-
Revolution party (RC by its Spanish acronym) won the
crime strategy, known as Plan Phoenix. On January 7, the
most seats (51), followed by the anti-corruption Build
leader of Ecuador’s largest gang, Los Choneros, escaped
Ecuador Movement (26), the conservative Social Christian
before the government could move him to a more secure
Party and allies (18), and the ADN (14). Indigenous party
prison. The next day, President Noboa declared a 60-day
representation, which had been significant, declined. (Party
state of emergency and national curfew. Rivals to Los
affiliation is fluid, so seat allocation may change over time.)
Choneros coordinated lethal uprisings in seven prisons in
which some 200 prison guards were taken hostage. Armed
Unlike President Lasso, whose minority government was
men occupied a major television network during a live
challenged by highly disruptive protests and impeachment
broadcast. This was followed by a wave of car bombs,
attempts, President Noboa quickly forged a large legislative
police kidnappings, and other violence across the country,
majority. His loose coalition includes the left-wing RC,
which appeared to be a politically motivated effort by
https://crsreports.congress.gov

Ecuador: Country Overview and U.S. Relations
criminal groups to discredit Noboa’s policies. President
governance in Ecuador and increase bilateral security
Noboa declared a state of internal armed conflict that
cooperation and economic and commercial ties.
named 22 criminal groups as terrorists and ordered
Ecuador’s armed forces to “neutralize” the named groups.
The Biden Administration requested $45.7 million in
bilateral foreign assistance to support governance,
Noboa’s Plan Phoenix is a long-term effort to improve
economic development, and security efforts in Ecuador in
intelligence systems, expand the military’s role in fighting
FY2024. The FY2024 request includes $27.0 million in
crime, and regain control in the prisons. Some critics argue
Development Assistance, $13.3 million for International
it emulates El Salvador’s militarized anti-crime model
Narcotics Control and Law Enforcement programs, $5.0
associated with reduced violence but increased human
million in Foreign Military Financing, and $292,000 for
rights abuses. A constitutional change to allow the military
International Military Education and Training. Other U.S.
to fight crime with the police, along with other security-
funding provides humanitarian assistance to, and supports
focused measures, is slated for a referendum later in 2024.
the integration of, the estimated 475,000 Venezuelan
Economic Background
migrants and refugees in Ecuador. In May 2023, the U.S.
International Development Finance Corporation helped
During his decade in power, populist President Correa
Ecuador conclude the world’s largest “debt-for-nature”
brought some stability to Ecuador’s tumultuous political
swap, reducing Ecuador’s debt service costs by $1.1 billion
scene. He presided over a public investment-driven
while generating funding for marine conservation efforts in
economic expansion, with growth averaging 5% annually
the Galápagos Islands and maritime reserve.
from 2010 to 2014. Correa used that economic growth to
increase social expenditures and reduce poverty. However,
The Biden Administration has expanded its security
his policies left Ecuador with significant debt to China and
cooperation and assistance to Ecuador in response to the
more dependent on revenue from petroleum extraction.
deteriorating security climate. In mid-2023, the two
countries launched the U.S.-Ecuador Defense Bilateral
The impact of the Coronavirus Disease 2019 (COVID-19)
Working Group and signed a memorandum of
pandemic and a crash in global oil prices drove Ecuador
understanding to strengthen the capabilities of the
into a deep recession. In 2020, the economy contracted by
Ecuadorian armed forces. In December 2023, the Biden
nearly 8% and the poverty rate climbed to an estimated
Administration was reportedly planning to provide $200
33%. The economy recovered in 2021, growing by 4.2%
million in military equipment and other security assistance
(driven, in part, by rising oil prices) before moderating to
to Ecuador. In a January 2024 statement condemning
2.9% growth in 2022. Growth dropped to an estimated
“narco-criminal violence in Ecuador,” the U.S. State
1.4% in 2023, according to the IMF, amid tightening global
Department offered a range of technical assistance.
financial conditions, domestic turbulence, and drought that
hobbled hydropower generation, Ecuador’s leading
U.S.-Ecuador goods trade totaled $17.5 billion in 2022.
domestic electricity source. Some observers forecast the
According to the Central Bank of Ecuador, the United
2023 referenda limiting oil and mineral extraction could
States remained Ecuador’s largest trade partner. However,
reduce foreign investment and hamper economic growth.
in 2022, China exceeded the United States in non-oil trade
for the first time. The Lasso government had advocated for
President Noboa gained legislative backing for proposed
a U.S.-Ecuador free trade agreement (FTA), building on a
tax and energy reforms during his initial months in office.
2020 first-phase limited trade agreement. The Biden
In late 2023, the National Assembly passed his tax reform
Administration has not expressed support for an FTA but
intended to incentivize payment of back taxes, encourage
has welcomed Ecuador’s participation in the Americas
firms to hire younger workers (in part to reduce criminal
Partnership for Economic Prosperity initiative, an effort to
recruitment), and provide tax rebates to the construction
foster regional competitiveness and inclusive growth.
sector. The National Assembly also approved Noboa’s
Ecuador announced FTA negotiations with China in 2022
energy reform intended to improve efficiency and foster
and signed an agreement in May 2023, though it has yet to
private investment in electricity generation and distribution.
be ratified. Two bills introduced in the 118th Congress (S.
U.S.-Ecuador Relations
913 and H.R. 6414) would make Ecuador eligible for
designation as a beneficiary country under the Caribbean
Although the United States traditionally had close relations
Basin Economic Recovery Act, potentially giving the
with Ecuador, former President Correa’s populism and self-
country access to certain unilateral U.S. trade preferences.
styled “anti-imperialist” policies increased friction. Among
other actions, Correa shut down U.S. counterdrug
In addition to considering foreign assistance appropriations
operations at Manta Air Force Base in 2009 and expelled
and trade legislation, Congress may monitor conditions in
the U.S. ambassador in 2011. Closer bilateral relations
Ecuador and their implications for U.S. policy objectives.
resumed under Correa’s successors, Presidents Lenín
Among other issues, some Members of Congress have
Moreno (2017-2021) and Lasso. President Noboa appears
expressed interest in helping Ecuador address security
eager to deepen security cooperation and other U.S. ties.
challenges without contributing to human rights abuses,
reducing irregular migration from Ecuador while providing
President Biden signed the United States-Ecuador
legal pathways for migrants, limiting China’s influence in
Partnership Act of 2022 on December 23, 2022, as Title
Ecuador, and protecting Ecuador’s Amazon and Indigenous
LV, Subtitle B of the James M. Inhofe National Defense
communities.
Authorization Act for Fiscal Year 2023 (P.L. 117-263). It
includes measures intended to strengthen democratic
June S. Beittel, Analyst in Latin American Affairs
https://crsreports.congress.gov

Ecuador: Country Overview and U.S. Relations

IF11218
Ramon Miro, Analyst in Latin American Affairs


Disclaimer
This document was prepared by the Congressional Research Service (CRS). CRS serves as nonpartisan shared staff to
congressional committees and Members of Congress. It operates solely at the behest of and under the direction of Congress.
Information in a CRS Report should not be relied upon for purposes other than public understanding of information that has
been provided by CRS to Members of Congress in connection with CRS’s institutional role. CRS Reports, as a work of the
United States Government, are not subject to copyright protection in the United States. Any CRS Report may be
reproduced and distributed in its entirety without permission from CRS. However, as a CRS Report may include
copyrighted images or material from a third party, you may need to obtain the permission of the copyright holder if you
wish to copy or otherwise use copyrighted material.

https://crsreports.congress.gov | IF11218 · VERSION 14 · UPDATED