Ecuador
The "Republic of the Equator" was one of three countries that emerged from the collapse of Gran Colombia in 1830 (the others being Colombia and Venezuela). 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.
Ecuador is experiencing difficult economic and political conditions. In the wake of spiraling inflation rates, a currency collapse, a banking crisis, and social unrest in 1998-1999, then-President Mahuad announced plans for dollarization in mid-January 2000. Indigenous groups opposed to Mahuad's economic plans allied with the military, which opposed Mahuad's resolution to a long-standing territorial dispute with neighboring Peru, to force Mahuad out of office in late January 2000.
Former coup leader Lucio Gutierrez won the runoff vote in presidential elections in November 2002, riding a wave of support from the impoverished indigenous community who liked his promises to end corruption and to fight for social justice. But after three years in office, public support for the president slumped, with indigenous leaders expressing anger over a squeeze on public spending and opposition politicians calling for his resignation over a corruption scandal. On taking office, Gutierrez was faced with a massive public debt, poverty running at around 60% and high expectations from his supporters. He embarked on a fiscal and structural reform program in order to improve economic growth in Ecuador, as well as to lower the country's external debt. In March 2003, the IMF approved a $205 million stand-by agreement with Ecuador.
Amid escalating street protests precipitated by growing criticism of Gutiérrez's Supreme Court appointments, Congress removed him from office and former Vice President Alfredo Palacio assumed the presidency on April 20, 2005. Gutiérrez was the third Ecuadoran president to be forced from power in eight years. The unrest began when Gutiérrez replaced the Supreme Court -- which he alleged was biased against him -- in late 2004. Protests escalated when the new court dropped corruption charges against two former presidents.
On taking office, President Palacio ordered the arrest of his predecessor over a violent crackdown on protests in the capital. Gutiérrez said his removal had been unconstitutional; he was granted political asylum in Colombia. He was detained for a time after returning from exile in Colombia in October 2005.
Palacio, who has no political base, says he wants to reform Ecuador's political system. In October 2005, legislators called for Palacio's resignation and moved to block his attempt at constitutional reform. They accused Palacio of breaking the law by bypassing Congress to directly ask the Electoral Tribunal to approve the constitutional referendum. The Supreme Electoral Court also blocked the referendum, sparking demonstrations in Quito, Guayaquil and other areas; protesters demanded the dismissal of congressmen. In November, activism groups that had supported Palacio's intended reforms withdrew their support (alleging that he failed to fulfill campaign promises).
His administration has also been dogged by strikes and protests in the oil industry, and by stiff opposition to a planned free-trade agreement with the US.
Presidential elections were held on October 15, 2006. As there was no clear winner a run-off vote is to be held in November.
Ecuador’s economy relies heavily on petroleum production. In 2004, Ecuador's oil sector accounted for about one-third of the government’s revenue and 40% of export earnings. This reliance on oil exports makes Ecuador's economy vulnerable to fluctuations in world oil prices. High oil prices in 2004-05 are helping Ecuador recover from an economic crisis. In 2005, Ecuador's economy is expected to rebound, expanding up to 3%.
Recent high oil prices also have allowed state-owned oil company Petroecuador to record an estimated net profit of $1.8 billion in 2003, despite continuing decline in production from state-operated fields. It remains unclear, however, whether Petroecuador will be able to reverse this trend, particularly since the government has cut the company's exploration and production budget in order to comply with country’s International Monetary Fund (IMF) fiscal commitments.
Political demonstrations occur sporadically in urban areas, usually to protest the government's handling of the economy, as well as intended constitutional reforms. Past demonstrations have been marked by burning tires, blocked streets, and Molotov cocktails. Handguns have been fired into the air, and occasionally at the police, during demonstrations. The police generally respond by using water cannons and tear gas. Public transportation tends to be disrupted during these incidents. Protesters also sometimes block rural highways. Travelers should avoid areas where demonstrations are taking place and keep informed by following the local press and radio and TV news, and consulting hotel personnel and tour guides.
While travel to Quito is generally safe, travel should be avoided to the northeast border regions of Ecuador. Colombian terrorist and organized crime groups are active in Carchi, Orellana, Sucumbios and Napo provinces in northeast Ecuador, bordering Colombia and Peru. A number of foreign workers have been kidnapped and in August 2003 one foreigner, reported kidnapped in December 2002, was found dead.
In Quito, travelers should be particularly alert on the crowded streets of south Quito, at the Panecillo, in Old Quito and in the areas of El Tejar, Parroquia San Sebastian, Avenida Cristobal Colon and Gonzalez Suarez. The popular Mariscal Sucre entertainment district has also experienced increases in crime.
The city of Guayaquil has experienced a dramatic increase in kidnappings for ransom, often in connection with carjackings. Travelers are advised to be observant of their surroundings, particularly in the restaurant district of Urdesa.
Hiking to the antennas of Volcan Pichincha via Cruz Loma, west of Quito is unwise as violent gangs are known to operate in the wooded areas.
There have been recent disruptions to tours of the Galapagos Islands due to disputes between the Park services and the local authorities. The situation in the Galapagos Islands has now normalized, but the underlying issues have not been fully resolved.
In March 2004, the southern province of El Oro underwent a period of social unrest as a result of striking banana workers.
