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Agenda Cultural Ecuador

Economy in Ecuador
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Table of Contents:
Historical Summary of the Ecuadorian Economy
Most important economic cities
Principal Products for export

A road filled with potholes is an apt way to describe the economic history of Ecuador. Ecuadorians have enjoyed many eras of prosperity and suffered eras of crisis.


Thanks to the fertility of our soils, we have been able to grow products like cacao, banana, rubber and other products that in agreement with difficult periods for the rest of the world, have been highly valued products.

The chocolate, banana and most recently, oil booms provided income that was taken advantage of or wasted-- depending on the use the government of the time put the money to.

For internal consumption, food has never lacked. Ecuadorians, even the most poor rarely go hungry. Things turned sour, however, when trying to meet foreign demand. To meet external demand, Ecuadorians borrowed money to improve production. However, this money was not used wisely by corrupt and incompetent officials. Ecuador was left without a thriving industry and in debt to foreign banks.

Historical Summary of the Ecuadorian Economy
The cacao boom allowed the economy of Ecuador to grow during the last years of the 18th century up to 1925. During this period, Ecuador was the first exporter of cacao in the world and covered 25% of the world demand during the first decade of the 20th century. The chocolate boom allowed the creation of a banking system inEcuador and encouraged the arrival of European investors.

When the First World War began, however, the exportation of cacao decreased significantly. A major contributing factor to the decline was the competition from the European colonies in Africa that began to produce cacao as well.

In the decade of 1960, oil exploration began in the Ecuadorian Amazon and converted Ecuador into a wealthy country compared to the rest of Latin America. Foreign investments quickly arrived and Ecuador grew economically over the next twenty years. The oil boom allowed the country to modernize more quickly than during the past 100 years.

Since 1982, however, the international price of oil has decreased and Ecuador has suffered an economic downfall. Part of that downfall stems from the economic debt amassed by the ineptitude and corruption of Ecuador's military leaders. The debt falls harshly on the backs of Ecuador's most needy citizens who have to deal with a decrease in basic services such as education and health. A fin de siecle banking scandal further decimated the economy as private accounts simply vanished with the failed banks. In an effort to stabilize the economy and halt the slide of the plummeting sucre (Ecuadorian money), Ecuador decided to adopt the dollar as its the official currency in 2001.

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