Ecuador

D

Manufacturing

Traditionally, Ecuadorian industry was confined to the manufacture of goods for local consumption. Under the industrial development law, production plants were established for the manufacture of food products, petroleum products, textiles and clothing, metalworking, paper products, wood products, chemicals, plastics, and pharmaceuticals. Despite government efforts to decentralize industrial production, Ecuador’s industry remains concentrated in the cities of Quito and Guayaquil. In 2005 manufacturing accounted for 9 percent of the GDP.

E

Energy

Ecuador has great potential for producing hydroelectricity, and 63 percent of its electricity is generated in hydroelectric facilities. Almost all the rest is produced in thermal plants burning coal or petroleum products.

F

Currency and Banking

In March 2000 the government changed the basic unit of currency in Ecuador from the sucre to the United States dollar, with the exchange rate set at 25,000 sucres to the dollar. The change to the dollar helped stabilize Ecuador’s economy and reduce the extremely high inflation rates of the 1980s and 1990s. The Central Bank of Ecuador (1927) is the bank of issue, and the country is served by several domestic commercial banks as well as offices of foreign banks.

G

Foreign Trade

The value of Ecuador’s yearly exports is generally somewhat higher than the cost of its imports. In 2003 the country’s exports earned $6 billion and its imports cost $6.5 billion. Export earnings from food products such as shrimp, cacao, and coffee accounted for 41 percent of the total, with 43 percent coming from sales of fuels, principally petroleum. Major imports included transportation equipment, machinery, metal, chemicals, and foodstuffs. The United States is by far the leading trade partner of Ecuador; considerable commerce also is conducted with other countries in Central and South America and several European countries.

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Ecuador, along with Bolivia, Colombia, Peru, and Venezuela, is a founding member of the Acuerdo de Cartagena (Cartagena Agreement), also known as the Andean Group. The group works toward common policies on energy, tariff reduction, industrial and agricultural development, political cooperation, improved internal and international trade, and the creation of a common market. Ecuador is also a founding member of the Latin American Free Trade Association (LAFTA) which was replaced in 1980 by the Latin American Integration Association (LAIA). The LAIA aims to improve the economic and social conditions in member countries by improving trade within the group, which includes most of the countries in South America. Ecuador was a member of the Organization of Petroleum Exporting Countries (OPEC) from 1973 to 1992. It withdrew from OPEC to avoid limitations on production imposed by that group.

H

Transportation

Air transportation and highways have done much to foster national integration and to help diminish Ecuador’s international isolation. The road system of Ecuador comprises 43,197 km (26,841 mi) of roads, of which only about one-sixth are paved. The Pan-American Highway runs through the country from north to south. The road system was nearly doubled during the 1970s and early 1980s, opening new lands for agriculture and settlement in the coastal regions. Today, the road system is best near the coast where major roadwork followed flooding in the late 1990s. The nationalized railroads transport freight and passengers over 960 km (600 mi) of track. The government has introduced plans to privatize the railroads.

Ecuador has several seaports. Guayaquil, the main port, is connected by air and rail to the major cities and handles much of the country’s nonpetroleum trade. The port of Esmeraldas services the oil industry. Other ports include Manta, important for coffee and cocoa exports; Puerto Bolívar, important for banana exports; and La Libertad. Many rivers, including the Guayas, Daule, and Vinces, have been dredged and are now navigable. International airports are located near Quito and Guayaquil.

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