Economy Of Ecuador

The economy of Ecuador holds a significant position within Latin America, ranking as the eighth largest in the region and standing as the 69th largest economy worldwide when measured by total gross domestic product (GDP). This ranking reflects Ecuador’s moderate scale in the global economic landscape, underscoring its role as a mid-sized emerging market with considerable regional influence. The country’s economic structure is predominantly anchored in the export of natural resources and agricultural commodities, which form the backbone of its foreign exchange earnings and fiscal revenues. Key export products include petroleum, bananas, shrimp, gold, and various other primary agricultural goods, while remittances from Ecuadorian emigrants working abroad also contribute a notable share to the national income. In 2017, remittances sent by Ecuadorians living and working overseas accounted for approximately 2.7% of the country’s GDP, illustrating the importance of the diaspora in supporting domestic consumption and investment. These funds often serve as critical financial inflows for many Ecuadorian households, supplementing income and fostering economic stability at the microeconomic level. The overall trade volume in the same year represented about 42% of Ecuador’s GDP, indicating a relatively open economy with a substantial degree of integration into international markets. This trade openness underscores the country’s reliance on both exports and imports, reflecting its participation in global value chains and its vulnerability to external economic fluctuations. Ecuador’s dependence on petroleum resources remains a defining characteristic of its economy. In 2017, oil constituted roughly one-third of public-sector revenue, highlighting the sector’s pivotal role in financing government expenditures and public services. Additionally, petroleum accounted for 32% of the country’s export earnings, reaffirming its critical position in generating foreign currency and sustaining the balance of payments. Despite this dependence, Ecuador’s oil production has experienced fluctuations over time, influenced by both domestic policy decisions and global market dynamics. Historically, Ecuador was a member of the Organization of the Petroleum Exporting Countries (OPEC), a cartel that coordinates oil production policies among member states to influence global oil prices. However, in recent years, Ecuador’s membership status changed, and by 2017, it was among the smallest producers within OPEC, with an output of approximately 531,300 barrels of petroleum per day. This relatively modest production volume reflected both the country’s limited reserves compared to larger producers and its strategic considerations regarding oil exploitation. Beyond petroleum, Ecuador has established itself as a global leader in agricultural exports, particularly in the banana industry. It is recognized as the world’s largest exporter of bananas, with export revenues reaching $3.38 billion in 2017. This dominant position is supported by favorable climatic conditions, extensive cultivation areas, and well-developed export infrastructure. The banana sector not only generates significant foreign exchange but also provides employment for a substantial portion of the rural population. Similarly, Ecuador is a major exporter of shrimp, with shipments valued at $3.06 billion in 2017. The aquaculture industry has expanded rapidly over recent decades, driven by advances in farming techniques and strong international demand, particularly from markets in the United States, Europe, and Asia. In addition to traditional exports, Ecuador has seen growth in non-traditional sectors, signaling a degree of diversification in its export base. For example, exports of cut flowers reached $846 million in 2017, reflecting the country’s ability to capitalize on niche markets with high value-added products. The floriculture industry benefits from Ecuador’s diverse climates and altitudes, which allow for year-round production of a wide variety of species. Furthermore, canned fish exports amounted to $1.18 billion in 2017, demonstrating the expansion of processed food industries and the country’s efforts to move beyond raw commodity exports. These developments indicate a gradual shift towards more sophisticated production and export activities, which can help stabilize the economy against commodity price volatility. Historically, Ecuador’s economy was heavily reliant on primary industries such as agriculture, petroleum extraction, and aquaculture. These sectors formed the economic foundation for much of the country’s development throughout the 20th century, shaping its labor markets, trade patterns, and fiscal policies. However, over time, economic development strategies have sought to diversify the productive base by promoting other sectors. Textile manufacturing, processed food industries, metallurgy, and various service sectors have grown in importance, driven by changes in global market demands and technological advancements. This diversification has been encouraged by government policies aimed at reducing vulnerability to external shocks and fostering sustainable growth through innovation and value addition. Between 2006 and 2014, Ecuador experienced robust economic growth, with its GDP expanding at an average annual rate of 4.3%. This period of growth was largely fueled by high oil prices, which boosted export revenues and government income, enabling increased public investment and social spending. Additionally, external financing, including loans and foreign direct investment, contributed to the country’s economic expansion by providing capital for infrastructure projects and industrial development. However, this growth trajectory slowed markedly from 2015 to 2018, with GDP growth averaging only 0.6% per year. The deceleration reflected a combination of factors, including declining oil prices, reduced external financing, and structural challenges within the economy. This slowdown underscored the risks associated with heavy dependence on commodity exports and the need for further economic diversification. In response to these challenges, significant policy shifts were undertaken under the administration of ex-president Lenín Moreno, who assumed office in May 2017. Moreno initiated a radical economic transformation aimed at increasing the role of the private sector in the economy, particularly within the oil industry. This approach marked a departure from previous state-led models, emphasizing market-oriented reforms, improved regulatory frameworks, and greater openness to private investment. The strategy sought to enhance efficiency, attract capital, and stimulate productivity in key sectors, thereby fostering more sustainable and inclusive economic growth. These reforms were part of a broader effort to modernize Ecuador’s economy, reduce fiscal imbalances, and position the country more competitively within the global marketplace.

Ecuador holds a prominent position in the global agricultural landscape, ranking among the top ten producers of several key commodities including bananas, cocoa, and palm oil. This status underscores the country’s vital role in international agricultural markets, where its exports significantly influence global supply chains and trade dynamics. The agricultural sector in Ecuador is characterized by a diverse range of crops, with production volumes that reflect both the country’s favorable climatic conditions and its strategic focus on cultivating high-demand products. In 2018, Ecuador’s agricultural output demonstrated considerable scale and variety, beginning with sugarcane, a crop of considerable economic importance. The country produced approximately 7.5 million tons of sugarcane that year, positioning it as a major producer within the global sugar industry. Sugarcane cultivation in Ecuador benefits from the tropical climate and fertile soils found in the coastal regions, which provide ideal conditions for high yields. This production volume not only supports domestic sugar consumption but also feeds into the country’s sugar refining and ethanol industries, contributing to both food processing and biofuel sectors. Banana production in Ecuador has historically been a cornerstone of the agricultural economy, and in 2018, the country produced around 6.5 million tons of bananas. This output ranked Ecuador as the sixth largest banana producer worldwide, a status that reflects the crop’s importance as a key export commodity. The banana industry in Ecuador is supported by extensive plantations primarily located in the coastal provinces, where the climate and soil conditions are particularly conducive to banana cultivation. Recent trends indicate a continued increase in banana production, with annual volumes rising to approximately 7 million tons. By 2023, production figures reached about 7.16 million tons, demonstrating sustained growth in this sector. This upward trajectory highlights the ongoing expansion and modernization of banana plantations, as well as improvements in agricultural practices and export logistics. Palm oil production also constitutes a significant segment of Ecuador’s agricultural output. In 2018, the country produced approximately 2.7 million tons of palm oil, ranking it as the sixth largest producer globally. The expansion of palm oil cultivation in Ecuador has been driven by both domestic demand for edible oils and the growing international market for biofuels and processed foods. Palm oil plantations are predominantly located in the coastal and Amazonian regions, where the humid tropical environment supports the growth of oil palm trees. The development of this sector has involved efforts to increase yield efficiency and implement sustainable practices to mitigate environmental concerns associated with palm oil production. Cereal cultivation forms another important component of Ecuador’s agricultural profile. In 2018, the country produced roughly 1.3 million tons of maize and an equal amount of rice, reflecting substantial domestic production of staple grains. Maize and rice are fundamental to the Ecuadorian diet and agricultural economy, with cultivation concentrated in various regions suited to each crop’s specific agronomic requirements. Maize is grown primarily in the highland and coastal areas, while rice production is concentrated in lowland floodplains and irrigated valleys. These cereals not only serve local consumption needs but also support livestock feed industries, thereby linking crop production with broader agricultural value chains. Potato production in Ecuador, though smaller in volume compared to staple grains, contributes to the diversity of the country’s agricultural sector. In 2018, potato output was approximately 269 thousand tons. The cultivation of potatoes is largely concentrated in the Andean highlands, where cooler temperatures and volcanic soils create optimal growing conditions. Potatoes are an important food crop for both rural and urban populations, and their production supports local markets as well as processing industries that produce chips, fries, and other potato-based products. Cocoa production is another critical agricultural activity in Ecuador, a country renowned for its fine-flavor cocoa varieties. In 2018, Ecuador produced approximately 235 thousand tons of cocoa, ranking it as the seventh largest cocoa producer globally. The nation’s cocoa sector is distinguished by the cultivation of Arriba Nacional cocoa, a variety prized for its unique aroma and flavor, which commands premium prices on the international market. Cocoa plantations are primarily located in the coastal provinces of Guayas, Manabí, and Los Ríos, where the humid tropical climate supports the growth of cacao trees. The cocoa industry plays a significant role in rural livelihoods and export earnings, with efforts underway to enhance productivity and promote sustainable farming practices. In addition to these major crops, Ecuador also produced about 149 thousand tons of pineapple and 103 thousand tons of oranges in 2018, alongside smaller quantities of other agricultural products. Pineapple cultivation is concentrated in the coastal regions, where the tropical climate and well-drained soils favor high-quality fruit production. Oranges, while produced in smaller volumes, contribute to the diversity of Ecuador’s fruit sector and are grown in various regions suited to citrus cultivation. These fruits support both domestic consumption and export markets, adding to the overall resilience and breadth of the agricultural economy. The recent increase in banana production to approximately 7 million tons annually, with 2023 figures reaching about 7.16 million tons, signals ongoing growth in one of Ecuador’s most important agricultural export sectors. This expansion reflects improvements in agricultural technology, pest and disease management, and export infrastructure, which collectively enhance productivity and market access. The sustained growth in banana production not only reinforces Ecuador’s position as a leading global supplier but also supports rural employment and foreign exchange earnings, underscoring the crop’s central role in the country’s agricultural economy.

In 2019, Ecuador’s annual production of antimony was approximately one ton, positioning the country as the 14th largest producer of this metal globally. Antimony, a metalloid used primarily in flame retardants, lead-acid batteries, and various alloys, has historically been a minor but strategically important component of Ecuador’s mining sector. Despite its relatively small volume compared to global leaders, Ecuador’s consistent output reflects the presence of exploitable antimony deposits within its mineral-rich geology, particularly in the Andean regions where hydrothermal veins and sedimentary deposits are common. The ranking as the 14th largest producer underscores Ecuador’s modest yet notable role in the international antimony market, which is dominated by countries such as China, Russia, and Bolivia. Gold production in Ecuador has experienced significant fluctuations over the past two decades, reflecting both the development of mining infrastructure and the exploration of new deposits. In 2006, Ecuador produced approximately 5.3 tonnes of gold, which placed it as the 34th largest gold producer worldwide at that time. This ranking demonstrated Ecuador’s emerging position in the global gold market, as the country began to capitalize on its mineral wealth following reforms in mining legislation and increased foreign investment. The 2006 output was derived from a combination of artisanal mining and more formalized operations, particularly in provinces such as Zamora-Chinchipe and Napo, where gold deposits are abundant in alluvial and primary vein formations. The country’s gold production saw a marked increase by 2013, reaching 8.6 tonnes, which represented the highest annual output recorded between 2006 and 2017. This peak was driven by the expansion of large-scale mining projects and improved extraction technologies, alongside heightened exploration activities that uncovered new reserves. The surge in production also reflected the government’s efforts to attract foreign mining companies through incentives and streamlined regulatory frameworks. The 2013 output not only signified a quantitative increase but also indicated qualitative improvements in mining efficiency and environmental management practices, as Ecuador sought to balance economic gains with sustainable resource use. Following the 2013 peak, gold production in Ecuador experienced a slight decline, with output recorded at 7.3 tonnes in 2017. Although this figure was below the previous high, it remained relatively stable and indicative of sustained mining activity across the country. The decrease can be attributed to a combination of factors, including fluctuating global gold prices, operational challenges at some mining sites, and evolving regulatory conditions that affected investment flows. Nonetheless, the 2017 production level maintained Ecuador’s relevance in the gold market, supporting local economies and contributing to export revenues. The persistence of gold mining activities during this period highlighted the sector’s resilience and the ongoing potential for growth through exploration and technological advancement. Silver production in Ecuador has traditionally been modest, with the country producing approximately one ton of silver in 2017. This output aligns with Ecuador’s typical average silver production, which has remained relatively stable over recent years. Silver deposits in Ecuador are often found in polymetallic veins associated with gold and copper mineralization, particularly in the northern and central highland regions. Although silver is not a primary focus of Ecuador’s mining industry, its production contributes to the overall value of mineral exports and supports the economic viability of polymetallic mining operations. The consistent silver output reflects the country’s geological endowment and the integration of silver recovery processes in existing mining facilities. A significant development in Ecuador’s mining sector occurred in 2019 with the discovery of a substantial deposit containing gold, silver, and copper in the northern region of the country. This find underscored Ecuador’s potential as a source of diverse and valuable mineral resources and attracted considerable interest from both domestic and international mining companies. The deposit’s polymetallic nature, combining precious metals with base metals, offers opportunities for integrated mining operations that can optimize resource extraction and economic returns. The northern region, characterized by complex geological formations and favorable tectonic settings, has long been recognized as a promising area for mineral exploration, and the 2019 discovery reinforced this perception. This new deposit is expected to contribute to the expansion of Ecuador’s mining sector, stimulate investment, and enhance the country’s position in the global minerals market.

Oil has historically played a pivotal role in Ecuador’s economy, accounting for approximately 40% of the country’s exports and serving as a fundamental component in maintaining a positive trade balance. Since the late 1960s, the exploitation of oil reserves has markedly increased production, transforming Ecuador from a primarily agricultural economy into a significant player in the global energy market. Early exploration and development efforts uncovered substantial reserves, which have been estimated at around 4.036 million barrels in earlier assessments. More recent evaluations as of 2023 indicate that Ecuador holds approximately 8.3 billion barrels of proven crude oil reserves, underscoring the country’s continued importance as an oil producer. This vast resource base has enabled Ecuador to leverage oil exports as a major source of foreign exchange earnings and government revenue, underpinning various public expenditures and economic initiatives. In 2022, crude oil constituted about 27% of Ecuador’s total export value, reflecting its sustained importance despite fluctuations in global oil prices and production levels. The country’s oil exports are diversified across several key international markets, including Latin America, North America, and Asia, which together absorb the bulk of Ecuadorian crude. The state-owned company Petroecuador plays a central role in the oil sector, overseeing exploration, production, and export activities. Petroecuador frequently collaborates with private and foreign firms through joint ventures and service contracts, combining state oversight with international expertise and investment. Looking forward, Ecuador has articulated ambitious plans to attract approximately $42 billion in foreign investments in the oil sector by 2029. These investments aim to boost production capacity, modernize infrastructure, and enhance the country’s competitiveness in the global oil market. However, the expansion of oil extraction has not been without controversy. Environmental and social concerns have emerged, particularly in the Amazon region, where oil drilling threatens biodiverse ecosystems and the livelihoods of Indigenous communities. The Yasuni National Park, one of the most ecologically rich areas in the Amazon, became a focal point of these concerns. In 2023, a national referendum resulted in a decision to halt oil drilling in Block 43 within Yasuni National Park, reflecting widespread public and Indigenous opposition to further resource exploitation in this sensitive area. This decision highlighted the tension between economic development objectives and environmental conservation priorities in Ecuador’s resource management policies. Agriculture remains a vital pillar of Ecuador’s economy, contributing significantly to the country’s export earnings. Ecuador holds the distinction of being the world’s largest exporter of bananas, with banana exports valued at approximately $2 billion. This sector not only supports a large portion of the rural population but also solidifies Ecuador’s position in global agricultural markets. In 2020, agricultural products accounted for about 41.1% of Ecuador’s total exports, underscoring the sector’s enduring economic importance. Beyond bananas, Ecuador exports a diverse array of agricultural commodities, including cut flowers, cacao, coffee, shrimp, wood, and fish. The country’s shrimp industry, in particular, has grown substantially, with Ecuador ranking among the top global exporters of farmed shrimp. Other significant agricultural exports include sugar cane, rice, cotton, corn, and palm, which benefit from the country’s varied climatic zones and fertile soils. Ecuador’s natural resource endowment extends beyond agriculture to include extensive forestry reserves. The country possesses large timber reserves comprising species such as eucalyptus and mangroves, which thrive in coastal and lowland areas. In the Sierra region, pines and cedars have been planted to support timber production, while walnuts and rosemary are also cultivated. The Guayas River Basin is notable for its production of balsa wood, a lightweight timber valued for its use in construction and crafts. These forestry resources contribute to both domestic industries and export markets, providing raw materials for wood products and supporting rural economies. Tobacco cultivation in Ecuador holds a unique place in the global cigar industry. The country’s prolonged cloud cover and rich volcanic soils create ideal conditions for growing shade tobacco, which is prized for its quality as cigar wrapper leaves. Ecuadorian Sumatra Tobacco, in particular, is renowned for its smooth texture and flavor, making it a sought-after component in premium cigars worldwide. This niche agricultural product has generated significant export revenues, with tobacco exports topping $70 million in 2018. The success of the tobacco sector illustrates Ecuador’s ability to capitalize on specialized crops that benefit from its diverse agroecological zones. The industrial sector in Ecuador is primarily concentrated in Guayaquil, the country’s largest industrial and business center, and Quito, the capital, which has experienced significant industrial growth in recent years. Guayaquil serves as a hub for manufacturing, processing, and commercial activities, benefiting from its strategic location as a port city. Quito’s industrial expansion reflects broader economic diversification efforts, with investments in infrastructure and human capital fostering the development of various manufacturing subsectors. The industrial sector mainly caters to the domestic market, producing a range of goods such as canned foods, liquor, jewelry, and furniture. While exports of processed products remain limited, these industries contribute to employment and value addition within the economy. Minor industrial activity is also present in Cuenca, a city known for artisanal crafts and small-scale manufacturing. Within the food processing industry, the dairy sector represents a notable component of Ecuador’s industrial landscape. Companies such as Tonicorp, which is owned by the Coca-Cola Company, play a significant role in the production and distribution of dairy products. The presence of multinational corporations in this sector highlights the integration of Ecuador’s food industry into global supply chains and the growing demand for processed food products domestically and regionally. The dairy industry benefits from Ecuador’s agricultural base, with local milk production supporting processing activities that range from fluid milk to cheese and yogurt products. Overall, Ecuador’s economy is characterized by a dynamic interplay between its rich natural resources and diversified agricultural and industrial sectors. The prominence of oil exports, combined with the country’s status as the world’s largest banana exporter and producer of various other agricultural commodities, underscores the multifaceted nature of its economic base. Simultaneously, ongoing efforts to attract foreign investment and balance environmental concerns reflect the challenges and opportunities facing Ecuador as it seeks sustainable economic growth.

As of December 2022, Ecuador’s electricity infrastructure featured a total installed generation capacity of 8,864 megawatts (MW), reflecting the country’s efforts to meet growing energy demands through a diversified portfolio of power sources. A significant portion of this capacity, amounting to 5,425 MW, was derived from renewable energy sources, underscoring Ecuador’s reliance on sustainable power generation methods. Within this renewable segment, approximately 5,200 MW originated specifically from hydropower, which is classified as renewable energy within the national framework due to the country’s abundant river systems and favorable topography. This dominant share of hydropower generation highlights Ecuador’s strategic utilization of its natural resources to produce clean electricity and reduce dependence on fossil fuels. The National Interconnection System (Sistema Nacional Interconectado, SNI), which serves as the backbone of Ecuador’s electricity grid, was capable of utilizing 7,472 MW of the total installed capacity. Of this, 4,375 MW came from renewable sources, indicating that a substantial portion of the country’s clean energy production was integrated into the national grid. However, not all installed capacity was connected to the SNI; approximately 1,390 MW remained outside the national grid, often associated with isolated or off-grid generation facilities. This separation reflects ongoing challenges in grid expansion and integration, particularly in remote or rural areas where extending transmission infrastructure may be economically or technically difficult. The National Transmission System (Sistema Nacional de Transmisión, SNT) operated at multiple voltage levels to efficiently transport electricity across the country. These voltage levels included 500 kilovolts (kV), 230 kV, and 138 kV, which allowed for the transmission of electricity over varying distances and load demands. The transmission network comprised 4,382 kilometers of single-circuit lines and an additional 2,462 kilometers of double-circuit lines, reflecting a comprehensive infrastructure designed to enhance reliability and capacity. The presence of double-circuit lines, which consist of two circuits on the same set of towers, improves redundancy and reduces the risk of outages by allowing alternative pathways for power flow in case of faults or maintenance activities. Ecuador’s electricity grid also featured international interconnections with neighboring countries, facilitating cross-border electricity trade and grid stability. These interconnections included two 230 kV Jamondino-Pomasqui double-circuit lines and a 138 kV Tulcán-Panamericana single-circuit line linking Ecuador with Colombia. Additionally, a 230 kV Machala-Zorritos double-circuit line connected the country with Peru. These cross-border links not only enable energy exchange but also contribute to regional integration efforts within the Andean electrical system, enhancing the resilience and flexibility of Ecuador’s power supply. Electricity distribution within Ecuador was managed by various distribution companies responsible for delivering power to end-users. The total billing for electricity distribution reached approximately 2 billion US dollars, reflecting the scale of the sector and its economic significance. Despite ongoing improvements, the electricity loss rate during distribution was reported at 13.25%, indicating that a notable portion of generated electricity was lost due to technical inefficiencies, theft, or other factors. This loss rate, while not uncommon in developing countries, highlighted areas for potential improvement in distribution efficiency and infrastructure modernization. As of December 2022, the distribution infrastructure encompassed 370 substations with a combined capacity of 8,545 megavolt-amperes (MVA), which served as key nodes for voltage transformation and power routing within the network. In addition to these, there were 67 sectioning substations designed to isolate faults and facilitate maintenance without widespread service interruptions. The distribution network itself was extensive, comprising 5,730 kilometers of subtransmission lines that carried electricity from transmission substations to distribution substations. Medium voltage lines extended over 111,276 kilometers, while low voltage lines covered 105,469 kilometers, collectively forming a vast grid that reached urban and rural consumers alike. Within the distribution system, there were approximately 360,000 transformers with a total capacity of 14,100 MVA, which played a critical role in stepping down voltage levels to safe and usable levels for residential, commercial, and industrial customers. The system also included 5.56 million electrical meters, facilitating accurate measurement and billing of electricity consumption. Coverage of the distribution network was extensive, reaching 97.4% of Ecuador’s population, which demonstrated significant progress in electrification and access to modern energy services across the country. Peak electricity demand on the SNI grid was recorded in April 2022, reaching 4,388 MW. This peak demand figure provided an important benchmark for grid operators and planners, indicating the maximum load that the system needed to accommodate to ensure reliable supply. Managing peak demand is critical for maintaining grid stability and avoiding blackouts, especially during periods of high consumption driven by factors such as seasonal weather variations or economic activity. Total electricity generation in Ecuador during 2022 amounted to 33 terawatt-hours (TWh), reflecting the overall energy output from all power plants connected to the grid and independent producers. Of this total, 87% was supplied by the SNI, indicating that the majority of electricity generation was integrated into the national grid and centrally managed. The remaining 13% of generation came from providers operating outside the grid, which often included isolated or self-generation facilities serving specific industrial or remote communities. The generation mix within the SNI revealed a strong dominance of hydroelectric power, which produced 24.6 TWh or 85.3% of the electricity generated within the grid. This reliance on hydropower underscored Ecuador’s commitment to renewable energy sources and its geographical advantage in harnessing river flows for electricity production. Fossil fuel-based generation accounted for 3.8 TWh, representing 13% of the grid’s output, highlighting the continued, albeit limited, role of thermal power plants in meeting demand. Biomass contributed 0.35 TWh or 1.2%, while solar photovoltaic, biogas, and wind energy collectively supplied less than 1% of the total generation, indicating emerging but still modest contributions from these alternative renewable technologies. Reported unavailable generation capacity fluctuated between 1,170 MW and 1,610 MW from 2019 through 2022. This unavailable capacity was roughly evenly divided between hydroelectric and thermal power stations, reflecting operational challenges such as maintenance schedules, equipment failures, or hydrological conditions affecting water availability for hydropower plants. These fluctuations in available capacity had implications for grid reliability and required careful management to balance supply and demand effectively. Looking ahead, Ecuador’s energy expansion plan for the period 2023 to 2032 aimed to add approximately 6,300 MW of renewable capacity to the national grid. This ambitious target reflected the country’s strategic focus on expanding clean energy generation to meet future demand while reducing environmental impacts. In parallel, the plan included the addition of 700 MW of “firm” thermal capacity scheduled for 2024-2025. These thermal plants were intended to provide grid security and ensure the quality of electricity supply by offering dispatchable power that could be relied upon during periods of low renewable output or peak demand. During the electricity crisis that affected Ecuador in 2023-2024, thermal generation experienced a significant reduction. By October 15, 2024, only a handful of thermal plants were operating at high capacity, including the Trinitaria plant with 125 MW, Machala Gas with 125 MW, G. Zevallos with 146 MW, and Jaramijó with 140 MW. This marked a notable decline from the planned thermal generation levels and highlighted vulnerabilities in the thermal sector during the crisis. The reduced thermal output underscored the challenges faced in maintaining a balanced and resilient electricity supply amid operational, economic, or fuel supply constraints during this period.

In 2013, Ecuador was positioned 96th in the global innovation rankings according to a study conducted by the World Economic Forum, reflecting its emerging presence in technological advancement on the international stage. Over the subsequent years, the country demonstrated a gradual improvement in its innovation capacity, culminating in a rise to 91st place in the 2021 Global Innovation Index. This marked a significant advancement from its 99th position in the 2020 edition of the index, indicating a positive trajectory in Ecuador’s commitment to fostering innovation and technological development. These rankings assess a variety of factors including research and development, infrastructure, market sophistication, and creative outputs, suggesting that Ecuador has made notable strides in these areas despite ongoing challenges. Ecuador’s scientific heritage is enriched by several prominent historical figures who laid foundational work in various disciplines. Among the earliest was Pedro Vicente Maldonado, born in 1707 in Riobamba, who distinguished himself as both a mathematician and cartographer. Maldonado’s contributions were significant during the 18th century, particularly in the fields of geodesy and astronomy, where his precise measurements and mapping efforts advanced the understanding of Ecuador’s geography and contributed to broader scientific knowledge in the region. His work was internationally recognized, and he collaborated with European scientists, which helped position Ecuador within the global scientific community of his time. Another key figure in Ecuadorian scientific and intellectual history was Eugenio Espejo, born in 1747 in Quito. Espejo was a polymath whose influence extended across printing, medicine, and the political sphere as a pioneer of Ecuadorian independence. As a printer, he was instrumental in disseminating Enlightenment ideas, which fueled intellectual and social reform movements. In medicine, Espejo is regarded as a pioneer for his efforts in public health and epidemiology, advocating for improved sanitary conditions and medical practices in colonial Ecuador. His multifaceted contributions helped lay the groundwork for subsequent scientific and cultural development in the country. The 19th century saw further advancements through figures such as Lieutenant Jose Rodriguez Labandera, who notably constructed Latin America’s first submarine in 1837. This engineering feat underscored Ecuador’s early engagement with innovative military technology and demonstrated the technical expertise present within the country during this period. Rodriguez Labandera’s work remains a landmark in Latin American naval engineering history, reflecting Ecuador’s potential for technological innovation despite limited industrial infrastructure. In the early to mid-20th century, Ecuadorian science continued to evolve with the contributions of specialists like Reinaldo Espinosa Aguilar (1898–1950), a botanist and biologist who focused on the diverse flora of the Andean region. Espinosa Aguilar’s research was crucial in cataloging and understanding the unique biodiversity of Ecuador’s mountainous ecosystems, contributing to conservation efforts and the scientific documentation of native plant species. His work helped establish a foundation for ecological and botanical studies in the country, which remain vital given Ecuador’s status as one of the world’s most biodiverse nations. Another notable scientist from this era was José Aurelio Dueñas (1880–1961), a chemist credited with inventing a method of textile serigraphy, a technique used in fabric printing. Dueñas’s innovation had practical applications in Ecuador’s textile industry, demonstrating the intersection of scientific research and industrial development. Anecdotally, Dueñas was reputed to have had many wives, a detail often mentioned in biographical accounts, though it remains peripheral to his scientific legacy. His contributions highlight the diversity of scientific inquiry pursued in Ecuador during the early 20th century, encompassing both theoretical and applied sciences. Contemporary scientific research in Ecuador spans several major areas, with particular emphasis on medical sciences, tropical and infectious disease treatments, agricultural engineering, pharmaceutical research, and bioengineering. The country’s geographic and climatic conditions have made the study of tropical diseases a priority, as Ecuador faces health challenges associated with its diverse ecosystems. Research in agricultural engineering addresses the need to improve crop yields and sustainable farming practices, vital for an economy that relies significantly on agriculture. Pharmaceutical research and bioengineering have also gained momentum, focusing on developing treatments and technologies suited to local health concerns and leveraging Ecuador’s rich biodiversity for biotechnological applications. Despite its relatively small size and dependence on imported technology, Ecuador has placed considerable emphasis on fostering research supported by entrepreneurship within the information technology sector. This strategic focus aims to reduce reliance on foreign technologies by cultivating domestic innovation and developing homegrown IT solutions. Among the notable Ecuadorian-developed IT products are the antivirus program Checkprogram, which provides cybersecurity solutions tailored to local needs, and MdLock, a banking protection system designed to enhance the security of financial transactions. Additionally, Cobis represents a core banking software developed in Ecuador, reflecting the country’s growing capabilities in software engineering and financial technology. These products illustrate the practical outcomes of Ecuador’s efforts to integrate scientific research with entrepreneurial initiatives in the technology domain. Scientific production in the hard sciences within Ecuador has historically been constrained by limited funding, which has restricted the scale and scope of research activities. Nevertheless, focused efforts have been made in disciplines such as physics, statistics, and the study of partial differential equations in mathematics. These areas have attracted academic interest and have been the subject of specialized research projects, often conducted within university settings. The concentration on these mathematical and physical sciences reflects both the intellectual strengths present in Ecuadorian academia and the strategic prioritization of foundational scientific disciplines that underpin technological innovation. Engineering research and scientific output in Ecuador predominantly originate from three leading polytechnic institutions: the Escuela Superior Politécnica del Litoral (ESPOL), the Universidad de Las Fuerzas Armadas (ESPE), and the Escuela Politécnica Nacional (EPN). These institutions serve as hubs for engineering education and research, offering advanced programs and fostering innovation in various engineering fields. ESPOL, located in Guayaquil, is known for its strong emphasis on applied sciences and technology development. ESPE, affiliated with the armed forces, contributes to research with a focus on defense technologies and engineering applications. EPN, based in Quito, has a longstanding tradition of excellence in engineering education and research, often collaborating with government and industry partners. Together, these polytechnics play a critical role in advancing Ecuador’s engineering capabilities and scientific knowledge. The Center for Research and Technology Development in Ecuador functions as an autonomous entity responsible for coordinating and promoting scientific research and technological innovation across the country. This center receives funding from the Secretaría de Educación Superior, Ciencia, Tecnología e Innovación (Senescyt), the government agency tasked with overseeing higher education and scientific development. By operating independently yet supported by state resources, the center facilitates research projects, technology transfer, and collaboration between academic institutions and industry. Its role is pivotal in strengthening Ecuador’s scientific infrastructure and fostering an environment conducive to innovation. According to the multidisciplinary scientific journal Nature, the top ten Ecuadorian institutions recognized for their outstanding scientific contributions include Yachay Tech University (Yachay Tech), the Escuela Politécnica Nacional (EPN), and the Universidad San Francisco de Quito (USFQ). Yachay Tech, a relatively new institution, has rapidly gained prominence for its focus on science and technology education and research, positioning itself as a national center of excellence. EPN continues to maintain its reputation for engineering and scientific research, while USFQ is noted for its comprehensive academic programs and research output across multiple disciplines. The recognition by Nature underscores the growing impact of these institutions in advancing Ecuador’s scientific landscape and contributing to global knowledge.

In August 2012, Ecuador’s trade balance for the first half of the year revealed a surplus nearing 390 million U.S. dollars, marking a substantial improvement compared to previous years. This figure represented a significant increase relative to 2007, when the country recorded a modest trade surplus of only 5.7 million dollars. The growth in the trade surplus over this period reflected evolving dynamics in Ecuador’s export and import activities, influenced by both global market conditions and domestic economic policies. The upward trend signaled a strengthening in the country’s external sector, highlighting improved competitiveness or favorable commodity price movements during that timeframe. When examining the trade surplus in 2012 in relation to 2006, the increase was approximately 425 million dollars. This expansion was primarily attributed to imports growing at a faster pace than exports during the intervening years. The acceleration in imports suggested rising domestic demand and possibly increased investment in capital goods, while the export sector faced challenges that tempered its growth. This imbalance in growth rates between imports and exports was a critical factor shaping the overall trade balance, underscoring the complexity of Ecuador’s trade dynamics and the interplay between internal consumption patterns and external trade flows. In 2008, Ecuador’s trade balance exhibited a marked divergence between its oil and non-oil sectors. The oil trade balance was positive, generating revenues amounting to 3.295 million dollars, reflecting the country’s status as a significant oil exporter. Oil exports constituted a vital component of Ecuador’s foreign exchange earnings, and fluctuations in global oil prices had a pronounced impact on the nation’s trade performance. Conversely, the non-oil trade balance was negative, totaling a deficit of 2.842 million dollars. This indicated that imports of manufactured goods, agricultural products, and other non-oil commodities exceeded exports in these categories, revealing structural challenges in diversifying the export base beyond hydrocarbons. The trade balance remained positive in subsequent years, with notable figures recorded in 2019 and 2020. In 2019, Ecuador achieved a trade surplus of 2.05 billion dollars, reflecting robust export performance and possibly favorable terms of trade. The surplus expanded further in 2020, reaching 6.4 billion dollars, a substantial increase that may have been influenced by shifts in global commodity prices, changes in trade policies, or adjustments in domestic economic activity during that year. These surpluses underscored periods of relative strength in Ecuador’s external accounts, contributing to the country’s foreign exchange reserves and economic stability. However, the trade balance exhibited volatility in the mid-2010s. In 2016, Ecuador recorded a positive trade balance of 608 million dollars, indicating a surplus albeit smaller than in previous years. This surplus was followed by a reversal in 2017, when the trade balance turned negative with a deficit of 723 million dollars. The downward trend continued into 2018, with the trade deficit widening to 1.41 billion dollars. These fluctuations reflected changing conditions in both export revenues and import demand, as well as external factors such as commodity price volatility and global economic trends. The deficits during this period posed challenges for Ecuador’s balance of payments and fiscal management. Ecuador’s trade relationships with specific regions reveal a pattern of trade deficits, particularly with Argentina, Colombia, and Asia. The negative trade balance with these partners indicates that Ecuador imports more goods and services from these regions than it exports to them. This dynamic suggests that these countries and regions serve as net exporters to Ecuador, supplying a range of products that may include manufactured goods, machinery, technology, and consumer items. The trade deficits highlight the importance of these trading partners in meeting domestic demand and the ongoing need for Ecuador to enhance its export competitiveness to rebalance trade flows. Beyond its participation in regional trade blocs, Ecuador has actively pursued bilateral trade agreements with various countries to diversify its trade partnerships and enhance market access. These treaties complement its membership in the Andean Community of Nations, a regional integration group aimed at promoting economic cooperation among member states. Additionally, Ecuador holds associate membership in Mercosur, the Southern Common Market, which facilitates trade and economic integration among South American countries. These memberships and agreements reflect Ecuador’s strategic approach to expanding its trade network and integrating into broader regional and global markets. Ecuador is also a member of the World Trade Organization (WTO), the principal international body governing global trade rules and dispute resolution. Membership in the WTO commits Ecuador to adhere to agreed-upon trade regulations, promotes transparency in trade policies, and provides a platform for negotiating trade agreements and resolving trade disputes. This affiliation underscores Ecuador’s engagement with the multilateral trading system and its commitment to participating in the global economy under established international frameworks. In addition to trade organizations, Ecuador participates in several multilateral financial institutions that support economic development and financial stability. These include the Inter-American Development Bank (IDB), the World Bank, the International Monetary Fund (IMF), and the Development Bank of Latin America and the Caribbean (CAF). Through these institutions, Ecuador accesses financial resources, technical assistance, and policy advice aimed at fostering sustainable economic growth, infrastructure development, and social programs. Engagement with these organizations also reflects Ecuador’s integration into the global financial system and its efforts to address economic challenges through multilateral cooperation. A significant milestone in Ecuador’s economic history occurred in April 2007, when the country paid off its outstanding debt to the International Monetary Fund (IMF). This repayment marked the end of direct IMF interventionism in Ecuador, allowing the government greater autonomy in formulating and implementing economic policies without the conditionalities typically associated with IMF programs. The debt clearance was a symbolic and practical step toward asserting national sovereignty over economic decision-making and reflected improved fiscal management and external debt strategy at that time. Ecuador’s public financial system comprises several key institutions that play vital roles in managing monetary policy, providing development financing, and supporting various sectors of the economy. The Central Bank of Ecuador (BCE) serves as the primary monetary authority, responsible for regulating money supply, overseeing the financial system, and maintaining currency stability. The National Development Bank (BNF) focuses on financing projects that promote economic growth and social development. The State Bank and the National Finance Corporation provide additional financial services and credit facilities to support public and private sector initiatives. Specialized institutions such as the Ecuadorian Housing Bank (BEV) address housing finance needs, while the Ecuadorian Educational Loans and Grants program facilitates access to education through financial support. Collectively, these institutions form the backbone of Ecuador’s public financial infrastructure, enabling the government to implement economic policies and support development objectives.

The economic performance of Ecuador deteriorated significantly during the period of 1997 to 1998, culminating in a severe financial crisis in 1999 that profoundly affected the country’s economic landscape. Several external shocks played a critical role in precipitating this crisis. Among these were the El Niño weather phenomenon in 1997, which caused widespread damage to infrastructure and agriculture, exacerbating existing vulnerabilities. Concurrently, a sharp decline in global oil prices during 1997–98 severely reduced Ecuador’s export revenues, given the country’s heavy reliance on oil exports as a primary source of foreign exchange. Additionally, instability in international emerging markets during the same period further undermined investor confidence and capital flows into Ecuador, compounding the economic difficulties. These external shocks exposed the unsustainable nature of the Ecuadorian government’s economic policies at the time. The government had been running large fiscal deficits financed through expansionary monetary policies, which included excessive money printing and credit expansion. This approach led to a loss of confidence in the national currency and heightened inflationary pressures. The combination of fiscal mismanagement and external shocks left the economy vulnerable to a collapse, which materialized in 1999 with devastating effects. That year, the country’s gross domestic product (GDP) contracted by 7.3%, reflecting a sharp economic downturn. Inflation soared to an annual rate of 52.2%, eroding purchasing power and destabilizing prices across the economy. Simultaneously, the national currency, the sucre, experienced a dramatic devaluation of 65%, further undermining economic stability and fueling capital flight. In response to the ongoing economic instability, on January 9, 2000, President Jamil Mahuad’s administration announced plans to adopt the United States dollar as Ecuador’s official currency. This dollarization policy aimed to stabilize the economy by eliminating currency risk, curbing hyperinflation, and restoring investor confidence. However, the announcement sparked widespread protests and social unrest, culminating in the 2000 Ecuadorian coup d’état. The unrest led to the ousting of President Mahuad, and Vice President Gustavo Noboa was elevated to the presidency. Under Noboa’s leadership, the government reaffirmed its commitment to dollarization as a central component of its economic recovery strategy. The transition from the sucre to the U.S. dollar was completed in 2001, marking a significant shift in Ecuador’s monetary policy framework. Following the dollarization process, Ecuador entered into a one-year stand-by program with the International Monetary Fund (IMF), which concluded in December 2001. Subsequently, in March 2003, the country negotiated a new stand-by agreement with the IMF valued at $205 million. These agreements were designed to support Ecuador’s fiscal consolidation efforts and economic stabilization during the post-crisis recovery phase. Between 2000 and 2001, the Ecuadorian economy experienced modest recovery, with GDP growth rates of 2.3% in 2000 and 5.4% in 2001, signaling a gradual return to economic expansion. However, growth slowed to 2.7% in 2002, reflecting ongoing challenges in sustaining momentum. Inflation rates showed significant improvement, decreasing from an annual rate of 96.1% in 2000 to 37.7% in 2001, and further declining to 12.6% in 2002, indicating the effectiveness of dollarization and fiscal reforms in stabilizing prices. A key development in Ecuador’s economic infrastructure during this period was the completion of the second Transandean Oil Pipeline (Oleoducto de Crudos Pesados, OCP) in 2003. This pipeline doubled the country’s oil transport capacity, enhancing its ability to export crude oil and increasing revenues from the oil sector. The expansion of oil export infrastructure played a vital role in supporting economic growth and fiscal revenues. By the mid-2000s, Ecuador’s economy had become the eighth largest in Latin America, with an average annual growth rate of 4.6% from 2000 to 2006, reflecting a period of relative stability and expansion. In January 2009, the Central Bank of Ecuador projected a GDP growth rate of 6.88% for 2010, signaling optimistic expectations for the country’s economic prospects despite global economic uncertainties. Between 1999 and 2007, Ecuador’s GDP doubled, reaching approximately $65.49 billion according to data from the Central Bank of Ecuador. Inflation remained relatively low during this period, with a rate of approximately 1.14% up to January 2008, although this figure represented the highest inflation rate recorded in the preceding year. Unemployment rates fluctuated between 6% and 8% from December 2007 through September 2008, rising to about 9% in October 2008 amid the global financial crisis before decreasing again to 8% in November 2008. Between 2006 and 2009, the Ecuadorian government increased its spending on social welfare and education from 2.6% to 5.2% of GDP, reflecting a policy emphasis on social development and poverty reduction. Starting in 2007, the government implemented expansionary fiscal policies aimed at economic stabilization and growth. These policies included increased access to housing finance, the introduction of stimulus packages to boost domestic demand, and restrictions on banks’ foreign reserves to manage liquidity and capital flows. The government also invested heavily in education and infrastructure projects, which contributed to significant improvements in living conditions for the country’s poor and helped to foster more inclusive economic growth. On December 12, 2008, President Rafael Correa announced that Ecuador would default on $30.6 million in interest payments on a $510 million loan, criticizing international lenders as “monsters” exploiting the country. Correa also declared that $3.8 billion in foreign debt, which had been negotiated by previous administrations, was illegitimate due to the lack of proper executive approval. At the time of this announcement, Ecuador held cash reserves amounting to $5.65 billion, underscoring the government’s willingness to prioritize fiscal sovereignty over debt servicing. This move was part of a broader strategy to restructure Ecuador’s external debt and assert greater control over its economic policies. The global recession of 2009, combined with declining oil prices and reduced remittances from Ecuadorians living abroad, slowed the country’s economic growth to 0.6% that year. However, signs of recovery emerged in 2010, with GDP growth rebounding to 2.8%. The following year, in 2011, the economy expanded by 7.4%, and from 2012 to 2014, the average annual growth rate was 4.5%. This period of high growth was partly attributed to a public investment boom fueled by elevated oil prices and substantial lending from China. The increased availability of financial resources enabled the government to finance infrastructure projects and social programs, further stimulating economic activity. According to the U.S. Energy Information Administration, in 2014 Ecuador was the third largest source of foreign oil imports to the western United States, highlighting the country’s strategic importance in regional energy markets. However, after a significant decline in oil prices in mid-2014, Ecuador’s oil earnings fell sharply, prompting the Economist Intelligence Unit to forecast a slight contraction in the economy for 2015. Despite these challenges, the economy managed to grow by less than 0.5% that year, indicating resilience but also vulnerability to commodity price fluctuations. President Correa’s plan to extract crude oil from the Ishpingo, Tambochoa, and Tiputini (ITT) fields located within Yasuní National Park was intended to boost oil revenues without compromising environmental commitments. Nevertheless, this initiative did not prevent a recession, as GDP contracted by 1.6% in 2016. That year, Ecuador was further impacted by a devastating earthquake that caused an estimated $3 billion in damages. The natural disaster severely affected reconstruction and humanitarian efforts, with international aid including over $3 million from the U.S. Office of Foreign Disaster Assistance and a United Nations appeal seeking $73 million. By July 2016, only about 20% of the requested aid had been received, underscoring the challenges faced in mobilizing sufficient resources for recovery. In response to the economic difficulties of 2016, the Correa government increased the value-added tax (VAT) and implemented expenditure cuts, including a 30% reduction in capital spending. Despite initial reluctance, Ecuador accepted financial support from the International Monetary Fund in July 2016 through the Rapid Financing Instrument, amounting to $364 million. The government also considered additional loans from China and the World Bank to address fiscal shortfalls and support economic stabilization. Ecuador’s 2008 default on $3.2 billion in debt limited the country’s access to global financial markets, forcing it to rely on nontraditional sources of financing. China emerged as a key lender, providing nearly $11 billion in loans between 2005 and 2014. In early 2015, Ecuador requested an additional $7.5 billion from China, a request that was approved and partially disbursed, including nearly $1 billion in mid-2015. Ecuador returned to international capital markets in June 2014 with a $2 billion bond issue, followed by smaller issues in 2015. However, the structure of Chinese loans, which require repayment in nearly 500 barrels of crude oil daily—equivalent to approximately three years of Ecuador’s oil production—raised concerns about the sustainability of the country’s debt burden. On the trade front, Ecuador withdrew from efforts to develop a regional free trade agreement (FTA) with the United States and other Andean nations in 2006. While the U.S. proceeded to sign bilateral FTAs with Peru and Colombia, Ecuador chose not to pursue a similar agreement. Following Venezuela’s full membership in Mercosur in 2012, Bolivia and Ecuador applied to upgrade their status from observers to full members of the trade bloc, which originally comprised Argentina, Brazil, Paraguay, and Uruguay. Ecuador also embraced a trade agreement with the European Union as part of the EU-Andean Community Association, which took effect in January 2017. This agreement was partly designed to support struggling non-oil exporters by providing preferential access to European markets. In March 2019, the International Monetary Fund approved a $10 billion support program for Ecuador covering the period from 2018 to 2021. This program was aligned with the 2018–2021 Prosperity Plan, aiming to promote fiscal sustainability, economic growth, and social development through structural reforms and prudent macroeconomic management. The IMF support marked a continuation of Ecuador’s engagement with international financial institutions to stabilize and strengthen its economy amid ongoing domestic and global challenges.

As of 2012, the Ecuadorian labor market comprised approximately 9 million individuals engaged in various forms of economic occupation, reflecting the active participation of a significant portion of the population in the country’s workforce. Despite this substantial level of employment, about 1.01 million inhabitants remained unemployed, highlighting persistent challenges in achieving full employment and economic inclusion. This unemployment figure underscored structural issues within the economy, including limited job creation in certain sectors and regional disparities that affected labor market outcomes. The distribution of employment across formal and informal sectors also influenced the overall quality and stability of jobs available to Ecuadorians during this period. The distribution of wealth in Ecuador exhibited marked inequality, which was particularly evident in the late 1990s. In 1998, the top 10% of the richest segment of the population controlled a disproportionate 42.5% of the national income, illustrating a concentration of economic resources within a small elite. In stark contrast, the bottom 10% of the poorest population held only 0.6% of the income, revealing a vast disparity that characterized the socioeconomic landscape. This unequal distribution of wealth was symptomatic of broader structural inequalities, including limited access to education, capital, and economic opportunities for the lower-income groups. The economic stratification of Ecuador during this period contributed to entrenched poverty and limited social mobility, particularly affecting marginalized communities. Poverty rates in Ecuador were not uniformly distributed across the population but were notably higher among indigenous peoples, Afro-descendants, and residents of rural areas. These groups faced systemic disadvantages that compounded their economic vulnerability, including limited access to quality education, healthcare, and infrastructure. Indigenous populations, in particular, experienced social exclusion and discrimination, which hindered their ability to participate fully in the formal economy. Rural residents often contended with subsistence agriculture and limited market integration, factors that perpetuated cycles of poverty. Afro-descendant communities similarly faced historical marginalization and economic barriers that contributed to elevated poverty levels relative to the national average. Health expenditure in Ecuador during the late 1990s further reflected the deep inequalities present in the country. In 1998, only 7.6% of the total health expenditure was allocated to the poorest 20% of the population, while the richest 20% received a disproportionate 38.1% of health spending. This stark disparity in resource distribution highlighted systemic inequities in access to healthcare services, with wealthier segments of society benefiting from better medical infrastructure, higher-quality care, and greater availability of health resources. The inequitable allocation of health expenditures exacerbated existing health disparities, contributing to poorer health outcomes among the most vulnerable populations, including indigenous and rural communities. Such disparities underscored the need for policy interventions aimed at promoting more equitable access to healthcare across socioeconomic strata. Between 1999 and 2010, Ecuador experienced a significant decline in extreme poverty rates, marking a notable shift in the country’s socioeconomic conditions. In 2001, approximately 40% of the population lived in extreme poverty, a figure that decreased to 17.4% by 2011. This reduction represented a substantial improvement in living standards for millions of Ecuadorians and reflected the impact of various economic and social policies implemented during this period. The decline in extreme poverty was attributed to a combination of factors, including macroeconomic stabilization, social welfare programs, and increased access to education and healthcare. These improvements contributed to enhanced income generation and better quality of life for many households previously trapped in severe deprivation. A key factor in the reduction of extreme poverty was the increased emigration of Ecuadorians, which played a significant role in alleviating economic pressures at home. Remittances sent by Ecuadorians living abroad provided crucial financial support to families, enabling investments in education, health, and small businesses. This inflow of external resources helped to raise household incomes and reduce vulnerability among poor populations. Additionally, the economic stability achieved after Ecuador adopted the U.S. dollar as its official currency in 2000 contributed to the poverty reduction trend. Dollarization helped to curb hyperinflation, stabilize prices, and attract foreign investment, creating a more predictable economic environment conducive to growth and poverty alleviation. These combined factors facilitated a more inclusive economic expansion that benefited broader segments of the population. Despite the overall progress in reducing poverty, disparities persisted among specific demographic groups. Poverty rates remained significantly higher among indigenous peoples, Afro-descendants, and rural communities, reflecting ongoing structural inequalities. Indigenous populations, in particular, continued to experience a poverty rate of approximately 44%, more than double the national average. This persistent disparity was linked to historical marginalization, limited access to land and resources, and inadequate representation in political and economic decision-making processes. Afro-descendant communities and rural inhabitants similarly faced entrenched barriers, including poor infrastructure, limited educational opportunities, and restricted access to markets and services. These enduring inequalities underscored the complexity of poverty in Ecuador and the necessity for targeted policies to address the unique challenges faced by marginalized groups.

The industrial sector in Ecuador has historically encountered considerable difficulties in achieving robust growth and comprehensive development. Despite the country’s abundant natural resources and strategic geographic location, the sector’s expansion has been constrained by structural and infrastructural limitations. Among these, the most significant impediment has been the persistent energy deficit, which has curtailed the capacity of industries to operate at optimal levels and to scale production efficiently. This deficit has manifested as insufficient and unreliable electricity supply, thereby discouraging investment and limiting the competitiveness of Ecuadorian industries in both domestic and international markets. Recognizing the critical role of energy availability in industrial development, the government of Ecuador has undertaken concerted efforts to address the energy shortfall. A central component of this strategy has involved improving the performance of existing hydroelectric plants, which constitute a substantial portion of the country’s electricity generation capacity. By optimizing operational efficiencies and implementing maintenance programs, these plants have been able to increase their output and reliability. Concurrently, the government has prioritized the development of new hydroelectric projects to expand the overall energy supply. These projects are designed to harness Ecuador’s abundant water resources, particularly in the Andean region, to generate clean and sustainable electricity that can meet growing industrial and residential demands. Among the new hydroelectric initiatives, the Coca-Codo hydroelectric plant stands out as a flagship project and a cornerstone of Ecuador’s energy strategy. The development of Coca-Codo involved complex negotiations and substantial investment, reflecting its strategic importance in the national energy matrix. Located on the Coca River in the Napo Province, this plant has a generation capacity of approximately 1,500 megawatts, making it one of the largest hydroelectric facilities in the country. Its completion significantly augmented Ecuador’s electricity supply, reducing dependence on fossil fuels and enabling the government to pursue a more sustainable and diversified energy portfolio. The Coca-Codo project also symbolized a broader commitment to infrastructure modernization and energy security, which are essential for fostering industrial growth. To further stimulate industrial expansion and support energy development, the government has formulated a comprehensive package of incentives aimed at attracting investment and enhancing sectoral competitiveness. These incentives encompass financing mechanisms designed to facilitate access to capital for industrial enterprises, particularly small and medium-sized businesses that often face barriers to credit. In addition, tributary incentives, including tax breaks and exemptions, have been introduced to reduce the fiscal burden on industries and encourage reinvestment of profits into productive activities. Adjustments to tariffs have also been implemented, aiming to create a more favorable economic environment for industrial operations by lowering energy costs and improving the affordability of inputs. The scope of these incentives extends across a diverse range of sectors identified as priorities for national development. Tourism, recognized for its potential to generate foreign exchange and employment, is targeted for growth through infrastructure improvements and service quality enhancements. The food processing industry, vital for adding value to Ecuador’s rich agricultural output, benefits from policies that support modernization and export competitiveness. Renewable and alternative energy sources, including bioenergies, have been promoted to diversify the energy mix and reduce environmental impact. The pharmaceutical and chemical products sector, along with biochemical and environmental biomedicine industries, has received attention for their innovation potential and contribution to public health and environmental sustainability. Additionally, the government has focused on expanding services, automotive manufacturing, the metallurgical industry, footwear production, and the manufacturing of automotive parts and components. This multifaceted approach reflects an understanding that industrial growth must be broad-based and inclusive to generate sustainable economic development. Complementing these sectoral initiatives, significant investments have been made in strengthening the national electricity grid to ensure reliable power transmission and distribution. A major infrastructure project in this regard has been the construction of a 500 kilovolt (kV) transmission line, which serves as a backbone for the national grid. This high-voltage line enhances the capacity and stability of electricity transmission across different regions of Ecuador, reducing losses and improving the quality of supply. The improved grid infrastructure not only supports domestic industrial demand but also facilitates regional integration by enabling increased electricity trade with neighboring countries. Specifically, the 500 kV transmission line plays a pivotal role in expanding electricity trade with Peru and Colombia, Ecuador’s immediate neighbors. By interconnecting the national grid with those of these countries, Ecuador can engage in cross-border energy exchanges that optimize resource utilization and enhance energy security for the entire region. This integration allows for the export of surplus electricity generated by Ecuador’s hydroelectric plants during periods of high production, while also providing access to electricity imports during times of peak demand or supply shortfalls. Such regional cooperation contributes to the stability of energy markets, promotes competitive pricing, and supports the broader goal of sustainable industrial development in Ecuador and its neighbors.

The main economic indicators of Ecuador from 1980 through 2019 provide a comprehensive view of the country’s economic performance over four decades, with projections by the International Monetary Fund (IMF) staff extending from 2020 to 2025. These indicators encompass gross domestic product (GDP) measured both in purchasing power parity (PPP) and nominal terms, per capita GDP figures, GDP growth rates, inflation rates, unemployment levels, and government debt percentages where available. Within the data tables, inflation rates below 5% are distinctly highlighted in green, signaling periods of relative price stability in the Ecuadorian economy. In 1980, Ecuador’s GDP stood at 26.0 billion US dollars when adjusted for purchasing power parity, reflecting the total value of goods and services produced within the country at prices comparable internationally. The per capita GDP in PPP terms was 3,243.3 US dollars, indicating the average economic output per person. Nominal GDP, which measures output at current market prices without adjustment for cost of living differences, was 16.8 billion US dollars, with a corresponding per capita nominal GDP of 2,097.1 US dollars. The economy experienced a robust growth rate of 4.9% that year, signaling expansion in productive capacity and economic activity. However, inflation was relatively high at 13.0%, eroding purchasing power and indicating price increases across the economy. The unemployment rate was also significant at 13.0%, reflecting challenges in labor market absorption. Data on government debt for this year was not available, leaving a gap in understanding fiscal pressures during this period. The following year, 1981, saw an increase in GDP to 29.6 billion US dollars (PPP), with per capita GDP rising to 3,585.7 US dollars (PPP), demonstrating continued economic growth. Nominal GDP also increased to 17.2 billion US dollars, although the per capita nominal GDP slightly decreased to 2,087.4 US dollars, suggesting some disparity in income distribution or price level changes. The GDP growth rate moderated to 3.9%, while inflation rose to 16.4%, indicating accelerating price pressures. Unemployment increased notably to 16.4%, pointing to labor market difficulties despite economic expansion. Government debt figures remained unavailable, limiting insight into fiscal sustainability. In 1982, Ecuador’s GDP further expanded to 31.8 billion US dollars (PPP), with per capita GDP reaching 3,746.6 US dollars (PPP). Nominal GDP remained steady at 17.2 billion US dollars, but per capita nominal GDP declined to 2,026.4 US dollars, reflecting possible inflationary effects or income distribution changes. Economic growth slowed substantially to 1.2%, while inflation stabilized slightly at 16.3%. Unemployment persisted at a high level of 16.3%, indicating ongoing challenges in employment generation. Government debt data continued to be unavailable, obscuring the fiscal context. The year 1983 marked a downturn, with GDP measured at 32.1 billion US dollars (PPP) and per capita GDP slightly decreasing to 3,681.4 US dollars (PPP). Nominal GDP contracted to 15.1 billion US dollars, with per capita nominal GDP falling sharply to 1,732.5 US dollars. The economy experienced a contraction of -2.8%, reflecting a recessionary period. Inflation surged dramatically to 48.4%, signaling hyperinflationary pressures that severely undermined economic stability. Unemployment also escalated sharply to 48.4%, indicating widespread job losses and economic distress. Government debt data was not available, but the economic indicators suggest fiscal strain. In 1984, the economy showed signs of recovery as GDP increased to 34.7 billion US dollars (PPP), with per capita GDP rising to 3,868.7 US dollars (PPP). Nominal GDP improved to 16.1 billion US dollars, and per capita nominal GDP increased to 1,794.7 US dollars. The GDP growth rate rebounded to 4.2%, reflecting renewed economic expansion. Inflation decreased to 31.2%, although still elevated, indicating partial stabilization of prices. Unemployment dropped to 31.2%, suggesting some labor market recovery. Government debt data remained unavailable, leaving fiscal conditions unclear. By 1985, Ecuador’s GDP reached 37.4 billion US dollars (PPP), with per capita GDP at 4,058.3 US dollars (PPP), signaling steady growth. Nominal GDP increased to 18.8 billion US dollars, with per capita nominal GDP rising to 2,044.3 US dollars. The economy grew at a rate of 4.4%, maintaining a positive trajectory. Inflation declined to 28.0%, reflecting ongoing efforts to control price increases. Unemployment remained high at 28.0%, indicating persistent labor market challenges. Government debt data was still not available. In 1986, GDP expanded to 39.3 billion US dollars (PPP), with per capita GDP reaching 4,159.7 US dollars (PPP). Nominal GDP, however, declined to 13.8 billion US dollars, with per capita nominal GDP decreasing to 1,461.9 US dollars, possibly due to currency fluctuations or price adjustments. The economy grew by 3.1%, indicating moderate expansion. Inflation decreased to 23.0%, showing progress in price stabilization. Unemployment remained elevated at 23.0%. Government debt data was not reported. The year 1987 saw a contraction in GDP to 37.9 billion US dollars (PPP), with per capita GDP falling to 3,908.6 US dollars (PPP). Nominal GDP further declined to 12.9 billion US dollars, and per capita nominal GDP dropped to 1,332.1 US dollars. The economy contracted by -6.0%, reflecting a significant downturn. Inflation increased to 29.5%, indicating renewed inflationary pressures. Unemployment rose to 29.5%, highlighting worsening labor market conditions. Government debt data remained unavailable. In 1988, Ecuador’s GDP surged to 43.3 billion US dollars (PPP), with per capita GDP increasing to 4,357.2 US dollars (PPP). Nominal GDP was 12.3 billion US dollars, with per capita nominal GDP at 1,234.7 US dollars. The economy experienced a strong growth rate of 10.5%, marking a period of rapid expansion. However, inflation remained extremely high at 58.2%, signifying persistent macroeconomic instability. Unemployment also stood at 58.2%, reflecting severe labor market distress. Government debt was recorded at 7.0%, providing some insight into fiscal obligations during this volatile period. In 1989, GDP increased slightly to 45.2 billion US dollars (PPP), with per capita GDP at 4,431.5 US dollars (PPP). Nominal GDP declined to 12.0 billion US dollars, and per capita nominal GDP decreased to 1,182.5 US dollars. The economy was nearly stagnant, with a marginal growth rate of 0.3%. Inflation escalated further to 75.6%, indicating hyperinflationary conditions that severely affected economic stability. Unemployment remained extremely high at 75.6%, underscoring widespread economic hardship. Government debt rose to 7.9%, reflecting increased fiscal pressures. The year 1990 saw GDP rise to 48.3 billion US dollars (PPP), with per capita GDP increasing to 4,626.3 US dollars (PPP). Nominal GDP improved slightly to 12.2 billion US dollars, with per capita nominal GDP at 1,173.1 US dollars. The economy grew by 3.0%, showing modest recovery. Inflation decreased to 48.5%, though still alarmingly high. Unemployment remained at 48.5%, indicating continued labor market challenges. Government debt decreased to 6.1%, suggesting some fiscal consolidation. In 1991, Ecuador’s GDP reached 52.4 billion US dollars (PPP), with per capita GDP at 4,913.6 US dollars (PPP). Nominal GDP rose to 13.7 billion US dollars, and per capita nominal GDP increased to 1,286.6 US dollars. The economy grew at a rate of 5.1%, reflecting renewed economic momentum. Inflation remained elevated at 48.8%, posing ongoing challenges to price stability. Unemployment persisted at 48.8%. Government debt increased to 8.5%, indicating growing fiscal obligations. By 1992, GDP expanded to 55.6 billion US dollars (PPP), with per capita GDP reaching 5,092.2 US dollars (PPP). Nominal GDP increased to 15.0 billion US dollars, with per capita nominal GDP at 1,375.7 US dollars. The economy grew by 3.6%, maintaining positive growth. Inflation rose to 54.3%, reflecting persistent inflationary pressures. Unemployment remained high at 54.3%. Government debt further increased to 8.9%, highlighting fiscal challenges. In 1993, GDP rose to 58.0 billion US dollars (PPP), with per capita GDP at 5,203.9 US dollars (PPP). Nominal GDP surged to 17.5 billion US dollars, and per capita nominal GDP increased to 1,572.8 US dollars. The economy grew by 2.0%, indicating slower expansion. Inflation decreased somewhat to 45.0%, while unemployment remained at 45.0%. Government debt declined slightly to 8.3%. The year 1994 witnessed GDP growth to 61.8 billion US dollars (PPP), with per capita GDP increasing to 5,429.4 US dollars (PPP). Nominal GDP rose significantly to 21.1 billion US dollars, with per capita nominal GDP at 1,858.3 US dollars. The economy expanded by 4.3%, showing a strong performance. Inflation decreased markedly to 27.4%, indicating improved price stability. Unemployment stood at 27.4%, reflecting some labor market improvements. Government debt decreased to 5.7%, suggesting better fiscal management. In 1995, GDP reached 64.5 billion US dollars (PPP), with per capita GDP at 5,561.6 US dollars (PPP). Nominal GDP increased to 23.0 billion US dollars, with per capita nominal GDP rising to 1,980.4 US dollars. The economy grew by 2.3%, maintaining moderate expansion. Inflation fell to 22.9%, continuing the trend of price stabilization. Unemployment remained at 22.9%. Government debt was recorded at 5.5%, indicating stable fiscal conditions. By 1996, GDP reached 66.8 billion US dollars (PPP), with per capita GDP of 5,663.5 US dollars (PPP). Nominal GDP increased to 24.0 billion US dollars, with per capita nominal GDP at 2,037.1 US dollars. The economy grew by 1.7%, reflecting slower growth. Inflation rose slightly to 24.4%, while unemployment remained at 24.4%. Government debt increased to 9.0%, suggesting growing fiscal pressures. In 1997, GDP expanded to 70.9 billion US dollars (PPP), with per capita GDP at 5,916.2 US dollars (PPP). Nominal GDP increased to 27.0 billion US dollars, with per capita nominal GDP rising to 2,253.2 US dollars. The economy grew by 4.3%, marking a period of solid expansion. Inflation increased to 30.6%, indicating renewed inflationary pressures. Unemployment also rose to 30.6%. Government debt decreased to 7.8%, reflecting some fiscal consolidation. The year 1998 saw GDP rise to 74.1 billion US dollars (PPP), with per capita GDP reaching 6,086.1 US dollars (PPP). Nominal GDP increased slightly to 27.5 billion US dollars, with per capita nominal GDP at 2,257.9 US dollars. The economy grew by 3.3%, maintaining positive momentum. Inflation increased to 36.1%, signaling persistent inflation concerns. Unemployment remained elevated at 36.1%. Government debt rose to 10.2%, indicating increased fiscal strain. In 1999, the economy contracted, with GDP declining to 71.5 billion US dollars (PPP) and per capita GDP falling to 5,794.1 US dollars (PPP). Nominal GDP dropped sharply to 19.7 billion US dollars, with per capita nominal GDP decreasing to 1,598.8 US dollars. The economy contracted by -4.7%, reflecting a recessionary period. Inflation surged to 52.2%, exacerbating economic difficulties. Unemployment remained high at 52.2%, indicating widespread labor market distress. Government debt increased to 13.1%, highlighting significant fiscal challenges. In 2000, Ecuador’s GDP was recorded at 74.0 billion US dollars (PPP), with a per capita GDP of 5,902.0 US dollars (PPP). Nominal GDP was reported as 18 billion US dollars, although the per capita nominal GDP figure for this year was not provided in the available data. This year marked a transitional period for the economy, as it began to stabilize after the previous year’s contraction and high inflation. The broader economic context involved efforts to control inflation and restore growth, amidst fiscal and monetary challenges that had accumulated during the 1990s. These detailed economic indicators from 1980 to 2000 illustrate Ecuador’s fluctuating economic performance characterized by periods of growth, contraction, high inflation, and unemployment challenges. The data reflect the complex interplay of domestic economic policies, external shocks, and structural factors that shaped Ecuador’s economic trajectory during these decades. The inclusion of IMF staff estimates for 2020–2025, although not detailed here, provides a forward-looking perspective on the country’s economic prospects based on contemporary analyses and policy frameworks.