chief of mission: Ambassador Heather HODGES embassy: Avenida Avigiras E12-170 y Avenida Eloy Alfaro, Quito mailing address: Avenida Guayacanes N52-205 y Avenida Avigiras telephone: [593] (2) 398-5000 FAX: [593] (2) 398-5100 consulate(s) general: Guayaquil
Flag description:
three horizontal bands of yellow (top, double width), blue, and red with the coat of arms superimposed at the center of the flag; similar to the flag of Colombia, which is shorter and does not bear a coat of arms
Economy
Ecuador
Economy - overview:
Ecuador is substantially dependent on its petroleum resources, which have accounted for more than half of the country's export earnings and one-fourth of public sector revenues in recent years. In 1999/2000, Ecuador suffered a severe economic crisis, with GDP contracted by more than 6%, with a significant increase in poverty. The banking system also collapsed, and Ecuador defaulted on its external debt later that year. In March 2000, Congress approved a series of structural reforms that also provided for the adoption of the US dollar as legal tender. Dollarization stabilized the economy, and positive growth returned in the years that followed, helped by high oil prices, remittances, and increased non-traditional exports. From 2002-06 the economy grew 5.5%, the highest five-year average in 25 years. The poverty rate declined but remained high at 38% in 2006. In 2006 the government of Alfredo PALACIO (2005-07) seized the assets of Occidental Petroleum for alleged contract violations and imposed a windfall revenue tax on foreign oil companies, leading to the suspension of free trade negotiations with the US. These measures, combined with chronic underinvestment in the state oil company, Petroecuador, led to a drop in petroleum production in 2007. PALACIO's successor, Rafael CORREA, raised the specter of debt default - but Ecuador has paid its debt on time. He also decreed a higher windfall revenue tax on private oil companies, then sought to renegotiate their contracts to overcome the debilitating effect of the tax. This generated economic uncertainty; private investment has dropped and economic growth has slowed significantly.
GDP (purchasing power parity):
$98.71 billion (2007 est.)
GDP (official exchange rate):
$44.18 billion (2007 est.)