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Ecuador ECONOMY
Gross Domestic Product (GDP): US$9.4 billion in 1989, or
US$940 per capita. Substantial economic growth in 1970s following
discovery of new petroleum fields in Oriente and international
price increases for petroleum. Increased external debt, lowered
petroleum prices, devastation from floods and earthquake, and
economic mismanagement combined to produced serious economic
problems during 1980s. GDP declined by 5.2 percent in 1987,
increased by 8 percent in 1988, and grew by only 1 percent in 1989.
Agriculture: Including livestock raising, forestry, and
fishing, almost 18 percent of GDP in 1987. Sector employed about 35
percent of nation's workforce in 1987.
Natural Resources and Energy: Petroleum and mining
accounted for 8 percent of GDP in 1987. Nation had 1.6 million
barrels of proven oil reserves, vast majority of which found in
Oriente. Abundant natural gas reserves in Oriente and in Gulf of
Guayaquil.
Industry: About 17 percent of GDP in 1987. Food
processing and textile manufacturing most important components of
industry sector. Nearly 10 percent of labor force employed in
industry in 1987. Vast majority of firms had fewer than five
workers.
Services: Accounted for nearly 50 percent of GDP and 24
percent of labor force in 1987. Wholesale and retail trade,
financial services, and transportation and communications most
important segments.
Imports: Totalled almost US$2.1 billion in 1987. Imports
consisted primarily of raw materials and capital goods for
industry, foods and lubricants, transportation equipment, durable
consumers goods, and non-durable consumer goods. Major suppliers of
imports were United States, Japan, the Federal Republic of Germany
(West Germany), and Brazil.
Exports: Totalled US$2.3 billion in 1989. Petroleum
generated half of all export revenues; other major exports included
shrimp, bananas, coffee, and cacao. Over 60 percent of exports in
1987 destined for United States.
Balance of Payments: Chronic current-account deficits
during late 1980s, although deficit reduced from nearly US$1.2
billion in 1987 to US$500 million in 1989. External debt reached
US$11.3 billion in 1989.
Exchange Rate: Sucre (S/) pegged to United States dollar
during 1980s but devalued numerous times during 1980s. Official
rate averaged S/526=US$1 in 1989.
Fiscal Year: Calendar Year.
Fiscal Policy: Upon assuming presidency in 1988, Rodrigo
Borja Cevallos (1988- ) inherited a rapidly deteriorating economy
characterized by growing fiscal deficit, rapid monetary expansion,
capital flight, and excessive government spending. Borja
implemented economic austerity measures that included sharp
currency devaluation, tax increases, import restrictions,
government spending reductions, and substantial increases in fuel
prices and electricity rates.
Data as of 1989
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