political context

Ecuador, situated on the Pacific coast of South America, covers an area of 283,560 square km and boasts high biological diversity, including the world famous Galapagos Islands.

Advanced indigenous cultures flourished prior to the arrival of the Incas, who made Quito their capital in the 15th century before falling to the Spanish in 1534. Independence forces defeated the Spanish in 1822 and Ecuador joined Simon Bolivar's Republic of Gran Colombia before becoming an independent republic in 1830.

The majority of Ecuador's 13.7 million people are mestizo or indigenous. The official language is Spanish, although Kichwa is the first language for most indigenous people in the highlands. The indigenous people in Ecuador make up a large proportion of the 70 per cent of the population that lives below the poverty line.

Ecuador's main exports are oil, banana, shrimps, cacao and flowers. The country's foreign debt is more than US$14 billion. By the end of the 20th century a combination of factors, including falling oil prices and the collapse of the banking sector, drove the economy into recession. Rampant inflation, the highest in the region, led to the government's decision to replace the national currency with the US dollar in an effort to stabilise the economy.

In January 2000, an indigenous uprising supported by the army colonel Lucio Gutiérrez overthrew Jamil Mahuad, the elected president. The coup was built on a groundswell of anger including charges of corruption, the banking collapse and IMF-inspired austerity measures such as privatisation.

Gutiérrez spent six months in jail when army officials and the congress appointed Mahuad's vice president, Gustavo Noboa, as his successor. However Gutiérrez returned to win the runoff vote against Alvaro Noboa (no relation to Gustavo) in the presidential elections in November 2002, riding a wave of support from the impoverished indigenous community who were won over by his promises to end corruption and to fight for social justice.

Gutiérrez's Patriotic Society Party (PSP) forged an electoral alliance with the political arm of the indigenous community, Pachakutik. The PSP signed an agreement that included pledges to end strict adherence to neo-liberal economic policies, to resist the proposed agreement Free Trade Area for the Americas (FTAA) and to bring in sweeping new anti-corruption legislation.

In August 2003, Pachakutik accused the government of: betraying its popular mandate; endorsing neo-liberal policies set out by the IMF; and swinging to the right rather than representing Ecuador's indigenous and peasant communities who brought the coalition to power. The coalition between Gutiérrez's PSP and Pachakutik broke down.

Surprisingly, the indigenous movement did not take part in the ousting of president Lucio Gutiérrez on 20 April 2005, the third since 1977. Former vice-president Alfredo Palacio dismantled his predecessor's work on economic and social policies and had to manage the relationship between Ecuador and the US and, in particular, decide what to do with the US base in Manta. Communities living along the Colombian border demanded an end to the US government's fumigation of coca plantations with toxic chemicals. Oil revenue is one of Ecuador's best assets, but President Palacio faced the challenge of how best to use this asset and to handle the indigenous movement.

In April 2006 Alfedo Palacio withdrew Ecuador from the Free Trade Agreement and ended the country's contract the with Occidental Oil company. Rafael Correa was elected president in October 2006 on a left-wing platform of increased people's partipation, challenging political establishment and opposition to US policies including the FTA, Manta military base and Plan Colombia, bringing Ecuador in line with Venezuala and Bolivia. Delivery of campaign promises on increased social spending, legislation on energy resources and constitutional reform to increase popular participation has increased public support and business opposition. NGOs and social movements are pushing for redistribution of wealth and democratic reform.