The "Republic of the Equator" was one of three countries that emerged from the collapse of Gran Colombia in 1830 (the others being Colombia and Venezuela). Between 1904 and 1942, Ecuador lost territories in a series of conflicts with its neighbors. A border war with Peru that flared in 1995 was resolved in 1999. Ecuador was a Spanish colony until 1822, when independence forces won a decisive victory over Spain. Ecuador has had a democratically elected government since 1979, but historically the government has alternated between civilian rule and military dictatorship. Most political conflicts involved squabbles among groups within the upper classes who controlled the nation’s wealth.

PEOPLE
Ecuador's population is ethnically mixed. The largest ethnic groups are indigenous and mestizo (mixed Indian-Caucasian). Although Ecuadorians were heavily concentrated in the mountainous central highland region a few decades ago, today's population is divided about equally between that area and the coastal lowlands. Migration toward cities--particularly larger cities--in all regions has increased the urban population to about 55%. Due to the recent economic crisis, more than 600,000 Ecuadorians emigrated to the U.S. and Europe from 2000 to 2001. The tropical forest region to the east of the mountains remains sparsely populated and contains only about 3% of the population.

HISTORY
Advanced indigenous cultures flourished in Ecuador long before the area was conquered by the Inca empire in the 15th century. In 1534, the Spanish arrived and defeated the Inca armies, and Spanish colonists became the new elite. The indigenous population was decimated by disease in the first decades of Spanish rule--a time when the natives also were forced into the "encomienda" labor system for Spanish landlords. In 1563, Quito became the seat of a royal "audiencia" (administrative district) of Spain.

After independence forces defeated the royalist army in 1822, Ecuador joined Simon Bolivar's Republic of Gran Colombia, only to become a separate republic in 1830. The 19th century was marked by instability, with a rapid succession of rulers. The conservative Gabriel Garcia Moreno unified the country in the 1860s with the support of the Catholic Church. In the late 1800s, world demand for cocoa tied the economy to commodity exports and led to migrations from the highlands to the agricultural frontier on the coast.

ECONOMY
The Ecuadorian economy is based on petroleum production and exports of bananas, shrimp, and other primary agricultural products. In 2001, oil accounted for about 27% of public sector revenue and 40% of export earnings. Ecuador is the world's largest exporter of bananas ($846 million in 2001) and a major exporter of shrimp ($280 million in 2001). Exports of nontraditional products such as flowers ($229 million in 2001) and canned tuna ($268 million in 2001) have grown in recent years. Industry is largely oriented to servicing the domestic market.

Deteriorating economic performance in 1997-98 culminated in a severe economic and financial crisis in 1999. The crisis was precipitated by a number of external shocks, including the El Nino weather phenomenon in 1997, a sharp drop in global oil prices in 1997-98, and international emerging market instability in 1997-98. These factors highlighted the Government of Ecuador's unsustainable economic policy mix of large fiscal deficits and expansionary money policy and resulted in an 7.3% contraction of GDP, annual year-on-year inflation of 52.2%, and a 65% devaluation of the national currency in 1999.

U.S.-ECUADORIAN RELATIONS
The United States and Ecuador have maintained close ties based on mutual interests in maintaining democratic institutions; combating narcotrafficking; building trade, investment, and financial ties; cooperating in fostering Ecuador's economic development; and participating in inter-American organizations. Ties are further strengthened by the presence of an estimated one million Ecuadorians living in the United States and by 150,000 U.S. citizens visiting Ecuador annually, and by approximately 17,000 U.S. citizens residing in Ecuador. More than 100 U.S. companies are doing business in Ecuador.

Full country name: Republic of Ecuador
Area: 283,520 sq km (175,780 sq mi)
Population: 12,920,092 (growth rate: 2.1%)
Capital city: Quito (pop 1.5 million)
People: 40% mestizo, 40% Indian, 15% Spanish descent, 5% African descent
Language: Spanish, Quechua, Quichua, other indigenous languages
Religion: Over 90% Roman Catholic, small minority of other Christian denominations
Government: Democracy
President: Rafael Correa
GDP: US$58.7 billion
GDP per head: US$4,800
Inflation:43%
Major industries: Oil, bananas, shrimp, fish, coffee, textiles, metal work, paper products, wood products, chemicals, plastics, fishing, lumber
Major trading partners: US, Latin America, EU, Asia, Caribbean