Ecuador country brief

Overview

Australia and Ecuador established diplomatic relations in 1975, when Australia's first Ambassador to Ecuador, A.H. Loomes presented credentials.

Australia's Embassy in Santiago, Chile is responsible for Ecuador. Australia has an Honorary Consulate in Guayaquil, which provides consular services to Australians in Ecuador. Ecuador maintains an Embassy in Canberra, Australia.

The Republic of Ecuador is located on the north-west Pacific coast of South America (including the Galapagos Islands) with an area slightly larger than that of Victoria. Ecuador lies on the Equator yet experiences a range of climatic conditions due to the Andes mountain range and Pacific Ocean currents. Ecuador is divided down the middle by the Andes mountains which include year-round snow-capped peaks and active volcanos, as well as the high mountain valleys where the capital Quito is situated. The eastern third of the country is dominated by the tropical Amazon basin while the western coastal areas range from tropical through to cloud forests as the altitude increases. Ecuador shares its border with Colombia to the north and Peru to the south and east. The name Ecuador means equator in Spanish.

Ecuador's population is 16.3 million (July 2017 est).Ninety-two per cent of Ecuadorians identify as being religious, with 80 per cent of those identifying as Catholic and 11 per cent as Christian Evangelical (2012 est).

Political overview

The Spanish conquered Ecuador in 1534 and incorporated Ecuador in the Spanish Vice-royalty of Peru. Ecuador gained independence from Spain in 1822, joining the Federation of Gran Colombia with Colombia, Panama and Venezuela. In 1830, Ecuador left to become an independent country. Political rivalry between the coast and the mountains, which emerged soon after independence, has become one of the country's defining political characteristics. Landowners from the mountain region combined with the Catholic Church to create a strong political alliance, opposed by the rapidly growing banking and agricultural (particularly cocoa) interests of the coast.

Ecuador's twentieth century political history is marked by instability. The collapse of the global cocoa market in the 1920s and the Great Depression of the 1930s created a period of political turmoil lasting until 1948, in which no single government completed a term in office. From 1948 to 1960, political order was restored as the economy improved with the benefit of the growing export of bananas. Instability again became a feature of Ecuadorian political life in the early 1960s, with the influence of the Cuban revolution leading to a series of military, anti-communist governments. The military has traditionally enjoyed a high degree of independence in Ecuador and exerted considerable political control. In 1972, a military government reserved petroleum exploration rights for the state. Modernisation of the state was in part paid for by the influx of petro-dollars during the boom period of the 1970s but also by heavy foreign debt commitments. A constitutional referendum in 1978 provided the basis for a return to civilian rule the following year.

Ecuador had nine presidents between 1984 and 2005, three of whom were dismissed due to social unrest and public pressure. Alfredo Palacio was sworn in as interim-president following a vote by Congress to dismiss his predecessor, Luis Gutierrez, in April 2005. Presidential elections were held in October 2006 with a run-off in November of the same year, which was won by current President Rafael Correa. Correa was reelected in 2009 and 2013.

Recent political developments

Lenin Moreno was sworn in as President of Ecuador on 24 May 2017 in Quito. Moreno served as previous President Correa's Vice President from 2007-2013 and then as the United Nations Special Envoy on Disability and Accessibility.

Moreno's actions in office have been a departure from his party's traditional policy. He allowed private banks to work with cash, has called for reforms to protect freedom of expression and cut high-ranking civil-servant salaries.

Due to an increasing separation of government and party policy, Moreno was removed as head of the governing Alianza País party on 1 November 2017 by supporters of former President Correa, though he retains the Presidency.

Moreno's priorities are to promote private sector investment, trim government spending and address corruption.

System of Government

Ecuador is a constitutional republic headed by an elected president, with a unicameral legislature. The president is elected to a four-year term and is able to serve one consecutive term.

The National Assembly is comprised of 137 members who are elected in 24 provincial constituencies for a four-year period. The Constitutional Court replaced the Supreme Court as the highest court in the land under the 2008 constitution.

Foreign Policy

Ecuador is a member of several regional political and economic groupings including the Bolivarian Alliance for the Americas (ALBA), the Organization of American States (OAS), Community of Latin American and Caribbean States (CELAC), the Union of South American States (UNASUR), and the Community of Andean Nations (CAN). Ecuador has also made a formal request to join Mercosur (it is currently an associate), and is an observer to the Pacific Alliance (Chile, Colombia, Mexico and Peru).

Ecuador's relationship with Colombia has steadily improved following a violation of Ecuadorian territory by Colombian government forces in 2008. Colombian government forces launched a military attack against the Colombian guerrilla group, the Revolutionary Armed Forces of Colombia (FARC) inside the Ecuadorian border and Ecuador subsequently broke off diplomatic relations with Colombia. Diplomatic relations were restored in June 2008 and in December 2011, President Correa and Colombia's President Santos signed a maritime border treaty and a security cooperation agreement during the first bilateral visit by a Colombian president to Ecuador in four years.

The United States is Ecuador's main trading partner. China is an important source of finance, contributing to major infrastructure projects.  Ecuador has signed loan agreements in exchange for oil with China, and has initiated the large-scale copper mining project Ecuacorriente, operated by Chinese firm ECSA. Chinese investments in Ecuador's energy sector are also expected to grow. Relations with China were upgraded to a 'comprehensive strategic partnership in November 2016 during a state visit by the Chinese President Xi Jinping.

Bilateral Relations

In November 2017, the Australia-Ecuador Business Summit was held in Quito to promote Australia's expertise and capacity to support Ecuador's growing mining sector. An 18-member Australian company and institituion delegation was led by Australia's Ambassador to Ecuador Robert Fergusson and some 180 Ecuadoreans participated in the Summit. The Summit focussed on Australian capability in mining exploration and early construction phases, particularly skills development, drilling and responsible resource management including water, the environment and community relations.

Australia and Ecuador have concluded MOUs on mining cooperation (2015); air services (2014) to allow code-share flights; and establishing political consultations (2011).

Australia cooperates with Ecuador in the Forum for East Asia Latin America Cooperation (FEALAC) and the South Pacific Regional Fisheries Management Organisation (RFMO).

In 2001, the Australian Government established the Council on Australia-Latin America Relations (COALAR) which aims to enhance commercial, political and cultural relations between Australia and Latin America. Since its inception, COALAR has been active in promoting business, education, tourism and cultural links between Australia and Latin America. For updates on COALAR activities and information on the annual grants program, follow COALAR on Facebook.

People to people links

Australia is the largest non-Spanish speaking recipient of Ecuadorean students on Ecuador government scholarships. In 2017, there were 622 enrolments by Ecuadorian students in Australia.

Endeavour Scholarships and Fellowships and Endeavour Mobility Grants support two-way engagement between Australia and the rest of the world. In 2018, Ecuadorian scholars were offered three Endeavour Postgraduate Scholarships, while 22 Australian students will have a study experience in Ecuador under the Endeavour Mobility Grants program. Ecuadorian scholars have been awarded a total of four Endeavour Scholarships and Fellowships from 2008 to 2018, while 109 Australian students have had a study experience in Ecuador.

In October 2016, Australia's Ambassador to Ecuador inaugurated the Australian contemporary art exhibition Fragil at Ecuador's most important cultural festival, the Cuenca Bienal. The exhibition, made possible with funding from COALAR and the Australia Council for the Arts, included works from four renowned artists and saw Australia take stage as the ‘highlighted nation' at the festival.

Development assistance

Ecuador has received a total of 36 Australia Award Fellowships (including the current round).

The Australian Embassy in Santiago manages a Direct Aid Program (DAP), which provides financial support to a broad range of projects in Ecuador, including community development projects and those designed to address challenges in vulnerable communities. In 2015-16, the Embassy provided close to $60,000 in funding to Ecuadorian NGOs, including funding to build emergency shelters for victims of the devastating 7.8 magnitude earthquake which struck Ecuador's coast on 16 April 2016.

From 2010 to 2014, Australia provided $100 million in official development assistance to Latin America, including 250 Australia Awards scholarships Projects funded during this period which will continue to be implemented into 2018. Ecuador received 13 Australia Awards Scholarships.

Economic overview

For latest economic data, refer to the Ecuador fact sheet [PDF 65 KB]

Economic Outlook

Ecuador's economy is dominated by petroleum production and agriculture for domestic consumption and export. Ecuador's economy contracted by 1.6 per cent following a 2.2 per cent contraction in 2016 caused by low oil prices, a high US dollar (the Ecuadorian economy is dollarized) and a cut in capital spending.

According to Ecuador's Planning and Development Secretariat, over 1.5 million Ecuadorians have transitioned out of poverty since 2007. In 2017, unemployment rose to 5.7 per cent, up from 5.2 per cent in 2016. Inflation was low at -0.09 per cent.

Ecuador's mining sector has grown significantly in recent years off the back of greater investor certainty, access to cheap energy, abundant water resources and promising exploration results. Since the introduction of a new mining law in 2013, and the appointment of the country's first Mining Minister in 2015, Australian engagement in the sector has grown.

Bilateral economic and trade relationship

Two-way merchandise trade between Australia and Ecuador is small, but is increasing gradually. In 2016, trade totalled approximately $83 million. Australia's exports to Ecuador were $48 million in 2016, including $29 million in services. Australian imports from Ecuador totalled $55 million in 2016, including $25 million in services. Australian companies Cardno (engineering consultancy) and LatAm Autos (online auto classifieds) manage Latin America-wide businesses from Ecuador's capital, Quito.

Australia is positioned to become Ecuador's key partner as it develops a sustainable and responsible mining industry. Australian miners BHP, FMG, Hancock Resources, Sol Gold and Newcrest are active in Ecuador.

Trade and Investment

Opportunities to strengthen bilateral trade and investment ties exist in the energy and mining sectors. Ecuador has implemented an investor-friendly mining regime to take advantage of its good geology. Newcrest has taken a ten per cent stake in Ecuadorian miner SolGold and will provide the technology required to develop a world-class copper-gold deposit.

There may also be potential for Australian companies to invest in telecommunications services and equipment, port infrastructure and information technology (though many of these opportunities will depend on the ongoing privatisation process). Cooperation in agribusiness and tourism could also lead to further business opportunities. The educational services sector holds good potential, and is growing, albeit from a low base.

High Level Visits

Ecuadorian Minister for Mining, Javier Córdova visited Australia in November 2017 and 2016 to attend the International Mining and Resources Conference in Melbourne, and in May 2015 to attend the Latin America Down Under mining conference in Sydney.

Bilateral Senior Officials Talks were held, with the Ecuadorian side being led by Vice Minister for Foreign Affairs, Ambassador Leonardo Arízaga. A second round took place in Quito in September 2017.

A Parliamentary Delegation led by the Speaker of the House of Representatives, the Hon Bronwyn Bishop MP, visited Ecuador in January 2015 to attend the Asia-Pacific Parliamentary Forum (APPF) held in Quito.

 

Last updated: December 2017

Last Updated: 8 December 2017