Economy

Until a petroleum boom began in the early 1970's, agriculture was the mainstay of Ecuador's economy. It is still an important sector, providing about one-third of all employment and many of the nation's exports. Most of the arable land is owned by a tiny minority of Ecuadorians—the landed upper class. Farmers are largely illiterate and poor. Virtually all the Indians are subsistence farmers.

Both tropical and temperate crops are grown. Commercial plantations of bananas, coffee, cacao, sugarcane, rice, and cotton are typical along the coastal plain. In the hill country and mountain valleys, temperate crops are grown, mostly for home use. These crops include cereals, especially corn; vegetables, particularly beans and potatoes; and fruits. Except on large plantations, farming methods are poor and crop yields are low.

Until 1972 the production of minerals was insignificant. Since then, crude oil has become a major product—a result of the discovery of large petroleum deposits in the Oriente in the late 1960's and completion of a trans-Andean pipeline to the Pacific coast near Esmeraldas in 1972. Income from petroleum made possible a favorable balance of trade. Small amounts of gold, silver, copper, and zinc are mined.

Ecuador's forests are a potential source of wealth. Among the commercial forest products are hardwood, balsa wood, tagua nuts, cinchona bark (the source of quinine), palm fibers, rubber, palm oil, and kapok.

Fish are plentiful in rivers and coastal waters and commercial fishing is an increasingly important sector of the national economy.

Ecuador's manufacturing accounts for only about 13 per cent of the country's employment. Textiles, mostly cottons, rank as the leading product, engaging a high percentage of the manufacturing labor force. Other manufactured goods include petroleum products, processed foods, chemicals, drugs, leather goods, and cement. Panama hats, made of toquilla straw, come chiefly from Ecuador. Guayaquil and Quito are Ecuador's chief manufacturing centers.

Petroleum accounts for roughly one-half to two-thirds of the value of all exports. Bananas, coffee, cacao, and shrimp make up most of the rest.

Railway and highway construction is difficult and costly in Ecuador, largely because of the rough terrain. Nevertheless, the government is improving and extending the limited transportation system. Railways are nationally owned and connect most of the major cities. The Pan American Highway, which runs between two parallel ranges of the Andes, is Ecuador's principal north-south route. Most of the highways extend westward to the coast; a few go east ward into the Oriente. Guayaquil, the largest city, is the major seaport. All leading cities are linked by regular air service. There are international airports near Quito and Guayaquil.