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handle is hein.crs/govegnk0001 and id is 1 raw text is: Congr ssiona Res ar h Service informi th eg iatv debatsnc 1914 Updated September 8, 2021 Ecuador: An Overview Ecuador is a small, ethnically and geographically diverse country of 17.5 million inhabitants, located in South America between Colombia and Peru (See Figure 1). President Guillermo Lasso of the conservative Creating Opportunities (CREO) party took office for a four-year term in May 2021. He has pledged to build on the accomplishments of former President Lenin Moreno (2017- 2021), who implemented liberal political and economic reforms and pursued closer ties with the United States. Like his predecessor, Lasso could face resistance from some sectors of the population and in the divided legislature. Political and Economki Background During a decade in power (2007-2017), leftist populist President Rafael Correa brought some stability to Ecuador's previously tumultuous political scene. He governed in an increasingly authoritarian manner, however, constraining freedom of assembly and association, stifling freedom of the press and expression, and restricting independence of the judiciary. Correa also presided over a public investment-driven economic expansion, with growth averaging 5% annually between 2010 and 2014. Although stronger growth and increased social expenditures helped reduce poverty, Correa's policies left Ecuador with significant debts to China and reinforced Ecuador's dependence on petroleum and other commodity exports. In 2017, Lenin Moreno of the Alianza Pais (AP) party was elected president. Although he served as one of Correa's vice presidents, he quickly distanced himself from the former president in style and substance. Among other measures, Moreno sought funding from financial institutions such as the International Monetary Fund (IMF) and made efforts to curb corruption, open and liberalize trade, and strengthen democratic institutions. These shifts alienated some members of Moreno's party and generated backlash from some sectors of Ecuadoran society. In October 2019, for example, Moreno eliminated a fuel subsidy, triggering mass demonstrations and protracted protests. Human rights advocates accused security forces of using excessive force to quell the disruptive protests, which reportedly resulted in 11 civilian deaths. The fallout of the Coronavirus Disease 2019 (COVID-19) pandemic further eroded Moreno's popularity, and he left office after a single term with an approval rating under 9%. 202 Election and Current Challenges In April 2021, Guillermo Lasso, a conservative former banker and three-time presidential candidate, defeated Andres Arauz, a loyalist of former President Correa, in a second-round presidential runoff. Many observers found Lasso's victory a shock, given his first round showing, barely above the third-ranked candidate from the center-left Indigenous Pachakutik party (see below text box). Lasso's CREO party won 12 of 137 seats in the unicameral National Assembly. Figure I. Ecuador at a Glance Area: 109,483 square miles, slightly smaller than Nevada Leadership: President: Guillermo Lasso; Vice President: Alfredo Borrero; Minister of Foreign Relations: Mauricio Montalvo; Finance Minister: Sim6n Cueva Armigos Ethnic Makeup: 72% Mestizo (mixed Amerindian and White); 7.4% Montuvio (coastal farmers of mixed race and indigenous heritage); 7.2% Afro-Ecuadorian; 7% Amerindian; and 6.1% White (2010 census, National Statistics and Census) Key Trading Partners: United States (27.5%), China (20.6%), and the European Union (14.5%) (Trade Data Monitor, 2020) Poverty Rate: 25% (2019, World Bank) Economy: GDP = $96.7 billion (current U.S. $, 2020, IMF est.) Inaugurated in May 2021, President Lasso has pledged to implement a series of business-friendly reforms. He campaigned on tax reforms intended to promote growth, reduce import duties, and eliminate a 2% income tax on small and medium businesses. He also promised to double oil production and mining concessions. Lasso may struggle to move his agenda through the divided National Assembly, however, given the relatively weak position of his CREO party. The new legislature, seated in May 2021, is dominated by the leftist opposition coalition, UNES, linked to former President Correa. President Lasso inherited a difficult economic situation. A crash in global oil prices and the COVID-19 pandemic drove Ecuador into a deep recession in 2020. The economy contracted by nearly 8% and the poverty rate climbed to an estimated 30.8%, according to the Economic Commission for Latin America and the Caribbean. Several economists project a relatively weak recovery for Ecuador in 2021 but forecast growth exceeding 4% in 2022 and the recovery of 2019 output levels by 2023. Ecuador has managed to plug its large fiscal deficit- projected to reach $4.8 billion (4.6% of GDP) in 2021- with credits and deferrals. In September 2020, for example, the IMF granted Ecuador a 27-month extended arrangement for a $6.5 billion loan to address the crisis caused by the

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