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1 1 (September 9, 2022)

handle is hein.crs/goveitf0001 and id is 1 raw text is: Congressional Research Servic liirrning the legislative debate since 1914 Updated September 9, 2022 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 sought to build on the accomplishments of his predecessor, President Lenfn Moreno (2017-2021), who implemented liberal political and economic reforms and pursued closer ties with the United States. Like Moreno, Lasso faces resistance from some sectors of the population, including the Indigenous leadership, and a divided legislature. Issues of broad interest to Congress include U.S. trade and investment with Ecuador, counternarcotics and environmental cooperation, and Ecuador's relationship with China. Political and Economic Background During a decade in power (2007-2017), leftist populist President Rafael Correa-Moreno's predecessor-brought some stability to Ecuador's previously tumultuous political scene. Correa 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 debt to China and reinforced Ecuador's dependence on petroleum and other commodity exports. Correa also governed in an increasingly authoritarian manner, constraining freedom of assembly and association, stifling freedom of the press and expression, and restricting judicial independence. Moreno, of Correa's Alianza Pais (AP) party, was elected president in 2017. Although he had served as one of Correa's vice presidents, Moreno quickly distanced himself from Correa in style and substance. Moreno sought funding from financial institutions such as the International Monetary Fund (IMF) and made efforts to curb corruption, revive democracy, and liberalize trade, resulting in backlash from his AP party and some sectors of Ecuadoran society. The fallout of the Coronavirus Disease 2019 (COVID-19) pandemic further eroded Moreno's popularity, who left office with an approval rating under 9%. 2021 Election and Current Challenges In April 2021, Lasso defeated Andres Arauz, a loyalist of former President Correa, in a second-round presidential runoff. Lasso's CREO party won 12 of 137 seats in the unicameral National Assembly elected in April. Inaugurated in May 2021, Lasso had campaigned on tax reforms intended to promote growth, import duty reduction, and a 2% income tax elimination on small- and medium- sized businesses. He also promised to double oil production and mining concessions. Lasso inherited a difficult economic situation. A crash in global oil prices and the pandemic drove Ecuador into a deep recession in 2020, when the economy contracted by nearly 8% and the poverty rate climbed to an estimated 33%. The economy began to recover in 2021, with 4.2% growth; the IMF projects it will grow by nearly 3% in 2022. 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: Juan Carlos Holguin; Finance Minister: Sim6n Cueva 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 (23.1%), China (18.6%), and Panama (7.9%) (Trade Data Monitor) Poverty Rate: 33% (2020, World Bank) Economy: GDP = $115.5 billion (current U.S. $, 2022, IMF est.) President Lasso has struggled to move his agenda through the divided National Assembly. His CREO party joined the new National Agreement (BAN) pro-government voting bloc, increasing Lasso's legislative support. However, the new legislature is dominated by the leftist opposition coalition, Unity for Hope (UNES), linked to former President Correa (see Figure 2). The Pachakutik (PK) party-the political party of the country's main Indigenous organization, the Confederation of Indigenous Nationalities (CONAIE)-is the second-largest party in the 2021-2025 National Assembly. Rising inflation and government-imposed fuel price increases prompted three weeks of social protest in June 2022. The protests, led by CONAIE, prompted the UNES coalition to attempt, unsuccessfully, to impeach President Lasso. The unrest also led to the replacement of the head of the National Assembly, a PK party member who is considered less likely to support the Lasso's agenda. The protests, at times violent, ended when the government conceded to enter into negotiations and reduce fuel prices. The talks reached a preliminary deal in September 2022,

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