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1 1 (May 20, 2019)

handle is hein.crs/govztm0001 and id is 1 raw text is: I Congressional Research Serce Iform qthe legislative debate s nce 1914 0 May 20, 2019 Ecuador: An Overview Political and Economic Situation Ecuador is a small, ethnically diverse country of 16.5 million inhabitants located in South America between Colombia and Peru. In April 2017, Lenfn Moreno was elected president from the leftist Alianza Pais (AP) party, succeeding President Rafael Correa (2007-2017), a populist leader of the same party. Correa, Ecuador's longest-serving president, was re-elected three times, bringing some stability to Ecuador's tumultuous politics. Many thought Correa's Citizens' Revolution' would continue under President Moreno, who served as Correa's vice president for six years. President Moreno, however, quickly distanced himself from Correa in style and substance. In recent months, Moreno has adopted market-friendly policies, shown interest in closer relations with the United States, and rejected Venezuela's government under President Nfcolas Maduro, which Correa had promoted as an ally. Moreno narrowly won a runoff election with slightly more than 2% of the vote. Correa's two former vice presidents were on the winning ticket: Moreno at the top and Jorge Glas as Moreno's vice president. Once in office, Vice President Glas remained close to Correa, while President Moreno moved quickly to adopt a more moderate tone. In October 2017, President Moreno suspended Glas due to allegations that he had taken bribes from the Brazilian construction firm Odebrecht when he oversaw Ecuador's petroleum company. Odebrecht has been the focus of corruption prosecutions throughout Latin America. In December 2017, Glas was convicted and sentenced to six years in prison for taking $13.5 million in bribes from Odebrecht executives. He was impeached in January 2018 and removed from office. President Moreno has taken additional steps to limit Correa's lingering influence in politics, which many analysts characterized as anti-democratic. In February 2018, Moreno organized a referendum that would prohibit indefinite reelection (including Correa's return to office) and address corruption. While all measures on the ballot passed, the results deepened fissures between AP members loyal to Correa and those aligned with Moreno. During the campaign against the referendum, Correa convinced 28 of the 74 AP legislators to join a new, Correa-based party. President Moreno currently has support from 58 legislators (out of 137 in the National Assembly), which include his wing of the AP in coalition with some smaller parties. To achieve passage of priority legislation, Moreno must seek to shore up coalitions, because his supporters lack a majority. In Ecuador's municipal elections in March 2019, many analysts noted a fracturing of the political landscape, as none of President Moreno's political allies won a significant victory. This was particularly striking in elections for mayor in the country's largest cities of Guayaquil and Quito (Figure 1). Figure I. Ecuador at a Glance Area: 109,483 square miles, smaller than the state of Nevada Leadership: President: Lenin Moreno; Vice President: Otto Sonnenholzner; Minister of Foreign Relations: Jos6 Valencia 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) Poverty Rate: 23.2% (2018, World Bank) Economy: GDP: $107.3 billion (current US $, 2018 IMF est.) Historically, Ecuador has relied on commodity exports, such as bananas, shrimp, and coffee. Discovery of oil in the Amazon in 1967 transformed the Ecuadorian economy, but the country remains largely dependent on commodity exports despite efforts to diversify away from oil. In 2000, Ecuador adopted the U.S. dollar as its national currency following a major recession in 1999. Dollarization helped curb inflation and fostered some macroeconomic stability. However, according to numerous assessments, strong growth under Correa was driven by a public investment boom fueled by high oil prices and lending from China, including loans for oil. The Correa government took on extensive debt from China for its construction projects that is partially payable with oil shipments to China. One of the largest projects, the Coca Coda Sinclair hydroelectric project, cost some $2.9 billion but reportedly had significant design flaws. Ecuador's total trade with China increased from $234 million in 2002 to $5.2 billion in 2018. China was Ecuador's second-largest trade partner in 2017, accounting for 16% of imports and almost 7% of exports. The United States, however, remained Ecuador's largest trading partner, accounting for 27% of total trade. Public opinion regarding China soured in 2017, when the Ecuadorian navy captured a Chinese fishing ship in the country's territorial waters near the Galapagos with 300 tons of illegally caught sharks. ttps:/crsreportscon eg

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