Ecuador Archives - Economy Watch

Ecuador Turns to IMF for Post-Quake Relief

A devastating earthquake struck Ecuador on April 18. The quake left 659 dead and caused an estimated $2 to $3 billion (US) in property damage. The damage has left Ecuador shattered emotionally and economically.

As a result, Ecuador has reached out to various nation-level lenders to seek help with the rebuilding process. Chief among the organizations with which the Latin American nation is negotiating is the International Monetary Fund (IMF). Ecuador announced the negotiations on Thursday.

World Bank Arbitration Panel Orders Ecuador to Pay $1.8 Billion to US Company

The World Bank’s arbitration panel has ordered the Latin American nation of Ecuador to pay $1.8 billion (plus interest) to an American oil company Occidental Petroleum for cancelling a contract. Occidental sued Ecuador for $3.37 billion in May 2006, one day after it received notice from Ecuador regarding the cancellation of a contract to extract 100,000 barrels of oil a day from Ecuador’s Amazon basin. That amount equates to about 20 percent of Ecuador’s output of oil.

Ecuador Targets Chinese Oil Bids For Amazon Land

Ecuador could auction off more than three million hectares of Amazonian rainforest to Chinese oil companies as part of a global road-show to develop its oil industry, reported The Guardian on Tuesday, though the Ecuadorian government may face protests by indigenous groups, who claim to have not consented to any oil projects.

Ecuador – Fast Facts

Ecuador is an Lower Middle Income economies comes under Latin America and Caribbean region as to the classification made by the world bank on the basis of income and region for the year 2006.

The Ecuador economy largely dependent upon petroleum type products. It has experienced a fast recovery in the commencement of twenty first century following the record prices in the petroleum products.

Ecuador Economic Forecast

Ecuador’s economy is largely dependent on oil and gas resources. In fact, these resources account for approximately 50% of the country’s export revenue, as well as 25% of earnings for public sectors. Unfortunately, in 1999 and 2000, this country experienced a horrific economic crisis, a time when the Gross Domestic Product or GDP had decreased by as much as 6%. At that time, financial services offered by banks and financial institutions collapsed, poverty increased dramatically, and as a result, public state debt to outside resources was defaulted on.