Ecuador is a South American nation located in the western section of the continent where it spans an area of roughly 109,484 square miles. Different international financial organizations classify the Ecuadorian economy as a developing country. In 2017, the Ecuadorian gross domestic product was ranked as the 62nd highest in the world at roughly $103 billion. On the other hand, the country's per capita GDP was ranked as the 86th highest at $6,216. Ecuador's economy is heavily dependent on the country's natural resources that range from arable land to petroleum.
One of Ecuador's most important natural resource is arable land which made up 4.3% of the country's total land area in 2015. From 2014 to 2015 the amount of arable land in Ecuador increased at a significant rate. Since ancient times agriculture has been one of Ecuador's most important economic activities. Presently, the agricultural sector is one of the major employers in the country and in 2010 the sector employed more than 27.5% of the Ecuadorian labor force. Despite a large number of people employed in the sector, it only accounts for 8.4% of the GDP in the country as of 2012. Ecuadorian farmers grow a wide array of crops including potatoes, coffee, and rice most of which are meant for the domestic market. Ecuadorian farmers also grow other crops for the export market such as fruits and flowers. In 2001, Ecuador exported more bananas than any other nation in the world at roughly 3.5 million tons. During the mid-1970s, Ecuadorian farmers exported vast quantities of cacao; however, the reduced price of cacao globally discouraged the farmers from growing cacao. The Ecuadorian agriculture sector faces several challenges with the most significant one being competition from cheap imports mainly from the US. To improve the country's agricultural sector, the Ecuadorian government has urged farmers to utilize modern agricultural techniques.
In 2015, more than 50% of the land in Ecuador was covered with forests according to data from the World Bank. The data indicated that since 2004, Ecuador's forest cover has decreased at a gradual rate which was mainly attributed to increased utilization of the forests for timber. Ecuador has a wide variety of forests such as dry forests, moist forests, and cloud forests. According to the Ecuadorian forestry department, dry forests cover roughly 8,200 square miles of land. In the past, dry forests covered a more significant area in Ecuador; however, due to the deforestation, only less than 1% of the original dry forest remains. The Ecuadorian dry forests are home to a wide range of mammals such as the white-fronted capuchin, ocelots, and white-tailed deer. Several bird species also make their home in the Ecuadorian dry forests such as buffy tufted cheek, crowned wood nymph, and grey-backed hawks. The Ecuadorian cloud forests are also home to several animal species such as howler monkeys, jaguars, sloths, and bears.
Ecuador has vast fish resources ranging from both marine fish to freshwater fish. Marine fishing in Ecuador takes place mainly in the Pacific Ocean which borders the nation on its western edge. Ecuador is situated at the junction of a cold and warm current which ensures that the country has vast quantities of marine fish within its territorial waters. Some of the fish most commonly found in Ecuador's territorial waters include marlin and tuna. Due to the vast quantities of tuna in the country, Ecuador has become one of the leading tuna exporters in the region. Apart from tuna, Ecuador also produces vast quantities of shrimp. Ecuadorian fishers have purchased large ships to increase the amount of fish caught in the country. Apart from commercial fishing, Ecuador is famous among sports fishers. Several luxury resorts have been established to cater to a large number of sports fishers who visit the country.
One of the essential natural resources in Ecuador is water chiefly because it is used in the generation of hydroelectricity. In the past, Ecuador was heavily reliant on fossil fuels to satisfy its energy requirements; however, the government decided to shift to hydroelectricity. According to the Ecuadorian government as of 2006, hydroelectricity accounted for roughly 44% of the energy used in the country. The Ecuadorian government planned to increase the number of hydro-power projects in the country further to increase the country's hydro-power production. The country's energy department estimated that after the projects were completed, more than 90% of the country's electricity would be produced through hydro generation. One of Ecuador's most well-known hydro-power projects is the Coca Coda Sinclair plant which has an installed capacity of 1,500MW and was completed in 2016. The Ecuadorian government partnered with the Chinese government to secure funding for the country's hydro-power projects.
Ecuador has significant petroleum reserves that are some of its most important natural resources. Historical evidence indicates that oil was first produced in Ecuador in the 20th century. At the moment, the Ecuadorian government estimated that the country produced roughly 540,000 barrels of oil each day and oil was the country's most essential export commodity. Recent geological surveys indicated that Ecuador had roughly 4 billion barrels of oil within its borders. Due to the vast size of its reserves, Ecuador is one of the members of OPEC. Ecuador faces stiff resistance in exploiting its oil reserves from indigenous communities and environmentalist who claim that the oil drilling operations will have devastating effects on the country's natural landscape. The Ecuadorian government has however denied those claims and stated that oil exploitation would be extremely beneficial to the country's economy. The most significant challenge facing the Ecuadorian oil sector is the fluctuating price of oil in the global market which makes it difficult to determine the profits that the country could obtain from oil.
The Ecuadorian Economy
The economy of Ecuador is among the fastest growing in the region, and from 2000 to 2006, the country's economy grew at a rate of roughly 4.6% each year. The major challenge facing the country's economy is the high poverty rate and the country's high unemployment rate.