latifundia, urban construction, foreign debt, Guayaquil, social inequalities
Agriculture has traditionally been the basis of the Ecuadorian economy. For most of the century and a half after 1822, when Ecuador won its independence from Spain, the Ecuadorian economy underwent only sluggish development and remained predominantly agrarian. The highlands, where most of the people lived, displayed a sharp social division between the masses of Native American peasants and a small class of rich creole (individuals of Spanish descent) landlords. The Indians generally farmed small plots, using traditional methods, on latifundia (big estates) owned by the creole elite. Ecuador's main exports were cacao, coffee, and, later, bananas. Limited commercial and industrial development occurred along the coastal area centering on the country's commercial capital, Guayaquil.
In 1965, however, an industrial development law was passed that brought about the establishment of factories manufacturing textiles, electric appliances, pharmaceuticals, and other products. In the 1970s substantial amounts of petroleum began to be produced and exported, with the completion of the trans-Andean pipeline providing a line between oil fields and the port of Esmeraldas. The profitable exploitation of petroleum produced rapid economic growth. Substantial progress was made in education, public health, irrigation, hydroelectric power generation, transportation, urban construction, and industrialization. However, social inequalities increased, the highland Native Americans remained impoverished, and foreign debt grew to high levels.
In 2000 industrial production accounted for 40 percent of the gross domestic product (GDP) while agriculture, including fishing and forestry, accounted for only 10 percent. The GDP was estimated at $14 billion in 2000.
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