History, Economic Stagnation
Sixto Duran Ballen, expansionary policies, bad floods, runoff election, judicial powers
Hurtado attempted to continue the reformist and expansionary policies of his predecessors, but Ecuador's excessive burden of foreign debt rendered him unable to overcome the effects of international recession and falling world demand for petroleum. The 1980s became a decade of stagnation, made worse by bad floods in 1983, the collapse of world oil prices in 1985 and 1986, and a devastating earthquake in 1987.
In 1984 a conservative businessman, Leon Febres Cordero Rivadeneira, won the presidency in a runoff election against a left-wing opponent. He proposed to keep Ecuador from defaulting on its foreign debt by devaluing the currency, cutting public spending, lessening protection of domestic industries, and reducing real wages. But these policies, which drew strong opposition from Ecuador's labor unions and opposition parties, were even less successful than the nationalistic policies of the preceding regimes. In 1986 Febres Cordero's Social Christian Party was badly beaten in midterm parliamentary elections. In 1987 Ecuador finally was forced to suspend indefinitely all payments on its foreign debt, which by then had soared well beyond $9 billion. The Febres Cordero government had to put down repeated military rebellions, including a January 1987 uprising in which the president was seized and beaten.
Rodrigo Borja Cevallos of the Democratic Left became president after winning a runoff election in 1988. Borja was unable to reduce inflation, unemployment, and the foreign debt, and his party suffered major losses in parliamentary elections in 1990 and 1992.
Succeeding him as president in 1992 was Sixto Duran Ballen, who was born and educated in the United States. Duranís government instituted privatization measures, resulting in the breakup of Petroecuador, the state-owned oil company. Other measures included land-reform efforts requiring that unused land be sold rather than given to poor farmers, a policy that provoked massive protests. In 1994 congressional elections resulted in increased opposition to Duranís conservative policies, but in a plebiscite held the same year, voters approved most of Duranís proposed constitutional reforms. In 1995, however, voters rejected a number of proposed reforms, including privatization of the countryís health and social security systems and a restructuring of the presidential, congressional, and judicial powers. Loyalty to Duranís government had waned earlier that year following a scandal in which Ecuadorís Supreme Court gathered enough evidence to arrest the countryís then-vice president, Alberto Dahik Garzoni, on charges of embezzlement. Dahik resigned his post and fled to Costa Rica to seek political asylum. The Chamber of Representatives elected former Education Minister Eduardo Pena to the vacant seat.
Also in early 1995 Ecuador became involved in skirmishes with Peru in the border region claimed by both countries. Fighting lasted for almost two months until a cease-fire was signed. In 1998 Ecuador and Peru signed a peace treaty that finally ended their long-standing border dispute.
Article key phrases: