Organization of American States, hard blow, disputed area, Axis powers, military group
The next half century was marked by both economic and political instability. Starting in the 1920s, bananas were a major export crop, and Ecuador eventually became the world's leading banana exporter. Thus the collapse of world markets for farm products during the Great Depression of the 1930s dealt Ecuador a hard blow. The country also suffered a military disaster in 1941, when it was invaded and partly occupied by Peru. An inter-American arbitration commission later awarded Peru sovereignty over a vast stretch of land in the Amazon basin that had been in dispute between the two countries ever since the breakup of Gran Colombia in 1830. Ecuador later repudiated the arbitration award, and the border between the two countries remained a point of contention until the end of the 20th century.
Ecuador followed the United States into World War II (1939-1945) against the Axis powers. At home, the end of the war coincided with a waning of Liberal influence. In 1944 the Liberal president Carlos Alberto Arroyo del Rio, formerly president of the Chamber of Deputies, was forced from office and replaced by former President Jose Maria Velasco Ibarra, who had held office in 1934 and 1935 and who was supported by the Conservative faction. In 1945 Ecuador became a charter member of the United Nations. A new constitution, promulgated in December 1945, remained in force until 1967.
In 1947 Velasco was deposed by a military group that was almost immediately ousted by counterrevolutionaries. After a brief rule by a provisional government, Galo Plaza Lasso, a former ambassador to the United States, was elected president in June 1948. In early 1948 Ecuador attended the ninth Inter-American Conference in Bogota, Colombia, and became a signatory of the charter of the Organization of American States.
The long-standing border dispute with Peru, which had been revived in 1941, cropped up again in 1950. Both times the issue was submitted to arbitration. Most of the disputed area had been awarded to Peru in 1942, and no boundaries were changed following the 1950 incident. (In 1960, reviving the dispute, Ecuador unilaterally nullified the 1942 settlement.)
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