Ecuador’s Uphill Battle

By Kirk Siegler | October 29, 2015 | Ecuador

So it occurs to me that I both started and will finish my dispatches from Ecuador with a photo from Quito’s Centro Historico. Unlike the first post, this one is looking up rather than down one of the capital’s historic streets. (Two weeks later, I still haven’t adjusted to the altitude, by the way).

Okay, maybe I’m pushing a little cheeky symbolism on you with this photo. But after spending a couple weeks here and talking to as many people as I could, it’s clear that Ecuador is facing an uphill battle when it comes to the economy. 

Much of it has to do with the country’s dependence on oil.

As one source who is a former secretary-general of the country told me, “Ecuador’s salary is oil.”

With oil prices expected to stay flat – and historically low – there is serious pessimism here about the near future. Unemployment is up, people are worried about layoffs in the government and the private sector, and the high value of the US dollar means goods and services are becoming extraordinarily expensive.

See, all that oil revenue since the last economic crisis in the late 1990s fueled a boom and helped the Ecuadorian government pay for some impressive new infrastructure – excellent highways, new hospitals, schools – including a new tech university, a personal pet project of President Rafael Correa. Last but not least, there’s a slick new airport in Quito that I’m about to hail a taxi to.   

It’s also hard not to draw another parallel to the last time Ecuador slipped into financial peril. 

This one is environmental. 

One of the main drivers behind the last financial crisis – in addition to historically low oil prices back then too – was the 1997 El Niño. It devastated this country’s agricultural sector. As you’ve probably heard, we’re heading into another potentially “Godzilla” El Niño in the Pacific Ocean this winter. 

Unlike in California where the El Niño is seen as having the potential to ease a devastating drought, here in Ecuador, the storms are a serious threat to banana plantations and other key export crops along the country’s coastal plains.

The good news is that many people I spoke with in the government and private sector said they felt farmers are better prepared this go-round. And as for oil, many of these same sources said this latest financial crisis may force Ecuador to diversify its economy. 

More on that to come in the days ahead on the air and online. For now, I’ve got a flight to catch. 

Kirk Siegler is reporting from Ecuador on a fellowship with the International Reporting Project (IRP). This post was also published on NPR's On the Road

View All Posts By Kirk Siegler

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