Ecuador relies on two volatile and fluctuating industries which are held responsible for the wellbeing of Ecuador’s economy. This is because the chief products of these industries are primary products. Globally, demand for primary products is volatile, compared to manufacturing. A result of this riskiness would be the economic downturn in 1999 which drastically increased poverty and shrunk GDP. This resulted from two strokes of misfortune in 1998 when international prices for oil decreased and their shrimp were struck by a virus.
|chorizos with llapingachos|
Petroleum is the major industry in Ecuador and their economy relies heavily of the fluctuating international price of oil. The nation’s largest oil field is ‘Occidental's Eden Yuturi’ which, in the first half of 2004, produced more than 75,500 barrels of oil per day. Another geographical advantages that Ecuador has in industry is Ecuador’s Amazon basin which facilitated their membership into OPEC (Oil and Petroleum Exporting Countries). Petroleum accounts for one-third of public sector revenue and 40% of export earnings in 2002. Ecuador’s constitution grants subsurface resources as the property of the state, which means the government owns all the untapped oil reserves. This differs from the United States, where subsurface resources belong to the owner of the property, and allowed for many industrial giants.
Even today, their petroleum industry expands. The two major oil pipelines in Ecuador are the Sistema Oleducto Trans-Ecuatoriano (SOTE) and the Oleducto de Crudos Pesados (OCP). The three hundred ten miles of pipeline making up the Sistema Oleducto Trans-Ecuatoriano can transport more than four hundred thousand barrels per day and the shorter, three hundred mile Oleducto de Crudos Pesados can move around four hundred fifty thousand barrels per day.
|fanesca- ec shrimp & soupy|
The agricultural industry of Ecuador is the second largest industry after petroleum. In addition to flowers, this industry produces and exports fresh tropical fruits, processed coffee and coffee beans, various wood products, chemicals, textiles, Cocoa, and metals. Canned fish has become more prevalent recently.
Ecuador is a gold mine for metal production and various mining industries. Ecuador had extensive and poorly established gold resources and other minerals. Ecuador mining industry produces cadmium, copper, gold, lead, silver, zinc, cement, bentonite, common clay, kaolin, feldspar, crude gypsum, silica (glass sand), ferruginous sand, stone, sand and gravel (limestone, marble, pozzolan, pumice), salt, and sulfur. Gold mining resulted more than nine and half percent increase of gold production in 2003 when compared to 2002 (2,750 kilograms of gold in 2002 and 3,020 kilograms of gold in 2003). This impressive increase in precious metals improved economic conditions and was facilitated by the mining industry.
The forest industry of Ecuador produces many wood products which is accomplished by the large dense forests of Ecuador. Their tropical forests contain more than 2,200 identified species of trees which can be refined for various production needs. The government again shows its control of resources by owning exclusive rights to more than half of the country’s forests. The Ecuadorian government owned forests accounts for 26,086,000 acres (10,557,000 hectares), or 38.1% of the total mainland area. The visible hand of the government, according to Adam Smith, is preventing industrial growth and progress. In 1999 deforestation by Ecuador’s forestry industry was 1.2 percent.
Ecuador has many other industries including a prevalent media business. Machinery, specifically printing machinery, is a growing service in Ecuador’s media industry. The use and access to internet has helped Ecuador’s industry and the internet country code is “.ec” unlike “.us” in the USA. The USA also controls the limited use of “.gov” and “.mil” (reserved for the US government and military respectively). The Research and Development Industry is heavily influenced by the government but still is a profitable and growing industry in Ecuador. In 2002, high technology exports were valued at thirty-four million dollars and shows a promising manufacturing future. Currently, their high technology industry has seen an increase in demand and as a result their manufacturing industry has improved.
Ecuador attracts lots of international tourists for many reasons. Certain mountains draw many hikers and outdoor enthusiasts. Beach buffs will enjoy the beautiful sandy beaches found in Ecuador. Examples of these beaches include Salinas, a big beach city about 1and a half hours outside of Guayaquil and is referred to as Ecuador’s Miami. The city of Montanita, is home to the beach known as the surfer’s beach because of its great waves and rocky terrain. The terrain is perfect for beach enthusiasts looking for a unique beach experience. Atacames/Esmeraldas: Two beaches that are well known as family get away beaches and attracts international vacationers and beach dwellers. Casablanca is a profitable tourist attraction for the “posh” to enjoy an exclusive and pricey vacation. Casablanca is full of big condos, hotels, and apartments for tourist to reside.
In addition to the beaches of Ecuador, another advantage to their tourist industry is the deliciousness and freshness of their local cuisine, which varies by region (coastal and mountainous). On the coast, the booming seafood industry in addition to favorable climates create delicious South American meals. Popular plates take advantage of the near-by coast line as well as the developed vegetation. Ecuadorian meals are usually more ‘soupy’ than other South American dishes. Popular Ecuadorian cuisine includes Conchas Asadas, Ceviche de Camaron, Guatita, Patacone, Bolon De verde (‘Bolon’ is a slang term that means large ball), and Cazuela De pescado. Ecuador’s mountainous cuisine includes Hornado, Cuy, Fritada, Llapingachos, Humitas, and Mecocha.
In addition, Ecuador’s tourism industry includes many hotspots for travelers. These ‘must-see’ spots include the Historical Colonial Quito, the Papallacta thermal baths, the Otavalo Indigenous Market, Midad del Mundo, the Galapagos Islands, and the Amazon River.
Ecuador hosts many international companies such as Roche. In Ecuador, ‘Quito’ means ‘Pharma.’ In January of 1994, the company decided to change their name and ‘Ecuaroche’ was simplified to just Roche. The company is a research-focused healthcare company that develops and provides innovative diagnostic and therapeutic products which deliver significant benefits to patients and professionals in the healthcare industry. American companies such as Ford Motors and Kimberly Clark have manufacturing plants in Ecuador as well. The temperate climate provides a comforting source for expatriates of these businesses.
In conclusion, Ecuador’s industry is composed of two primary businesses- petroleum and agriculture. In addition to these volatile international industries, Ecuador also has important industries that include forestry, mining, research and development, and high technology manufacturing.
Smith, Adam “The Wealth of Nations”