Ecuador is a nation rich in culture and blessed with natural beauty. Although it is not very large, it benefits from one of the most diverse and stunning ecosystems in the world. The nation is situated in the northeast of South America on the equator, surrounded by Colombia on the north, the Pacific Ocean to its west and Peru to the south and east. Ecuador is slightly smaller than the state of Nevada with a total landmass of 177,225 square miles including the famous Galapagos Islands. The climate is tropical along the coast and the Amazon jungle and cooler inland within the Andes Mountains.
Its population is about 13,212,742 with a yearly growth of about 1.9%. About 7.5% of the population is illiterate with a high concentration of illiteracy in the areas with indigenous populations. The population consists of about 22% indigenous peoples, 6% blacks, and the rest mixed or white. There is very much a class distinction between the city people and the indigenous people from the rural areas.
More than 60% of the Ecuadorian population is at or below the poverty line. Rural areas have the highest concentration of poor people, but they are also irrefutably present in many of the urban areas of the country. There is a severe lack of infrastructure in these poor communities that leads to a shortage of paved roads, phone service and clean water supply. Education is also a grave issue for the poor as most of them have not completed high school and cannot afford to have their children do so either. There is also an absence of formal services and institutions in these communities, like police. Therefore, there is a high incidence of crime on the streets and domestic violence in homes. The poor operate in informal economies unregulated by the local government and live in lawless communities unprotected by the police. They have been marginalized by the public sector and secluded to areas where even the most basic services are absent.
Ecuador is a nation that is economically dependent on its natural resources. Its major exports are petroleum, bananas, fish, shrimp, coffee and cut flowers. There is a heavy reliance on agriculture that not only leads to the exploitation of many field workers, but also to an unstable economy that is tied to climatic changes. Therefore, the people are extremely vulnerable to droughts, bad crop years, earthquakes, volcanoes and fear of phenomenon like "El Niño" that can dramatically hurt the economy.
Ecuador has endured many years of economic hardship over the past decades. External shocks of the 1980's and 1990's set the stage for an economic ruin and the need for drastic reform. "El Niño" rainfalls in 1975, 1983 and 1998 caused heavy damage to agriculture. An earthquake in 1987 staggered oil production for a year and completely stopped it for a full six months. Droughts periodically affected agriculture and electricity generation throughout the past decades. Having a heavy dependency on other nations has also drastically affected Ecuador. Although at times changes in domestic interest rates induced short-term financial inflows the economy has mostly been hurt by this dependence, especially when the world has faced crisis. Years of instability slowly lead it to the economic crisis in 2000 that removed the Sucre as the countries currency and adopted the dollar, this is known as dollarization.