Quito, the capital of Ecuador plays an important role in stabilising the country’s economy. In Ecuador, Quito has the highest level of tax collection. Quito's economy depends upon industries like agriculture, textiles, metals. Palm oil, cacao, rice and bananas are grown for export. Headquarters and offices of international and national financial institutions are located in Quito, making it a business city of the country.
In the late '90s, the country went through a massive recession as oil prices fell and foreign debts were hanging like a demon’s sword. In 1998 with the fluctuation in oil prices sent the city and the country in a whirlpool with skyrocketing inflation, reducing the purchasing power of the common man leading to road blockades and strikes. When banks started to close down, the only solution for the then-President Jamil Mahuad was to switch over to the dollar, so that the country could get up and stand up on its own. In 2000, the dollar became the official currency of Ecuador. While the dollar did help in stabilizing the economy, it took away the country’s power of manipulating its own exchange rate and remains dependent on the U.S. Federal Reserve.
Indigenous - Mestizos Clash
The Indigenous community believes that 45% of Ecuadorians are indigenous and whether the percentage is right or wrong, their presence can be felt in Quito as you travel on the streets. While indigenous people are poorer, the Mestizos (a mix of Spanish and indigenous) are rich and dominant in politics. Their organization CONAIE has been instrumental in blending the Indigenous community in mainstream politics and also making their presence felt in various sectors such as hospitality, arts and crafts, business, and politics.
Quito has preserved its rich cultural heritage (Spanish and Inca) in the form of churches and colonial architecture. The city is divided into two parts Old and New. While the Old Quito with its historical inheritance has been the first city to be named as a World Heritage site by UNESCO in 1979, the New Quito is dreaming of new tomorrows with advanced technology in the 21st century.
Ecuador’s economy is based on petroleum exports. But ongoing legal battles like that of ChevronTexaco for contaminating the Amazon rainforest and that between the Ecuadorian government and Occidental Petroleum for forceful takeover is affecting the economy.
Although a small part of the world’s petroleum industry, Ecuador's economy depends upon its oil reserves. Government has major stakes in oil businesses as debts, and public wages are paid through it. With elevated oil prices, oil companies have shown interest in Ecuador. But the Indigenous people want to preserve their heritage and the Amazon rainforest which is deforesting at an alarming rate.
In today’s situation, Ecuador’s main dependency is on Quito and on exports of crops such as coffee, bananas, sugar, cacao, palm oil, and rice. Currently, Quito needs to intermingle its Indigenous people and economic ambitions well so that it becomes an important member of a global economy that too a dependable one.