Quito, the capital of Ecuador has been the main commander in stabilizing the country’s economy, but always has been in catch 22 situation between preserving its indigenous heritage and marching towards globalization. It’s economy is comparable to topography, rough with a number of ups and downs. Recessions, ouster’s of presidents, political instability have always affected the country’s progress.
Especially in the late 90’s, 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, send the city and the country in a whirlpool with skyrocketing inflation, reducing 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, dollar became the official currency of Ecuador. While 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(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 it own rich cultural Spanish and Inca heritage in the form of its 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 basic foundation is formed from its 40% petroleum exports. But ongoing legal battles like that of ChevronTexaco for contaminating Amazoan rainforest and that between the Ecuadorian government and Occidental Petroleum for forceful take over is affecting the economy.
Although a small part of the World 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 increased interest in the country. But all these economic factors don’t go well down with the Indigenous people who want to preserve their heritage and 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.