Wedged between Colombia and Peru on South America's northern Pacific coast, Ecuador is geographically divided into three areas by two Andean cordilleras that run from north to south: the coastal lowlands; the highlands between the two mountain ranges; and the Amazon Basin to the east.
Ecuador's 1992 population stood at 11.1 million and is fairly evenly distributed between the coastal and mountain highland regions, with only about 2 percent living in the Amazon Basin. Over the past five years, the population grew at an average annual rate of 2.8 percent. The increasing urbanization is concentrated in the two major cities of Quito and Guayaquil, which together are home to about 26 percent of the total population. 1 Indians account for about 37 percent of the population, and Ecuador is considered to have the strongest Indian movement in South America. An example of the strength of the movement is the US$100,000 environmental tax that has been imposed by the government on oil companies that signed contracts during the recent seventh round of international bidding in the Oriente region. 2
In 1993, Ecuador's GDP grew by 2.3 percent. This is down sharply from the 3.5 percent growth seen in 1992. Inflation, however, fell to 42 percent in 1993 from 54.6 percent in 1992. The government has managed to lower inflation by normalizing relations with the country's external commercial bank creditor and implementing a tight monetary policy. 3
External debt totalled US$12.3 billion in 1992, down from US$12.5 billion in 1991. Ecuador's merchandise trade account remained in surplus at US$730 million in 1993, continuing the trend over the past several years. Over 89 percent of 1992 export earnings came from sales of oil and foodstuffs, including bananas, shrimp, cocoa, fish products, and coffee. The country has, however, experienced current account deficits each year since the late 1980s.