ECUADOR HANDBOOK

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79-00891A000700010001-5
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 43
• Document Creation Date: December 9, 2016
• Document Release Date: April 2, 2001
• Sequence Number: 1
• Publication Date: October 1, 1970
• Content Type: REPORT

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Secret
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auador
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anuDoo
Secret
N2 107
No. 0562
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WAR ING
This document contains information affecting the national
defense of the United States within the meaning of Title
18, sections 793 and 794, of the US Code, as amended.
Its transmission or revelation of its contents to or re-
ceipt by an unauthorized person is prohibited by law.
(Exthdo4 eTo-orrmik
eiavrn,pr n,,,ng and
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TABLE OF CONTENTS
INTRODUCTION
I. GEOGRAPHY
Page
Location 1
Area 1
Climate 1
Topography 1
Natural resources 1
Human resources 2
II. ECONOMIC BACKGROUND
Growth rates and trends 1
Main sectors of the economy 1
Transportation and telecommunications 3
Government economic policy and financial system 4
Foreign trade and balance of 'payments 5
III. POLITICAL SITUATION AND TRENDS
Historical background 1
Structure and functioning of governmental system 1
Political dynamics 2
Security system 3
IV. SUBVERSION
V. LEADING PERSONALITIES
Chief of state 1
Ecuadorean cabinet 1
Other prominent politicians 1
Influential military leaders 2
Journalist 3
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VI. ARMED FORCES
Organization and manpower 1
Logistics 1
Defense agreements 1
Training 2
VII. FOREIGN RELATIONS
VIII. US INTERESTS
IX. CHRONOLOGY AND TABULAR DATA
MAP
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INTRODUCTION
Ecuador is neither geographically nor economically an important factor
in Western Hemisphere security, nor is it influential in Latin American
councils. The country has no significant subversion or terrorism problem
that immediately threatens its neighbors.
The freely elected government of President Jose Velasco came to power
on 1 September 1968. This is the 77-year-old Velasco's fifth attempt to
govern Ecuador; on three previous occasions he has been ousted. With the
support of military leaders, Velasco assumed dictatorial powers on 22 June
1970 in the face of a persistent financial crisis and continuing student
disorders. Congress was closed, the universities shut down, and the 1967
constitution replaced by a modified version of the one adopted in 1946.
Velasco pledged to leave office when his term of office expires in August
1972.
Ecuador is one of the poorest and least developed countries in Latin
America. The country remains basically an agrarian society with agriculture
employing about 55 percent of the labor force and accounting for about one
third of the gross domestic product. Bananas, coffee, and cocoa provide 85
percent of Ecuador's exports. The newly discovered petroleum fields in
northeastern Ecuador are expected to begin producing in 1973 and should
more than meet domestic needs and be a source of foreign exchange. The
sucre was devaluated to 25 to the US dollar in mid-August 1970 in an
,attempt to balance current account payments.
About 43 percent of the estimated population of 6,092,000 persons is
illiterate, and it is estimated that as little as .50 percent of the population
participates in the money economy.
The Ecuadorean armed forces total about 16,580 men and are un-
trained for sustained combat. Military equipment is generally in fair con-
dition, but obsolete and not standardized. The military continues to be the
only element in Ecuador with the capacity for making direct political
changes. Other forces, particularly labor, students, and business and com-
mercial groups have a capability only to erode military support for the
government.
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I. GEOGRAPHY
Location
Ecuador is situated on the equator on the northwestern coast of South
America between Colombia and Peru and includes the Galapagos Islands 600
miles to the west. The Pacific coastline extends 640 miles and Ecuador
claims territorial jurisdiction and fishing rights out to 200 nautical miles
from its seacoast.
Area
Including the Galapagos Islands, the country has an area of approxi-
mately 106,000 square miles. It is slightly larger than the state of Colorado,
and in South America is the third smallest of the independent countries after
Uruguay and Guyana.
Climate
The climate of Ecuador is as diversified as its topography. Temperatures
are warm to hot on the coastal and interior lowlands, moderate on the lower
slopes of the Andes and on the intermontane basins, and cold at the higher
elevations. Quito, at an elevation of 9,246 feet, has an average temperature
in the sixties throughout the year. In general, Ecuador is cloudy and humid,
with moderate to heavy amounts of precipitation except in some nearly arid
coastal areas. Mean monthly precipitation reaches a high of seven inches in
Quito in April and a low in July of less than one inch.
Topography
The mainland consists of three distinct topographic regions: a tropical
lowland in the east, an irregular belt of plains and hills along the coast in the
west, and separating these two areas, a broad band of north-south trending
highlands containing volcano-studded mountain, ranges that rise to about
13,000 feet in the south and to over 18,000 feet in the north. The ranges
enclose a series of elevated intermontane basins. The Galapagos Islands are
made up of several large and many small, generally arid, volcanic islands and
islets.
Natural resources
Ecuador has only a small amount of arable land, most of it in two
agriculturally rich areas. The more fertile but less effectively used zone is
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along the Pacific coast. In its central provinces of Los Rios and Guayas,
where rainfall is adequate, virtually every type of tropical product can thrive.
The other agricultural area is the highlands, where temperate crops and some
high-altitude tropical crops are grown.
Small quantities of gold, silver, and petroleum are produced. The
discovery of new petroleum deposits in the northeast corner of the country
in 1967 and their exploitation by a US consortium promise to make Ecuador
an exporter of petroleum in the 1970s. An undetermined amount of copper
reserves has been found in southern Ecuador and the government is eager for
commercial exploration to begin.
Forestry is relatively undeveloped. There are vast timber reserves, but
these are located primarily in largely unexplored tropical rain forests in the
eastern lowland and northern coastal area, where access is difficult.
Abundant off-shore fish resources, mainly tuna and shrimp, support a
fast growing industry that is already overtaking some traditional tropical
crops as a foreign exchange earner.
Human resources
The estimated population in July 1970 was 6,092,000 with an annual
growth rate of about 3.2%. The infant mortality rate is estimated at 99 per
1,000, and life expectancy is estimated at E5 years for men and 58 for
women. Ethnically, about 41% of the population is mestizo, 39% Indian,
10% white, 5% black, and 5% oriental and other. The great majority of the
Indians live in the highlands, the whites and mestizos in the provincial
capitals and Quito, and almost all of the blacks, mulattoes, and Asians are
found on the coast. There has been a marked migration from rural areas,
principally to the provinces of Guayas and Pichincha, where the cities of
Guayaquil and Quito are located. The labor force is estimated at two million;
about 12% is organized. About 68% of the population is estimated to be
literate. Spanish is the official language, but there is a large Quechua-
speaking Indian linguistic minority.
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BACKGROUND
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II. ECONOMIC BACKGROUND
Growth rates and trends
Per capita GDP for Ecuador was US $410 (purchasing power parity
estimate) in 1969. GDP increased at an average annual rate of 4.5% during
1961-68 compared with 5.0% in 1951-60. Giver the rapid growth of popula-
tion, the per capita growth of GDP has averaged only about 1.0% per year in
the 1960s.
The main economic problem since 1967 remains the chaotic state of
public finances. The budget deficit grew from $44 million in 1968 to an
estimated $55 million in 1969, or 25% of expenditures.
Until suspended in June 1970, when President Velasco assumed dicta-
torial power, congress continued to approve sizable increases in government
expenditures but refused to raise taxes. Moreover, President Velasco has, for
political expediency, granted unbudgeted pay increases to the armed forces
and national police. The severity of the financial pinch in late 1969 caused
salaries for soldiers, policemen, teachers, and cr:her public employees to fall
two to three months in arrears.
The government tried unsuccessfully to peddle bonds in European
capital markets in 1969 to help finance its deficit. At year's end the
government had resorted to record-level borrowing from the Central Bank. If
no corrective measures are taken to offset the monetary effects of this
increase in credit, Ecuador faces serious balance of payments pressures that
will result in a significant decline in foreign exchange reserves. A comprehen-
sive exchange reform was decreed on 6 August 1970 that established the par
value of the sucre at 25 per US dollar.
Only about one third of the labor force participates in the money
economy. For these, a minimum wage of US $27 a month was established by
law in October 1968. The government, however, has made little progress in
redistributing income. Despite some reforms, the tax structure remains
highly regressive. Educational, health, and other public welfare expenditures
are relatively small, and the social security system covers only a small
fraction of the labor force.
Main sectors of the economy
Agriculture and fishing continue to dominate the Ecuadorean economy.
They account for about one third of the GDP, nine tenths of export
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earnings, and about one fourth of government revenues; they employ some
55% of the labor force. Only about 11% of the total land area is cultivated;
the ruggedness of the terrain and the high costs Df clearing forests, construct-
ing roads, and building irrigation facilities remain formidable barriers to
agricultural development. Output has increased slowly since the late 1950s
with average annual increases somewhat below the growth of population.
The coastal plains and hills contain 60% of the cropland and grow most of
the export crops?bananas, rice, cocoa, coffee, and sugarcane. Cropland in
the Andean highland area is devoted principally to domestic food crops?
corn, wheat, barley, beans, potatoes, and cassava. The typical farm is five
hectares or smaller, adequate at best for subsistence agriculture. Farms of
more than 100 hectares make up only 2% of the number of farm units but
they occupy 60% of the farm land. Although bananas are the principal
export, Ecuador has become a marginal supplier in the world market because
of its remoteness from the main markets, poor production and marketing
techniques, and a late start in changing over to the new Cavendish variety.
Because of these factors, Ecuador is the first country to have suffered from
reduced export demand for bananas. These disadvantages, however, are
offset by relative freedom from the Panama disease and hurricanes which
periodically devastate competitive areas. After a decline in this value of
banana exports to $93 million in 1969, there was some improvement in early
1970.
Ecuador's other two major agricultural exports?coffee, and cocoa?
both suffered declines in 1969 in part due to poor crops.
The country has a small but growing fishing industry. Foreign exchange
earnings from exports of fish products, mainly tuna and shrimp to the US,
rose from $5 million in 1966 to $9.6 million in 1969, overtaking sugar in
importance as an export product.
Manufacturing is the second most important sector, producing about
17% of GDP. It has been one of the fastest growing sectors of the economy
since 1961. Food processing, beverages, and textiles are the most important
activities.
Ecuador's newly discovered petroleum resources should not only satisfy
domestic demand but should enabe the counlry to export about 150,000
barrels per day by the beginning of 1973. Petrpleum exports would relieve
balance of payments strains, ease chronic budget problems, and help finance
new public investment.
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In 1968 the mining of metals and minerals accounted for only about
2% of GDP. Output of metals consists of small amounts of gold, silver,
copper, lead, and zinc. Clay, ocher, salt, construction materials, and sulfur
are the only non-metallic minerals produced.
The development of electric power has lagged because of the small size
of Ecuador's industrial sector. Per capita production of 130 kw. hr. in 1967
was the second lowest in South America.
Transportation and telecommunications
The transportation and telecommunications system are minimal and
generally of low quality. What facilities exist are almost exclusively in the
western half of the country.
Highways are by far the most important medium of transport, despite
the general inferiority of the 11,910-mile network. The network pattern
consists essentially of the Pan American Highway, which runs 703 miles
from the northern to the southern border, and a number of east-west roads
from Pacific ports to various centers in the interior.
The state-owned railroad-710 miles of narrow gage, single track?is
badly managed and in poor condition.
Almost all foreign trade leaves Ecuador by ocean shipping. The
Ecuadorean-flag merchant fleet, however, carries only about 6-8% of the
volume. The all-diesel-powered fleet comprises six cargo ships and two
tankers. There are 13 ports, one principal, one secondary, and 11 minor.
Exporting from Guayaquil, which far exceeds that of all other ports, totals
over one million tons a year and consists of bananas, rice, sugar, coffee,
cocoa, balsa, and Panama hats.
A well-developed civil air route has developed to cross the rugged
terrain between the coastal areas and the population centers of the moun-
tains. Ecuador is linked to most of the major cities of the Americas by
regularly scheduled flights both of foreign air carriers and its own two
international airlines. Maintenance at civilian air'ields is inadequate, although
military airfields are generally in good to excellent condition.
The domestic telecommunication system does not provide adequate
service to the government, commercial activities, or the public, and many
private firms have had to develop their own systems. Although the open wire
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system is much more extensive, the growing radio-relay system is assuming
increased importance as the primary means of intercity telecommunications.
Most of Ecuador's international service was furnished by the All American
Cable and Radio Corporation (AACR), a subsidiary of International Tele-
phone and Telegraph. In early 1970, the government nationalized AACR.
Nearly all broadcast stations are commercially operated. In 1968 there were
about 200 AM stations, 30 FM, and 8 TV stations licensed to operate with
an estimated 650,000 radio receivers and 55,00C television receivers.
Government economic policy and financial system
The Ecuadorean Government exercises a moderate degree of influence
over the economy through public enterprises and various types of controls.
In 1970 there were over 1,000 autonomous and decentralized agencies.
Under the dictatorial powers assumed by President Velasco on 22 June
1970, the government took over direct control of these agencies in a
sweeping effort to modernize the inefficient fiscal structure. Prior to this the
central government retained only one third of the public sector revenues,
and the major part of public sector spending was. done by these agencies. The
intervention of these agencies, new foreign exchange controls, tighter control
of monetary policy, and nationalization of sugar exports to the preferential
US market are but some of the moves that demonstrate the government's
determination to play a more active unifying roe in the economic life of the
country. It remains to be seen if implementation of these reforms will be
effective.
Economic policy since the early 1950s has been directed toward the
rapid development of the coastal area through public investments in infra-
structure, notably highways and port facilities. The rapid growth of banana
exports during the 1950s and continuing to the mid-1960s raised public
sector revenues and provided the financial means to increase government
expenditures.
At the same time, public policy has placed major reliance on the
expansion of private activity for economic development. Government action
has been more direct and effective in stimulating both foreign and private
investment in manufacturing than in agriculture.
The banking system of Ecuador consists Df the Central Bank, private
commercial banks (including mortage banks and branches of foreign banks),
and several specialized banking and credit institutions. Among the spe-
cialized institutions are the government-owned National Financial Corpora-
tion, the privately owned Ecuadorean Development Finance Company
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(C0F1 EC), the National Development Bank, and the Ecuadorean Housing
Bank. Ecuador's financial system is rounded out by a group of savings banks,
a large number of credit cooperatives, private finance companies, social
security funds, and a number of licensed insurance companies.
Although the banking system appears on the surface to be adequate,
the development of the economy nevertheless has been impaired by a lack of
a well-developed capital market. Short-term credit is readily available for
established firms from commercia! banks. The development of institutions
for medium- and long-term investment financing, however, has lagged behind
the needs of the economy, although some improvement has been made.
Foreign trade and balance of payments
In 1969 Ecuador experienced a continuation af the balance of pay-
ments difficulties that arose in 1968. Exports in 1969 were estimated at 10%
less than in 1968, with all three major commodities?bananas, cacao, and
coffee?suffering declines. Because imports declined only marginally, prin-
cipally because of inflationary pressures, Ec:uador ended 1969 with an
estimated trade deficit of nearly $40 million. During the first five months of
1970, exports picked up over 20% from the same period in 1969. The
prospect of increasing competition from Cen-:ral American bananas, how-
ever, is likely to keep Ecuador's exports below the 1968 level until at least
1973. By then, the projected initiation of petroleum exports would sub-
stantially boost total exports and probably result in a favorable trade
balance.
As Ecuador has faced increasingly stiff competition in selling bananas in
its traditional markets, the government has turned toward European Com-
munist countries. Ecuador's exports of bananas and other tropical products
to the Soviet Union, Bulgaria, East Germany, Hungary, and Romania have
been far greater than its imports from these countries. The result has been a
steadily growing credit balance that reached $9.7 million in mid-1969. Since
then, however, imports from Communist ccuntries appear to have ac-
celerated.
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III. POLITICAL SITUATION AND TRENDS
Historical background
Ecuador became independent in 1822 and for eight years joined its two
northern neighbors, Colombia and Venezuela, in the Confederation of Gran
Colombia. Independence brought few changes in the economic and social
structure imposed by Spain, however, and Ecuador continued to be ruled by
a small white minority. Political turmoil has narked Ecuador's republican
period, with regional and personal rivalries, rather than issues, providing
diversity within the ruling elite. The greatest sirgle force in politics has been
the succession of strong leaders, or caudillos, and political movements have
proliferated around their personalities. The armed forces have frequently
been used in the competition for political power. Due in part to this
historical background, Ecuador has failed to develop apolitical and fully
professional armed forces, to build proper regerd for legality and constitu-
tionalism, or to establish strong political institutions.
Structure and functioning of governmental system
Most constitutions have provided for a cemralized unitary state under a
presidential system with separate executive, legislative, and judicial branches.
The struggle for dominance between the executive and legislative branches
has been a major factor in Ecuador's history of chronic instability. The latest
constitution (the 17th) of 1967 was set aside as unworkable in June 1970
when President Velasco assumed dictatorial powers. Velasco has ruled since
under a modified version of the 1946 constitution, and new laws have been
issued by decree. The government is currently operating without a congress.
Executive?The President has the power to direct international relations
and diplomatic negotiations, appoint or dismiss ministers, governors, and
diplomatic representatives, approve and promulgate laws and decrees passed
by Congress, and convoke extraordinary sessions of Congress. He also has the
right to proclaim a state of siege in part of or throughout the country with
the prior approval of Congress if it is in session. The constitution provides
that in case of death or disability, the President is succeeded by the Vice
President, with the President of Congress and the President of the Chamber
of Deputies next in line. All three of these positions, however, appear to
have been abolished until Velasco's term of office legally ends in 1972.
Leadership of Ecuador's 1,000 or so autonomous agencies is selected
jointly by the President and Congress. No stable civil service has developed.
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Legislative?The Congress, unTil closed by President Velasco in June
1970, was composed of a Senate and a Chamber of Deputies. The Senate
consisted of two senators from each province and one from the Galapagos
Islands, elected by direct popular vote. In addijon, 15 senators represented
various functional sectors, including the armed 'orces. Deputies were elected
by each province in proportion to population, one for every 80,000 people.
Congress met in ordinary session twice a year for 60-day periods (6
March to 4 May; 10 August to 9 October). In practice most important laws
were originated as presidential decrees and later approved or ignored by
subsequent sessions of Congress. The legislature was limited to budgetary
questions.
Judicial?The Supreme Court exercises a supervisory role over the entire
judicial system. Members of the Supreme Court were elected by Congress for
6-year terms. Since June 1970, President Velasco has appointed judges to the
Supreme Court. At the lower levels of the judiciary bribery is routine, and at
higher levels political influence is keenly felt. Nevertheless, the legal pro-
fession is highly respected, and the opinions cf the higher court judges in
most cases carry much weight.
Local government?Ecuador is administratively divided into provinces,
cantons, and parishes, each headed by a presidential appointee. Municipal
councils, especially in provincial capitals, have been relatively strong institu-
tions, and their semiautonomous status has been a major factor in orderly
government on the local level.
Political dynamics
Political activity remains the preserve of an educated elite of roughly
10% of the population. Within this political arena, the most important single
factor has been the cult of the leaders' personalities. Most parties were
formed for the express purpose of furthering ihe political ambitions of a
particular leader. This has led to a multiplicity of parties but a scarcity of
programs for furthering popular aspirations. Regional rivalry between the
coastal and highland areas continues to restrain the development of na-
tionally organized parties.
The most striking example of the leader personality during the past 35
years is the present president, Jose Maria Velzsco I barra, elected in June
1968 for the fifth time, although he has finished only one of his four
previous terms. Velasco's charismatic appeal has been able to cut across
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social, economic, party, and class distinction,
Political parties?The only non-Communist political parties in Ecuador
not consistently and directly linked to the political ambitions of one man are
the two traditional parties, the Conservative arid the Radical Liberal. Both
were founded in the 19th Century and tend to represent the highlands and
the coastal areas respectively.
Electoral system?The President and Vice President are elected every
four years by popular, direct, and secret ballot on the first Sunday in June,
and neither may succeed himself in office unless he resigns eight months
prior to election. Senators and deputies are elected by direct popular vote
for terms of four and two years respectively. All literate Ecuadoreans who
are at least 19 years old may vote, with the exception of military officers on
active duty.
Ecuador's principal political problem remains the lack of a broad
electorate with enough sophisticatIon to want and to recognize rational
political leadership dedicated to improving the material well-being of all
Ecuadoreans. Although the size of the electorate is growing, the country
remains under the control of a white, elite oligarchy with well over half of
the population functionally disenfranchised by cultural and economic bar-
riers.
Security system
The police have been generally effective in urban areas and capable of
identifying and locating developing insurgent elements and their activities
there. The rural police, however, because of lack of manpower and weak
intelligence operations, could not control guerrilla activities should any
appear.
President Velasco's determination to maintain law and order has pro-
vided the police with the authority needed to accomplish their mission. The
President has also not hesitated to back up the police with military elements
when needed. Plans are under way to expand the police force, which in late
1969 numbered approximately 6,000 men, by an additional 2,100 men by
the end of 1970. The police force is receiving assistance from the US Agency
for International Development.
The General Directorate of Security (DGS) is a national investigative
organization. It has responsibility for political and criminal investigation and
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reporting and has powers of arrest, search, and seizure. It has an authorized
personnel strength of about 200. It has been used, however, by succeeding
administrations for low-level political patronage payoffs.
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IV. SUBVERSION
Political instability has been fostered by social, political, and economic
differences and long-standing rivalries and jealousies between those who
reside on the coast and those in the capital city of Quito. Economic
problems, based on the failure of Ecuador's many governments to deal with
widespread poverty, illiteracy, and primitive living conditions, add to the
instability. Segments of the largely mestizo middle class, dissatisfied with the
slow pace of economic development and the inability to secure employment
commensurate with their education and ambitions, are attracted by the
"rapid solutions through revolution" espoused by some political extremists.
There are numerous leftist subversive groups, but they are small,
divided, and lack the leadership that would give them either a substantial
poli tical influence or the capability to overthrow the government by force.
These include the two major Communist parties?the soft-line Communist
Party of Ecuador (PCE), which follows Moscow's direction, and the smaller
hard-line Communist Party of Ecuador Marxist/Leninist (PCE/ML), which
favors a violent overthrow of the government. There are also the small
Revolutionary Socialist Party of Ecuador (PSRE), which tends to favor a
Cuban-style revolution, the small Socialist Party of Ecuador (PSE), and the
Movement of the Revolutionary Left (MIR). Although technically illegal,
these parties have been allowed relative freedom of operation since the
departure of the military junta in 1966.
The Communists have had some success in penetrating such target
groups as organized labor and student movements. The Communists have
been able to capture the leadership of such organizations as the Confedera-
tion of Ecuadorean Workers (CTE), the Federation of Ecuadorean University
Students (FEUE), and the Federation of Ecuadorean Secondary Students
(FESE), but they have usually been unsuccessful in involving these organiza-
tions in situations that lack broad popular support.
In spite of the freedom of subversive groups to operate relatively freely
since 1966, the armed forces have assured President Velasco that the sub-
versive threat will not be allowed to get out of hand. Security forces monitor
the activities of most extremist groups and have supported the President in
periods of crisis.
Subversion leading to the overthrow of the regime has been a historic
part of Ecuadorean political life. Most political leaders are forced by cir-
cumstances to give at least some consideration to subversion as a method for
Ecuador Oct 70
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achieving political office. In the process, non-Communist politicians often
have found it convenient to form alliances with extremist elements and
professional revolutionaries.
Ecuador
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LEADING
PERSONALITIES
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V. LEADING PERSONALITIES
Chief of state
Jose Maria Velasco lbarra: Velasco is well into his fifth term as
President of Ecuador. Three of his previous efforts to govern the country
were cut short by coups d'etat. The 77-year-old Velasco epitomizes the Latin
American phenomenon of personalismo, or gaining power by personal
appeal, rather than by ideology or the machinations of party politics. For
the Ecuadoreans, Velasco
25X6 does not have the support of the powerful oligarchy. During his
titth-'resident Velasco has enjoyed the support of military leaders.
Nov'
Ecuadorean cabinet
Minister of Agriculture & Livestock: Vincente Burneo Burneo
Minister of Education: Augusto Solorzano Constantine
Minister of Finance: Jaime Aspiazu Seminario
Minister of Foreign Affairs: Jose Maria Ponce Yepez
Minister of Government: Hector Espinel Chiriboga
Minister of Industries & Commerce: Simon Bustamante Cardenas
Minister of Labor & Social Welfare: Luis Robles Plaza
Minister of National Defense: Jorge Acosta Velasco
Minister of Public Health: Francisco Parra Gil
Minister of Public Works & Communication!;: Juvenal Saenz Gil
Secretary General of Government: Francisco Diaz Garaycoa
Other prominent politicians
Camilo Ponce Enriquez: Ex-President Ponce (1956-1960) is a respected
conservative, who uses the Social Christian Party as his political vehicle. He is
Ecuador Oct 70
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actively seeking support for another try at the presidency in the June 1972
elections.
Otto Arosemena Gomez: Ex-President Arosemena (1966-1968) is an-
other conservative politician, whose ambitions provide the sole reason for
existence of the small Democratic Institutionalist Coalition Party. Although
he represents well-established economic interests, Arosemena has used liber-
ality toward labor and anti-US posturing to broaden his political popularity.
Carlos Julio Arosemena: Ex-President Arosemena (1961-1963), who
both entered and left office as a result of a coup, is currently a senator from
the coastal province of Guayas and leader of the National Revolutionary
Party. Arosemena's political rhetoric reflects a mixture of Communist ideas
and popular causes calculated to appeal to workers and students and to stir
up social turmoil.
Assad Bucaram: Mayor of Guayaquil from 1967 to 1970 and head of
the Concentration of Popular Forces, Bucaram has the ability to appeal to
discontented elements on the coast, to articulate their aspirations, and to
provide honest municipal administration. He won the election for prefect of
Guayas Province handily in the June 1970 elections and has already an-
nounced his candidacy for the 1972 presidential election.
Influential military leaders
Army Colonel Luis Alberto Jaconne Chavez: Until suddenly removed
from his position in February 1970, Colonel Jacome had military control
over Guayaquil, the country's largest population center. He reportedly heads
a clique of army officers that supports President Velasco and apparently has
considerable influence over many senior army officers.
General Julio Maria Sacoto Montero: Appointed commander of the
army two days after President Velasco assumed dictatorial powers on 22
June 1970, he is a knowledgeable, experienced infantry officer and is
considered politically astute.
Colonel Bolivar N. Narvaez Bustos, Chief of Army Logistics
Lieutenant Colonel Bolivar Guerrero Celi, Mechanized Group Com-
mander
Lieutenant Colonel Felipe Santiago Alban Alfaro, Commander of 1st
Paratrooper Battalion
Ecuador
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Lieutenant Colonel Luis Tamayo Rosero, Commanding Officer 1st
Infantry Battalion
General Cesar Rohon Sandoval: Air Force commander, he is a brash
"activist" who might over-react in a crisis.
Rear Admiral JorgecCruz Polanco: Navy commander until late Septem-
ber 1970 when he was appointed chief of the armed forces general staff.
Journalist
Julio Prado: Prado, who was foreign minister under Otto Arosemena, is
an articulate spokesman of the center right. His column in El Tiempo is
indicative of current sentiment in that sector.
Ecuador
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VI. ARMED FORCES
Organization and manpower
The armed forces of Ecuador consist of an army of 12,325 men, a navy
of 1,600 men and 6 patrol ships, arid an air force of 1,655 men and 23 jet
aircraft.
The missions of the armed forces are to maintain internal security,
defend the nation from aggression, and support civic action projects. The
armed forces are capable of maintaining intenal security in urban areas.
They are not capable of defending against external attack, waging aggressive
war, or combating guerrillas on a large scale.
There are no paramilitary forces capable of making a substantial con-
tribution to the ground combat strength of the army. The National Civil
Police, numbering slightly over 6,000, is subordinate to the Minister of
Government. The police receive training and equipment from the US.
In 1969, the military budget amounted to '' .4% of GNP and about 10%
of the national budget.
Logistics
The armed forces have a heterogeneous collection of European and US
equipment in fair condition, considering its considerable age. Weapons are
well maintained. Vehicular maintenance varies from excellent to poor.
Vehicles are too few in number and too widely dispersed to contribute
significantly to the mobility of infantry units.
Defense agreements
Ecuador is a member of the Inter-American Defense Board and a
signatory of the Rio Pact, which provides for collective support of American
countries threatened by aggression. In fulfillment of these obligations,
Ecuador has entered into a bilateral military agreement with the US, under
which it receives US military assistance. Israel has a military assistance team
resident in Ecuador, advising on agrarian training within the military estab-
lishment.
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Training
The armed forces lack the training for sustained combat. Numerous
Ecuadorean military personnel have attended service schools in the US Army
and Navy line officers are products of their respective service academies,
where academic standards are generally high. Air Force officers are often
graduates of the Army Academy, the Naval Academy, or the universities and
then attend flying school. Only one out of 10 conscripts has completed the
third grade because of limited educational facilities. Selected officers have
been trained in the US and the Panama Canal Zone, as well as in Brazil,
Venezuela, Chile, Argentina, Spain, and West Germany.
Ecuador
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FOREIGN
RELATIONS
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VII. FOREIGN RELATIONS
The foreign policy of Ecuador has centered historically on boundary
problems arising from the lack of clearly defined frontiers. The country's
major preoccupation has been with Peru, largely because of Ecuador's
frustrated longing to realize its colonial claims to a portion of the upper
Amazon Basin.
Efforts to find a diplomatic solution foundered on Ecuador's unrealistic
demand for jungle territory that it had never actually controlled and on
Peru's unwillingness to yield anything it had occupied. In July 1941, Peru
invaded El Oro Province on the Gulf of Guayaquil. Aware that its own
armed forces were no match for the numerically superior Peruvian land and
air forces, Ecuador, in order to secure the withdrawal of Peruvian forces
from occupied provinces and to avert further encroachments, reluctantly
accepted a settlement?the Rio Protocol?at Rio de Janeiro on 29 January
1942, to be guaranteed by Argentina, Brazil, Chile, and the US. Although
the Rio Protocol looked to the dravving of a specific boundary. Ecuador has
sought to keep its basic claim open. The yearly anniversary of the protocol
has become a prime occasion for demonstrations, often Communist-
exploited.
The most intractable problem with the US results from Ecuador's
efforts to claim and enforce a 200-mile limit in its territorial waters.
Ecuador, like Peru and Chile, which have imposed similar limits, considers
these waters a valuable source of revenue for it fishing industry and wants
to ensure that this resource is not exploited by other maritime nations. As a
result, sizable numbers of foreign fishing vessels?mostly from the US?are
seized and fined each year, usually leading to protests by the US.
Ecuadoreans believe that the US policy of reimbursing US fishermen for
fines paid to Ecuador for these violations only ercourages further flouting of
the law. A quadripartite fishing conference involving Ecuador, Peru, Chile,
and the US was held in Buenos Aires in August 1969, but no agreement was
reached.
President Velasco's government has moved to establish closer diplo-
matic relations with several Eastern European coJntries, including the Soviet
Union. The government is apparently motivated by its search for export
markets and the President's desire to demonstrate its "independence" of the
US. During 1969 the Velasco government re-established or re-activated
diplomatic relations with the USSR, Poland, Czechoslovakia, Rumania, and
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Yugoslavia. Consular relations with Bulgaria were established in July 1969,
and diplomatic relations with Hungary were formalized in January 1970. In
most cases, ambassadors have not yet been exchanged, and the Polish and
Rumanian ambassadors in Caracas are accredited in Quito. All these coun-
tries already have or, like East Germany, plan soon to open trade missions or
consulates in Quito.
Ecuador
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4.1? INTEREY
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VIII. US INTERESTS
Private US investment in Ecuador was Ebout $60 million in 1968.
Subsequent figures are not available, but in the interim the International
Telephone and Telegraph Company subsidiary has been nationalized and
compensation is still being negotiated. In addition, US banana companies
and firms such as W. R. Grace have begun to withdraw. These reductions will
be more than offset by the investment of US oil companies in their holdings
in eastern Ecuador. The Texaco-Gulf consortium, the only enterprise past
the exploratory stage, will have invested about S225 million in equipment, a
300-mile pipeline, and other costs by the time its wells are projected to go
into production in 1972.
The US provides about one third of Ec:uadorean imports, but the
proportion is falling steadily. Japan, Canada, and Western Europe are all
improving their position in the Ecuadorean market, and this is being
matched by increased share of investment.
Between 1946 and 1969, the US provided Ecuador $259 million in
economic aid, $170 million in loans and $89 million in grants. In the same
period, military assistance amounted to $32 million. In fiscal 1969, Ecuador
received $13 million in economic aid and $2.6 million in military aid.
US military commitments to Ecuador are those covered by the general
inter-American agreements, including the Rio de Janeiro Pact of 1947, the
Inter-American Treaty of reciprocal military assistance. The several agree-
ments covering military advisers to the Ecuadorean armed forces are now
under revision, and the number of such advisers as well as the military aid is
expected to decline considerably in the near future.
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TABLES
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SECRET
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IX. CHRONOLOGY AND TABULAR DATA
Chronology of Key Events
1941 (July-August) Ecuador suffers humiliating military defeat by
Peru in border war.
1942 (29 January) Protocol signed at Rio de Janeiro defining the
disputed borders with Peru and providing for their definitive
demarcation under the guarantee of Chile, Argentina, Brazil,
and the United States.
1944 (May) Coup returns Jose Maria Velasco I barra to power.
1946 (December) New constitution promulgated.
1947 (August) Velasco ousted by military coup.
(September) Carlos Julio Arosemena declared interim presi-
dent by Congress.
1948 (June) Gab o Plaza Lasso, candidate of an ad hoc political
coalition, elected president in one of the rare fair national
elections in the nation's history.
1952 (June) Velasco lbarra, candidate of the National Velasquista
Movement, elected president; first transfer of power by an
elected president to an elected successor in over three
decades.
1955 (September) Ecuador appeals to OAS for protection against
Peru; investigation reveals that charges of impending invasion
were without merit.
1956 (June) Camilo Ponce Enriquez elected president; the first
Conservative to be elected to the office in 60 years.
1960 (June) Velasco I barra elected president for fourth time.
(September) Velasco declares Rio Protocol null and void on
grounds it was imposed on Ecuador by force.
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(December) The four guarantor powers of the Rio Protocol
rule that Ecuador cannot unilaterally renounce a valid inter-
national instrument, serious anti-US demonstrations break
out in Ecuador to protest declaration.
1961 (November) Velasco ousted by popular and military action;
replaced by leftist vice-president Carlos Julio Arosemena (son
of previous president with same name).
1962 (April) On insistence of the military, Arosemena severs rela-
tions with Czechoslovakia, Poland, and Cuba.
1963 (July) Arosemena lenient toward Com-
munists?ousted by armea rorces; miutary junta takes power.
1966 (30 March) Junta resigns following widespread agitation by
politicians, students and vested business interests; Clemente
Yerovi I ndaburu named interim president.
(15 October) Direct popular elections held for 79-man con-
stituent assembly.
(16 November) Otto Arosemena Gomez elected interim con-
stitutional president by constituent assembly.
1967 New constitution adopted: Arosemena term extended to 1
September 1968; national elections scheduled.
1968 (2 June) Jose Maria Velasco lbarra elected in close three way
presidential race. Bicameral legislature also elected: nearly
equally divided among Velasquistas, center-left coalition, and
center-right coalition.
(10 August) New congress convenes with working agreement
between Velasquistas and center-leftists providing a majority
cooperative with incoming president.
(1 September) Jose Maria Velasco lbarra becomes president
for fifth time in final phase of full return to constitutional
government.
1970 (22 June) President Velasco assumed extra-constitutional
power in the face of a continuing financial crisis and student
disorders. Congress closed and a modified version of the 1946
constitution re-imposed.
Ecuador
I X - 2 Oct 70
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29 January
1 May
24 July
10 August
9 October
LAND
TABULAR DATA
Holidays and Significant Dates
Rio Protocol Day
Labor Day
Birthday of Simon Bolivar
Quito Independence Day, traditional opening
of congress
Guayaquil Independence Day
Selected Factual Data
106,000 sq. mi., including Galapagos Islands; 11% cultivated; 8%
meadows and pastures; 55% forested; 26% waste urban, or other (1961)
Limits of territorial waters: 200 n. mi.
PEOPLE
Population: 6,092,000 (excluding nomadic Indian tribes); males 15-49,
1,381,000; 880,000 fit for military service; averEge number reaching military
age (20) annually 57,000
Ethnic divisions: 41% mestizo, 39% Indian, 10% white, 5% Negro, 5%
oriental and other
Religion: 95% Roman Catholic (majority nonpracticing), trace of
Evangelical
Language: Spanish, Quechua
Literacy: 57%
Labor force: 2 million, of which 55% agriculture, 16% manufacturing,
4% construction, 7% trade, 9% services, 9% other; shortage of skilled labor
Organized labor: 12% of labor force
GOVERNMENT
Legal name: Republic of Ecuador
Capital: Quito
Political subdivisions: 19 provinces and one territory (Galapagos
Islands)
Type: unitary republic
Legal system: based on civil law system; modified 1946 constitution
replaced 1967 constitution in June 1970; legal education at four state and
Ecuador
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two private universities; has not accepted compulsory ICJ jurisdiction
Branches: President and bicameral legislature elected in June 1968,
under 1967 constitution; legislature closed to lowing assumption of dicta-
torial power by Velasco on 22 June 1970; judic ary
Government leader: President Jose Maria Velasco
Suffrage: all literate over age 18; compulsory
Elections: next presidential, June 1972
Political parties and leaders: National Velasquista Front, Jose Maria
Velasco; Radical Liberal Party, Adolfo and Francisco Huerta, Jorge Zavala;
Social Christian Party, Camilo Ponce; Conservative Party, Manuel Jijon-
Camaano and Gab o Pico Mantilla; Concentration of Popular Forces, Assad
Bucaram; National Revolutionary Party, Carlos .Julio Arosemena
Voting strength: in June 1968 national elections, Velasquistas, a cen-
ter-left coalition, and a rightist coalition each got approximately one-third
Communists: 500 in three parties plus 400 in pro-Castro Revolutionary
Socialist Party, 400 youth, 3,000 sympathizers
Member of: U.N. (ECOSOC, IAEA), OAS, IADB, LAFTA and Andean
Sub-Regional Group (formed in May 1969 within LAFTA)
ECONOMY
GNP: $1.4 billion (est. 1968), $260 per capita; 88% consumption, 12%
gross investment (est. 1968); 1968 real growth rate, 4% (est.)
Agriculture: main crops ? sugarcane, beans, coffee, cotton, corn,
bananas, cocoa, rice; nearly self-sufficient; caloric intake, 2,100 calories per
day per capita (1964)
Major industries: food processing, textiles, cement, leather and rubber
products, drugs, fishing
Electric power: 220,000 kw. capacity (1968 est.); 690 million kw.-hr.
produced (1967); 130 kw.-hr. per capita (1967)
Exports: $224 million (f.o.b., 1968, est.); bananas, coffee, cocoa
Imports: $235 million (f.o.b., 1968, est.); agricultural and industrial
machinery, petroleum products, chemical products, transportation and com-
munication equipment
Trade: Exports to Eastern Europe and USSR amounted to $24.1
million or about 11% of total exports in 1968, but decreased in value in
1969 to $14.2 million; imports from n the Communist countries amounted to
$9.8 million in 1969
Aid: Economic?extensions from U.S. (FY46-69), $169.9 million loans,
$89.4 grants; from international organizations (FY46-68), $130.3 million;
from Communist countries (1954-68), $10 million loans
Military?assistance from U.S. (FY49-69), 52.0 million
Ecuador
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Monetary conversion rate: 25 sucres=US$1 (August 1970)
Fiscal year: calendar year
COMMUNICATIONS
Railroads: 710 mi.; 615 mi. 3'6" gage, 95 mi. 2'51/2" gage; all single
track; government owned (1965)
Highways: 11,910 mi.; 1,120 mi. paved, 3,490 mi. gravel, 2,780 mi.
improved earth, 4,520 mi. unimproved earth
Inland waterways: 960 mi.
Pipelines: crude oil, 27 mi.; refined products, 50 mi.
Ports: 1 principal (Guayaquil), 1 secondary, 11 minor
Merchant marine: 8 ships (1,000 GRT or over) totaling 40,000 GRT,
45,600 DWT; includes 6 cargo, 2 tanker
Civil air: 13 major transport aircraft
Airfields: 180 total, 163 usable; 11 with permanent-surface runways; 4
with runways 8,000-11,999 ft.; 18 with runways 4,000-7999 ft.; 3 seaplane
stations
Telecommunications: expanding radio relay system, facilities adequate
only in Quito and Guayaquil; 80,000 telephones; 660,000 radio and 55,000
TV receivers, 230 AM, 30 FM, and 8 TV stations; 4 old telegraph submarine
cables
DEFENSE FORCES
Personnel: army 12,325, navy 2,600 (including 250 marines), air force
1,655 (101 pilots)
Major ground units: 6 divisions, 4 separate battalions
Ships: 2 patrol escorts (plus 1 inactive), 4 other patrol ships and craft, 3
amphibious warfare ships (plus 1 inactive), 3 auxiliaries, 10 service craft
Aircraft: 70 (23 jet) in air force, 1 (prop) in navy
Supply: dependent primarily on U.S.; some supplies from Western
Europe
Military budget: for fiscal year ending 31 December 1969,
$22,222,000; about 9.9% of national budget
Ecuador
IX - 5 Oct 70
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National Intelligence Survey (NIS) Material
87/GS
General Survey
9/68
87/22
Coasts & Landing Beaches
6/54
87/23
Weather & Climate
5/56
87/23S
Meteorological Orgn.
& Facilities
6/68
87/24
Topography
6/65
87/25
Urban Areas
5/60
87/31
Railroads
1/62
87/32
Highways
4/64
87/33
Inland Waterways
4/56
87/36
Merchant Marine
1/58
87/38
Telecommunications
3/68
87/41
Population
9/68
87/44
Manpower
7/64
87/45
Health & Sanitation
2/68
87/56
Intelligence & Security
4/63
87/57
Subversion & Insurgency
5/70
87/61
Agriculture, Fisheries,
& Forestry
6/63
87/63
Minerals & Metals
11/62
87/64
Manufacturing & Constr.
3/64
87/65
Trade & Finance
8/63
87/GZ
Gazetteer
5/57
MAP
The best available general reference map s: Mapa Especial Carreteras
Principales del Ecuador; 1:1,000,000; 1966.
Ecuador
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92
I 9
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ECUADOR
International boundary
Provincia boundary
0 National capital
Ambato Provincia or territorio capital
i Railroad
Road
Airfield
Principal port
Talara
Populated places
@ Over 200,000
o 10,000 to 65,000
? Under 10,000
Spot elevations in feet
Scale 1:2,500,000
20 40 60 80 190
Statute Miles
0 20 40 60 80 100
Kilometers
58054 9-68
BOUNDARY REPRESENTATION IS
NOT NECESSARILY AUTHORITATIVE
76
Approved For Release 2001/07/16 : CIA-RDP79-00891A000700010001-5
GALAPAGOS
ISLANDS 0
POPULATION
Baquerizo
jNorene62
cS
Galapagos Islands not shown in true
longitudinal posItion; the islands in
600 nautical miles directly west of
mainland Ecuador.
GALAPAGOS
ISLANDS 0
Persons per square mile
O 10 20 50 I.50 300 5/0
1111
O 4 8 /9 58 116 /97
Persons per square kilometer
MIEE're
ECONOMIC ACTIVITY
Baquerizo
.Moreno
AGRICULTURE INDUSTRY
Bananas Rice -1 Textile
Cocoa Sugarcane A. Panama hat
Coffee Corn Petroleum refining
Small grains ilk Fish processing
I Flour
MINING ID Cement
Petroleum c Pharmaceutical
Gold and silver V Sugar refining
fl Powerplant
FISHING
S Shrimp T Tuna
GALAPAGOS
ISLANDS 0
o
VEGETATION
Baqueri.o
JAoreno
11111 Rain forest
1
Deciduous forest
Mountain forest
Dry forest
Inter-Andean
agricultural land
Paramo
= Desert
.11 Swamp and marsh
Approved For Release 2001/07/16 : CIA-RDP79-00891A000700010001-5
Secret
Secret
Approved For Release 2001/07/16 : CIA-RDP79-00891A000700010001-5