Ecuador’s Economy: Oil and Agriculture, Overdependence Essay -- Ecuado

Ecuadors Economy Oil and Agriculture, OverdependenceOne of the main features of Ecuador s frugality is its dependence on only a few key exporting commodities, most in-chief(postnominal)ly crude and bananas. Oil accounts for approximately 40% of the export economy, composition bananas are responsible for about 17%, and Ecuador is the hugest producer of bananas in the world. The rest of the economy is mostly based on less important agricultural exports, such as shrimp and flowers, which account for 6% and 4% of exports respectively. Ecuador is almost completely reliant on the success of these few industries, peculiarly oil, and so has suffered through a cycle of boom and bust economies over the past several decades, since oil was discovered in the 1970s. Furthermore, in the give out six years Ecuador has had four different presidents, and the national office has been glowering by scandals and corruption. This environment has made it very difficult for the government to achi eve the reforms that are necessary to stabilize the nation when the economy faces a unspoilt downturn. There are two main factors that have been very pregnant in determining the health of Ecuador s economy at whatever given time, and those are oil prices and extreme weather events. Ecuadors study agricultural exports are, of course, very susceptible to damage from harmful weather while the oil industry, until quite recently, has been dependent on only one major pipeline for transport, the Sistema Oleoducto Trans-Ecuatoriano (SOTE). In 1987 a large earthquake rocked Ecuador, destroying a large stretch of the SOTE pipeline, which, when combined with a decline in world oil prices, nearly resulted in a complete collapse of the economy. Another desolate weather event, which also... ...gale, Marcelo, and Lopez-Caliz, Jose (ed.), Ecuador An Economic and Social Agenda in the New Millennium, (The human Bank Washington DC, 2003). Ecuador Country Analysis Brief, Energy Information Adm inistration, http//www.eia.doe.gov/emeu/cabs/ecuador.html, contest we d on 18 November 2004. Ecuador Business Economic Over fightw & History, Ecuador Explorer, http//www.ecuadorexplorer.com/html/business_in_ecuador.html, vie we d on 18 November 2004. Ecuador, InfoPlease, http//www.infoplease.com/ipa/A0107479, vie we d on 8 declination 2004. Foreign Trade, Ecuador Exports, http//www.ecuadorexports.com/foreign.htm, vie we d on 8 December 2004. Ecuador Country Case Study Impacts and Responses to the 1997-98 El Nio Event, lay down for the Study of Society and Environment, http//www.esig.ucar.edu/un/ecuador.html, vie we d on 2 November 2004.