Can Ecuador Escape Its Cycle of Economic Instability?

Apr 1, 2024 | 15:09 GMT

Ecuador's flag waves behind rows of coins.
Ecuador's flag waves behind rows of coins.

(SEZER OZGER via Getty Images)

While it may help Ecuador avoid a greater crisis in the years ahead, another International Monetary Fund (IMF) program is unlikely to ensure the country's long-term economic and financial stability, as the government will continue to struggle to maintain macroeconomic discipline amid significant political constraints. Ecuador has a long history of political and financial instability. A combination of economic challenges, socio-economic discontent and, at the institutional level, legislative-executive deadlock have prevented successive Ecuadorian governments from pursuing forward-looking economic policies, which, in turn, has contributed to the South American country's recurring financial problems. Since its independence in 1822, Ecuador has defaulted on its debt almost a dozen times. And in just the past 30 years, five Ecuadorian presidents have either been ousted, deposed or impeached, with the most recent being former President Guillermo Lasso (2021-2023), whose term was cut short after he dissolved the National Assembly and triggered early elections. ...

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