Archaeological explorations indicate that the coastal regions of present-day Ecuador supported corn-cultivating communities as early as 4500 BC . In the first few centuries AD , the population was divided into dozens of small isolated tribes. By AD 1000, the highland groups had formed a loose federation, the Kingdom of Quito, but they were absorbed into the Inca Empire in the late 15th century. Atahualpa, son of the conquering Inca Huayna Capac and a Quito princess, later became emperor, but by then the Spanish forces under Francisco Pizarro were gaining a foothold on the coast.
Pizarro's pilot, Bartolomé Ruiz, the first European to see the Ecuadorian coast, arrived in 1526 on a scouting expedition. The actual conquest reached Ecuador in 1531. Except for a few emeralds, from which their first landing place took its name (the city and province of Esmeraldas), the Spanish found those shores valuable only as a stopping place on their way to the riches of the Incas in Peru. Sebastian de Belacázar, a lieutenant of Pizarro, extended Spanish dominion northward from Peru after the conquest of the Incas. He found the northern capital of the Inca Empire left in ashes by the retreating Amerindians, and on that site in 1534, he founded the city of San Francisco de Quito, later to become the capital of the republic.
The Spanish governed the region as the Audiencia of Quito, part of the Viceroyalty of Peru. Quito, in the cool highlands, was soon steeped in culture and rich in ornately decorated churches and monasteries. Guayaquil, the principal seaport, grew slowly because of its unhealthy tropical climate, and would not become a major city until much later. The Spanish colonial period was a time of ruthless exploitation of the Amerindians and bickering and bloodshed among the Spanish in the struggle for power and riches.
The early stirrings of Ecuadorian independence were spread, in part, through the writings of the 18th-century satirist Francisco Javier Eugenio de Santa Cruz y Espejo. Abortive revolts against Spanish rule came in 1809 and in 1811. The decisive struggle began on 9 October 1820, with the proclamation of an independent Guayaquil. Finally, on 24 May 1822, with the Battle of Pinchincha, the Spanish were defeated. This victory unified the liberation movements of the continent. Simón Bolívar and José de San Martín met in Guayaquil in 1822 to consider the future of newly freed areas. Liberated Ecuador became part of Bolívar's dream, the Republic of Gran Colombia, consisting of modern Ecuador, Colombia, Venezuela, and Panama. In 1830, when this union collapsed, the traditional name Quito was dropped in favor of La República del Ecuador, "The Republic of the Equator."
The Republic's first president was Juan José Flores, one of Bolívar's aides. The 15-year period of Flores's domination was noted for iron-handed conservative rule. In 1832, he occupied the Galápagos Islands in a comic-opera invasion witnessed only by the giant tortoises native to the islands. Then, from 1845–60, Ecuador went through 11 presidents and juntas. The nation was split between pro-clerical Conservatives and the more secular Liberals, and regional strongmen vied for power.
From 1860 to 1875, Ecuador was ruled by the fervently religious Conservative Gabriel García Moreno, Ecuador's first great statesman. He sought peace and consolidation for his torn country through a rigid, theocratic government. His administration granted special privileges to the Roman Catholic Church, even dedicating the Republic to "The Sacred Heart of Jesus" by act of congress in 1873. Beyond his religious zeal, García Moreno was also known for developing roads and public education, beginning the Guayaquil-Quito railway, and putting Ecuador on a firm financial footing. However, his relentless conservatism caused bitter strife, culminating in the dictator's assassination in 1875. In the ensuing period of confusion, the Conservatives were not able to carry on the program of García, nor could the opposition take command until the emergence of Gen. Eloy Alfaro, who ushered in the Radical Liberal era with the revolution of 1895. He and the succeeding Liberal presidents were able to counteract much of García's program. Church and state were carefully separated, and liberty of thought, worship, and the press was established. The Guayaquil-Quito railway was completed, uniting the coast and the highlands commercially.
The Liberal era continued until 1944, with numerous interludes of violence and crisis. The economy rose and fell with world prices on such commodities as cocoa. Territory was lost to Brazil in 1904, Colombia in 1916, and finally Peru in 1942. The border dispute with Peru, originating in the colonial period, came to a climax when Peru invaded Ecuador's southern and Oriente (Amazon Basin) provinces. The Rio de Janeiro Protocol awarded to Peru the greater part of the Amazon Basin territory claimed by Ecuador
In 1944 José María Velasco Ibarra came to power as a nationalist denouncing the Rio agreement. Velasco, who had served as president during 1934–35, ruled for three years until he was sent into exile. After three ineffective presidents in less than one year, Galo Plaza Lasso (1948–52) was elected to the presidency. Plaza, later chief of the OAS, ruled for four years. In 1952, Velasco Ibarra returned to office for four years, and was again elected in 1960. In his inaugural address, Velasco formally renounced the Treaty of 1942, and embarked on an economic program of "growth through inflation."
By 1961, with Ecuadorian currency in a slump and consumers heavily taxed, the air force revolted and sent Velasco into exile, thus ending Ecuador's unprecedented streak of elected governments. Vice President Carlos Julio Arosemena Monroy assumed the presidency on 7 November 1961. Arosemena lasted less than two years, and in July 1963, he was arrested by the military for "drunkenness" (a charge that could have been substantiated throughout his presidency) and sent into exile.
A four-man military junta headed by Capt. Ramón Castro Jijón took over and ruled until March 1966. Elections were scheduled and held in October 1966 for a constitutional assembly. Otto Arosemena Gómez, cousin of Arosemena Monroy, became provisional president. In 1968, new elections were held for the presidency, won yet again by Velasco. On 22 June 1970, following a fiscal crisis, Velasco suspended the 1967 constitution and assumed dictatorial power. He dissolved Congress, reorganized the Supreme Court, and proceeded to rule by executive decree.
In June 1971, Velasco promised new presidential and congressional elections, which were scheduled for the following June. However, on 15 February 1972, Velasco was overthrown in a bloodless coup after he refused demands by senior army officers to postpone the elections. On the following day, Gen. Guillermo Rodríguez Lara was installed as head of a new military government. Velasco, deported to Panama, was granted asylum by Venezuela.
The regime of General Rodríguez lasted for four years, and then he was ousted on 12 January 1976. A three-member Supreme Council assumed power, promising a return to civilian government within two years. Presidential elections took place in July 1978, but because none of the candidates received the required majority, a runoff election was held in April 1979. The winner was Jaime Roldós Aguilera, a populist running under the banner of the Concentration of Popular Forces. Christian Democrat Osvaldo Hurtado was made vice president. Both were inaugurated on 10 August 1979, the day Ecuador's current constitution went into effect. Roldós was killed in a plane crash on 24 May 1981, whereupon Hurtado became president until 1984.
Hurtado's term was marked by modest gains in the economy, but by 1984, a flagging economy, caused in part by widespread flooding, led to calls for change. The 1984 election was won by León Febres Cordero Rivadeneira, a conservative Social Christian who advocated a free-enterprise economic policy. Febres formed a coalition government and pressed his platform of reducing state intervention in the economy and making it more responsive to market forces.
Just as it appeared that Febres's fiscal policies were about to bring widespread benefits to the populace, Ecuador was dealt two staggering blows: the 1986 plunge in world oil prices cut revenues by 30%, and a devastating earthquake in March 1987 cut off oil exports for four months and caused more than $1 billion in damage. The government had already suspended repayment of the $11 billion foreign debt in January 1987, but after the earthquake repayment was further postponed. Febres's fortunes took a turn for the worse with the decline in oil prices. His coalition partners were defeated in elections held on 1 June 1986, and the leftist parties opposed to him gained control of parliament.
In presidential elections held 31 January 1988, Rodrigo Borja Cevallos of the Democratic Left (ID) Party and Abdalá Bucaram Ortiz of the Roldista Party (honoring ex-president Jaime Roldós) won the most votes in a field of 10 candidates. Borja won the runoff election, and took office along with a strong contingent in congress. The government made improvements in Ecuador's human rights record, and reached an accord with the terrorist group Alfaro Vive, Carajo (literally, "Alfaro [Eloy] lives, damn it!"), however, economic troubles, particularly inflation, continued, and the ID lost half its congressional seats in midterm elections in 1990. In 1992, voters elected a conservative government, headed by President Sixto Durán-Ballén of the Republican Unity Party (PUR) and Vice President Alberto Dahik of the Conservative Party (CP). Durán-Ballén imposed severe economic measures to try to improve Ecuador's situation. These measures proved economically successful, but socially unpopular. Support for Durán-Ballén began to decline.
However, on 26 January 1995, the longstanding border dispute with Peru sprang to life once again when Ecuadorian troops attacked a Peruvian post. A full-fledged war began, which lasted until March 1, causing some 80 casualties and leaving 200 wounded. Although the war created further economic difficulties for Ecuador, it also stirred national pride, and Durán-Ballén's popularity rose on the tide of fervent patriotism. By the fall of 1995, however, Durán-Ballén had once again fallen from favor due to charges of political corruption against himself and Vice President Alberto Dahik. Dahik fled the country, and Durán-Ballén served the remainder of his presidential term with little support.
In July 1996, Abdalá Bucaram was elected president of Ecuador. A showy and eccentric populist, Bucaram quickly alienated most of the political establishment. Under Bucaram, US ambassador Leslie Alexander told Ecuadorians the country was gaining a reputation for pervasive corruption. Bucaram had come to describe himself as "El Loco," or the madman, and citizens began to believe that he was indeed crazy. By February 1997, they had had enough. More than 2 million Ecuadorians marched, calling for his ouster during a one-day strike. On February 6, Congress declared Bucaram mentally incompetent, charged him with corruption and ousted him from office. During the presidential crisis, Bucaram at first refused to leave office, and sought refuge in Guayaquil. Vice President Rosalia Arteaga and Fabian Alarcon, leader of Congress, claimed the presidency. Bucaram finally fled to Panama, while Arteaga agreed to briefly become president until Congress could establish right of succession. Alarcon emerged as interim president, and held office until the next presidential election in 1998. Bucaram was accused of absconding with $100 million to $300 million in public funds during his brief presidency. This sum was a significant one for a country in deep financial crisis. Through most of the 1990s, Ecuador suffered double-digit inflation as high as 50% to 60% a year. By 1999, the economy had contracted by 7.5%, and only one in three Ecuadorians had a full-time job. By 2000, over 62% of Ecuadorians lived in poverty, some with virtually nothing to their names.
Many of the country's Pacific Coast communities were battered by El Niño storms during early 1998, causing millions of dollars in damage. In this atmosphere of economic uncertainty, presidential elections were held in May 1998, with Harvard-educated Jamil Mahuad facing Alvaro Noboa, a banana tycoon and reputedly the richest man in the country. With promises for political stability and economic recovery, Mahuad prevailed at the polls and took office in July 1998. The next month, extensive constitutional reforms approved by a National Constituent Assembly took effect. Reforms gave unprecedented new rights to the country's indigenous peoples, who had become more vocal about their rights during the 1990s.
In 1996, the leaders of 11 indigenous groups joined with women, ecologists, and human rights workers to found the Pachakutik ("change" or "revolution" in Quichua) political movement. Under this new political umbrella, native peoples urged massive social changes, and won several seats in Congress by 2000. In the meantime, Mahuad was unable to bring the economy under control and was making political enemies. In May 1999, Mahuad and Peruvian president Alberto Fujimori formally ended their border dispute. Ecuador gained a small sliver of land, and navigation rights on some Peruvian rivers. The peace accord was seen as a defeat within Ecuador, where the military resented its loss of power and resources and was embarrassed by territorial concessions to Perú. By late 1999, native peoples had grown disenchanted with Mahuad. Amerindian leaders accused him of lacking sympathy for native peoples' economic problems. Mahuad also had overseen a $1.2 billion bailout of 18 corrupt banks. The financial scandal only widened after a jailed banker claimed he had given $3.1 million to Mahuad's presidential campaign.
In January 2000, Mahuad announced plans to replace the sucre, the national currency, with the US dollar. Mahuad wanted to stabilize the economy and end chronic inflation, but native peoples grew angry at the plan because they believed they would lose their savings. The sucre had been pegged at about 8,000 per dollar only a year earlier, but now stood at 25,000 per dollar. On 21 January, thousands of native peoples marched to Quito to protest "dollarization" of the economy and called for Mahuad's ouster. With the aid of the military, they occupied the empty Congress building and Supreme Court. Mahuad fled the government palace. Gen. Carlos Mendoza took power and declared that a three-man junta would lead the country. The junta was composed of Antonio Vargas, leader of the Confederation of Indigenous Nationalities of Ecuador, Carlos Solorzano, a former Supreme Court justice, and Col. Lucio Gutierrez. The junta only lasted a few hours. Under intense international pressure, including US threats to end economic aid, Mendoza dissolved the junta. Congress named the 62-year-old vice president, Gustavo Noboa Bejarano, as president of the country despite protests by Mahuad. Noboa, a respected former rector and law-school dean at the Catholic University, said he would not abandon plans to "dollarize" the economy. By giving up its currency, Ecuador turned its monetary policy to the US Federal Reserve. Noboa's government attempted to assure Ecuadorians that the new currency will stabilize the nation. With a "Get to Know the Dollar" campaign, the government converted all sucres in circulation, about $450 million, before the end of 2000.
In the October 2002 presidential elections, newcomer Lucio Gutiérrez ended first with slightly over 20% of the vote in a field of 11 presidential candidates. He went on to win the runoff election with 58.7%, easily defeating Alvaro Noboa, the candidate favored by the outgoing president. Gutiérrez had entered politics after he led a coup attempt in 2000 to oust president Mahuad. Gutiérrez assembled a loose coalition of smaller parties and indigenous groups and campaigned against established parties. Although he used a populist rhetoric to win the election, after his inauguration he has sought to reassure foreign investors and international lending institutions. He has maintained the economic policies of his predecessors and has softened his criticism of the dollarization initiative. After years of economic stagnation, the economy began to show signs of strong recovery in 2001 and 2002. Yet, more than 70% of the population lived in poverty in 2002.