Ecuador was traditionally characterised by political instability, but this changed under the government of former president Rafael Correa (2007-17), whose Citizens’ Revolution brought political and financial stability for over ten years, in addition to unprecedented social benefits for large swathes of the population. The ruling AP coalition, which was founded by Correa, has been in government since 2007 but currently has less of a majority than during Correa’s rule. Moreno’s lack of legislative majorities has led him to build ad hoc coalitions with right-wing political parties (which had posed a heightened opposition to the AP during Correa’s government) to pass legislation. Nonetheless, right-wing parties have increasingly distanced themselves from Moreno’s politically sensitive economic policies, even though overall, they agree with the need to improve fiscal management and economic orthodoxy. As the 2021 general election draws closer, the government’s ability to secure support for unpopular austerity measures and reforms will diminish. 

Although Moreno’s personal approach to interest groups and investors is more conciliatory than that of Correa, he will continue to face a range of obstacles, including a broad spectrum of opponents and internal resistance, namely from hard-line AP members. This will not pose a threat to political stability but will make governability much more difficult. Correa’s allies will do everything to blame Moreno for a number of social ills, including the state of the economy, rising crime rates, the management of the COVID-19 pandemic, and for going against his campaign promises. Opposition forces (particularly the Social Christian Party, PSC, and the CREO movement) will aim to increase popular support by undermining Moreno’s reform agenda, capitalising on their increased influence at the local level after the March 2019 local elections, and blaming him for the coronavirus crisis.

There are several structural factors that feed instability and which are likely to persist regardless of the election outcome. A fragmented party system will continue to affect the National Assembly, hindering the passage of reforms (legislative gridlock was a driver of early removals of presidents in the 1990s and early 2000s). Meanwhile, Ecuador’s dependency on oil makes it particularly vulnerable to changes in oil prices. Finally, social movements (mainly indigenous groups) are key power brokers, often able to force the government to backtrack reforms (they also have unseated presidents in the past). However, heightened political fragmentation, institutional changes introduced by Moreno and the potential for social backlash will significantly reduce the likelihood of any radical reforms or sudden regime changes.

In 2019, Correa agreed to USD 10.2bn worth of loans with the International Monetary Fund (IMF) and other multilateral institutions to address the acute fiscal deficit. Moreno has also driven an anti-corruption campaign, leading to several members of Correa’s administration being investigated and/or prosecuted. These efforts come as part of a drive to ensure legal security and attract foreign capital in order to shore up the ailing economy.

Ecuador is considered a Flawed Democracy in the 2020 Democracy Index, developed by The Economist Intelligence Unit (EIU), where the country ranks 67 out of 167 countries scored.

The country ranks 86 at the 2020 Human Development Index developed by the United Nations Development Programme.

Operational disruptions caused by COVID-19, specifically those related to the mobility of workers (such as the restrictions on the circulation of private cars), will pose challenges and delays to businesses operating in Ecuador. Restrictions will also affect suppliers and providers, introducing further potential delays in operations. As local governments continue to play a prominent role in determining restrictions amid the pandemic, businesses are likely to continue to face challenges as restrictions will likely differ according to the jurisdiction.

Public and private labor strike risks are likely to increase in the next months as the government struggles to bring the COVID-19 virus pandemic under control. Union membership is low, however, the Confederation of Indigenous Peoples (Conaie) frequently acts as a catalyst for union activity. Although employees in ‘strategic sectors’ including hydrocarbons, electricity, and telecommunications are not permitted to participate in industrial action, the capacity to enforce this law is limited. The risk of institutional corruption remains very high, despite the administration’s efforts to tackle the issue. The COVID-19 pandemic is also highlighting the extent of corruption and incidences of bribery and overpricing have been particularly common.

On 15 December 2020, the National Assembly approved an anti-corruption bill that created new corruption crimes and introduced new controls on public sector procurement fraud. The bill will improve the integrity risk environment as it will discourage public-private corruption, while also reduce corruption risks in public procurement processes. Enforcement capabilities will remain limited due to an inefficient judicial system, with investigations and sanctions being limited compared to the extent of corruption evidenced. As a result of the bill, businesses will face increased reputational risks due to personnel being exposed to criminal investigations amid the introduction of corruption crimes in the private sector.

Criminals frequently target intra- and inter-city buses, many of which are overcrowded and poorly maintained. Use secured buses, identifiable by a sticker placed on the sides and the windshield of the vehicle; these buses are equipped with surveillance cameras and a GPS system that allows local authorities to respond quickly in the event of a problem. In any case, be vigilant when on buses, on which theft and other more serious crimes are regularly reported. It is advisable to avoid taking buses after sundown, particularly in the regions of Manabí and Guayas. When using taxis, use only licensed companies and avoid hailing taxis off the street. Drive with doors locked and windows rolled up.

Overall, Ecuador ranks 129 out of 190 countries scored at the 2020 Doing Business Index by the World Bank and 92 out of 198 at the 2020 Corruption Perception Index by the Transparency International Organization.

There is a strong organized crime presence in Ecuador. The lack of visa requirements, a dollarized economy, and proximity to the world’s two largest cocaine-producing countries altogether create a favorable environment for organized crime. Ecuador is a drug-trafficking hub. Despite the presence of local and international organized crime groups, including Colombian and Mexican cartels, levels of violence remain relatively limited. Organized crime-related violence is highest in the port of Guayaquil and along the Colombian border. Overall, the city of Guayaquil remains particularly challenging, with rampant common and violent crime, despite increased government efforts. Although crime levels in the area remain lower than before the pandemic (except for homicide), security conditions on the ground will remain difficult for citizens and businesses, who are exposed to street robberies and armed assaults.

The COVID-19-virus outbreak lowered the intensity of protests in Ecuador during 2020, but these are likely to increase, including looting, because of a combination of factors that include the unwillingness to comply with government lockdowns and concerns about the availability of food, inefficiency in the healthcare system, discontent over job losses, and austerity and tax measures imposed to deal with a liquidity crisis, preventing the state from supporting those in need. In the 12-month outlook after the peak in COVID-19 cases, we will see a renewal of politically and economically motivated protests, increasing roadblocks nearby government buildings, which also face vandalism risks, and oil sites.

War risks are likely to remain moderate. Troop deployments are likely to be limited to addressing violent protests and frustrating the activities of illegal armed groups operating along the Colombian border, including the Revolutionary Armed Forces of Colombia (FARC) dissidents. Since early 2018 the government has deployed additional military personnel to the Colombian border following several improvised explosive device attacks against state security forces in Esmeraldas province by FARC dissidents. Relations with Peru remain cordial despite the temporary recall of Peru’s ambassador in protest at the building of a border wall in 2017.

There is an isolated risk of terrorism incidents along the Colombian border. Dissidents of the Fuerzas Armadas Revolucionarias de Colombia (FARC) – considered criminals in Colombia but described as terrorists by the Ecuadorian government – continue to operate in the provinces of Esmeraldas, and to a lesser extent, Sucumbíos. In 2018, the dissident ‘Oliver Sinisterra front’, kidnapped and killed three Ecuadorian journalists in Esmeraldas. The group has also been responsible for several improvised explosive device (IED) attacks against state security forces and an electricity pylon. In response, the Ecuadorian and Colombian governments have increased military co-operation along the border, killing the alleged leader of the group in December 2018.

Overall, Ecuador ranks 90 out of 163 within the 2019 Global Health Security  by the Institute for Economics and Peace.

No vaccinations are required to enter the country.

Ecuador ranks 45 out of 195 within the 2019 Global Health Security Index, a project of the Nuclear Threat Initiative (NTI) and the Johns Hopkins Center for Health Security (JHU), developed with The Economist Intelligence Unit (EIU).

Ecuador's climate is, unsurprisingly, largely equatorial. Along the coast temperatures and humidity levels are high throughout the year. Rain is more abundant in the period between December and April as well as in the north as compared to the south. Days are generally hot and nights cool, with little variation in temperatures from season to season.

Ecuador is vulnerable to several natural disasters due to its location along the Pacific "Ring of Fire," a highly active seismic zone. Some 24 "active" or "potentially active" volcanoes are present in the country, in particular Cotopaxi, Sangay, Tungurahua, and Reventador, all of which erupt relatively often. Always heed instructions issued by local authorities when in the vicinity of volcanoes.

Similarly, earthquakes are common and can cause large-scale damage and transportation disruptions, especially if landslides occur. In April 2016, a powerful earthquake with a magnitude of 7.8 on the Richter scale struck the northwest of the country, killing hundreds of people and leaving major material and infrastructural damages in its wake. More than a year later, the region was still in recovery. Offshore earthquakes also create the risk of tsunamis in coastal regions; in the event of such an earthquake, follow all instructions issued by local authorities (such as evacuation orders).

Flooding can occur year-round but is particularly frequent during the rainy season, which begins in October and lasts until April/May, although this varies slightly by region.

If you plan to visit Ecuador, stay informed by the Servicio Nacional de Gestión de Riesgos y Emergencias.