Ecuador

FOOTBALL IN ECUADOR Football is, by far, the most popular sport in Ecuador. In its firstWorld Cup appearance, there is hardly any downside. The national team’s players and coach Hernan “Bolillo” Gomez already have the status of national heroes for making second place in the South American qualifying round. Nevertheless, expectations are high and one can safely expect that the country will ground to a halt when the national team plays and massive celebrations are likely to take place even in the event of a draw. Traditionally poor by South American standards, Ecuadorian football has improved significantly during the 1990s. The national team now has with players with international exposure primarily through the Spanish, Scottish and English professional leagues. Its more prominent player, and secret weapon, is Southampton’s striker Agustín Delgado. THE STATE OF THE ECONOMY The stabilization brought about by Dollarization in 1999-2000 and strong private investment linked to the construction of a heavy crude oil pipeline (OCP) has contributed to a strong economic recovery in 2001. In the foreseeable future the OCP project will shape the economic performance of Ecuador as it is expected to generate US$3.0-3.5bn in FDI and to double oil exports over the next three years. The true economic challenge for Ecuador is to have the right set of policies in place to avoid this investment boom ending in a “Dutch Disease” bust. In particular, the financing position of the public sector remains considerably weak and inconsistent with a fixed exchange rate regime. Some loss in external competitiveness is already evident in export performance as well as GSDEEMER, which shows that the real exchange rate 20% overvalued. In this regard, we believe Ecuador would greatly benefit from securing a new IMF agreement in 2002 thatwould let the government close the financing gap for 2002. This may also contribute to a more smooth political transition to a new presidential administration in January 2003. STATE OF NATION Ecuador is a presidential republic composed of 22 provinces. The president and vice-president are elected in one ballot for a four-year term. The legislative branch is composed of a one-chamber Congress (123 Congressman) and the judicial system is based on civil law. Ecuador has a fairly fragmented political system with over ten parties including the Democratic Left, Popular Democracy, Pachakutik and Rodolsist party, just to mention a few. Former Vice-president Gustavo Noboa was selected president following the coup that deposed Jamil Mahuad during the 1999-2000 crisis. Ecuador will hold first and second rounds elections on October 20 and 24 of 2002 to select a new president. THE 2002 WORLD CUP Ecuador arrives at its first World Cup finals after finishing second within the highly competitive South American qualifying group, below Argentina and slightly ahead of Brazil and Paraguay. On paper, the prospects for this small Andeannation tomake it beyond the first round are not very encouraging. Based on FIFA’s official rankings, Ecuador (36) is clearly the underdog of group “G”. Ecuador will face Italy(6), Mexico(7) and Croatia(23) starting on June 3. Previous Appearances No Previous Appearances