Boom and Bust
After World War II, Ecuador’s economy enjoyed resurgence as the demand for its agricultural commodities increased. The return of prosperity brought about more than a decade of political peace. From 1948 to 1960, three presidents – Galo Plaza Lasso, Velasco Ibarra, and Camilo Ponce Enriquez – were democratically elected and completed their terms.
In 1959 the banana boom came to an end and discontent surfaced in Ecuadorian politics again. Within a year. the effects of the discontent were exploited by the keen populist Velasco, who was elected by his widest margin of victory ever over Camilo Ponce Enríquez, whose administration had the misfortune of governing when the country entered its latest economic decline.
Juntas and Political Instability
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The rich get richer.
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The 1960’s commenced with a new economic depression, which in turn initiated a new political crisis, including several military interventions in the political arena. Despite Velasco’s rhetoric, his fourth term as president only deepened the economic crisis he promised to resolve. By 1961, Velasco had lost all public support and was forced into exile by a Junta led by his vice-president, Carlos Julio Arosemena Monroy.
In early 1963, Arosemena fell victim to the same military leaders that helped him secure the presidency from Velasco. The return of political chaos ended conjecture that Ecuador’s political system had developed into a sustainable democracy.
The Military Junta that deposed Arosemena governed until Ecuador’s flagging economy and wide spread protest sparked by their fiscal policy, forced them to step down. The day after the Junta vacated the Government, Clemente Yerovi Indaburu, a banana grower and former minister of economy, became provisional president of the troubled state. In October, following the passage of a new constitution, Otto Arosemena Gómez, a cousin of Carlos Julio, was elected as the second provisional president. After 20 months of provisional rule Ecuador held popular elections for president. Incredibly, the now seventy-five years old Velasco won his fifth term.
Weakness characterized Velasco’s final term as president. After enduring months of criticism from Congress, his cabinet and even his vice-president, on June 22, 1970, Velasco dismissed Congress and the Supreme Court and assumed dictatorial powers and subsequently ordered several extremely unpopular economic measures.
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Government party following one of the nation’s many power changes.
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Velasco had remained in power despite his weakness because of the support of the military; his nephew, General Jorge Acosta Velasco, was minister of defense. However, after Acosta was sent to Madrid as ambassador following a failed attempt to oust the commandant of the Quito military, Velasco was left to the mercy of the high command who quickly overthrew him before he completed his last term in 1972.
The 1970s again brought economic prosperity to Ecuador. The nationalist military regime that seized power in 1972 used Ecuador’s new oil wealth and foreign borrowing to pay for a program of industrialization and land reform. Despite its success and early promises that it would be a long-term rather than interim government, the Junta that usurped Velasco resigned in 1976 and a new military Junta was formed with the objective of bringing Ecuador back to democracy.
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