End of the Oil Boom

Ecuador returned to democracy in 1979 when a combined ticket of Jaime Roldós, presidential candidate of the populist party, and Oswaldo Hurtado, vice presidential candidate and leader of the Christian Democratic Party, won an staggering 68.5 percent of the popular vote. Many doubted whether the military would permit Roldós and Hurtado to assume power, but the margin of victory and pressure from the administration of U.S. President Jimmy Carter made it difficult for the military to stop the democratization process they had initiated.

Roldós' tenure as Ecuador's president was short, he was killed in 1981 in an airplane accident in the southern province of Loja. Hurtado succeeded him and held the Presidency until 1984. Facing a grave external debt and various other financial problems, Hurtado lost the 1984 presidential elections to Leon Febres-Cordero of the Social Christian Party.

Febres Cordero is best known for his introduction of free-market policies during the beginning of his term. As was often the case with economic reforms in Ecuador, Cordero's policies were largely precluded by the collapse of world oil prices in 1986 and an earthquake in March 1987 that destroyed a large stretch of Ecuador's sole oil pipeline.

In 1988 Rodrigo Borja of the Democratic Left (ID) party won the presidency. Throughout Rodrigo's presidency, his government pursued a gradual stabilization policy, that while helped by increasing oil export prices, suffered from extreme inflation, at times reaching more than 50%.

Modernization and Economic Crisis

President Sixto Durán Ballén succeeded Borja in 1992. The Durán Ballén administration took further steps to stabilize and modernize Ecuador's economy. In January 1995, several crises, including the military confrontation with Peru, known as the Cenepa Incident, hurt the nation's economy and delayed further reform. Despite its lack of popularity, the Durán-Ballén Administration can be credited with pushing several unpopular yet important modernization initiatives through Congress, as well as beginning the negotiations that would end in a final settlement of the territorial dispute with Peru.

In 1996, Abdalá Bucaram, from the populist Ecuadorian Roldosista Party, won the presidency on a platform that promised populist economic and social reforms. Almost from the start, Bucaram's administration languished amidst widespread allegations of corruption. Empowered by the Presidents unpopularity with organized labor, business, and professional organizations alike, Congress unseated Bucaram in February 1997 on grounds of mental incompetence. The Congress replaced Bucaram with Interim President Fabián Alarcón.

In May of 1997, following the demonstrations that led to the ousting of Bucaram and appointment of Alarcón, the people of Ecuador called for a National Assembly to reform the Constitution and the country's political structure. After a little more than a year, the National Assembly produced a new Constitution.

Fall of Mahuad and Dolarization

In August 1998, on the same day Ecuador's new Constitution took effect, former Quito Mayor Jamil Mahuad began his presidential term. In January 2000, the wretched state of Ecuador's economy along with plans to cut many government subsidies as well as a plan to dollarize the economy, prompted widespread street protests which culminated in Mahuad being forced from office. Under Mahuad Ecuador's recession-plagued economy shrunk significantly and inflation reached levels of up to 60%.

On January 22, 2000, the Ecuadorian National Congress rejected a break in the constitutional order and ratified the procedure of presidential succession and affirmed Noboa's assumption of the office of the President. Noboa will head the State for the remainder of the period for which Mahuad was elected, though the same Indian leaders that ousted Muhuad have threatened to depose Noboa unless he solves the country's economic problems quickly.