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History of Ecuador

A coastal-based liberal revolution in 1895 under Eloy Alfaro reduced the power of the clergy and opened the way for capitalist development. The end of the cocoa boom produced renewed political instability and a military coup in 1925. The 1930s and 1940s were marked by populist politicians, such as five-time president Jose Maria Velasco Ibarra. In January 1942, Ecuador signed the Rio Protocol to end a brief war with Peru the year before. Ecuador agreed to a border that conceded to Peru much territory Ecuador previously had claimed in the Amazon basin.

After WWII

Galo Plaza Lasso

After World War II, a recovery in the market for agricultural commodities and the growth of the banana industry helped restore prosperity and political peace. From 1948-60, three presidents--beginning with Galo Plaza --were freely elected and completed their terms.

Recession and popular unrest led to a return to populist politics and domestic military interventions in the 1960s, while with the discovery   of   oil   in  the  1970s  foreign  companies started to develop oil resources in the Ecuadorian Amazon. In 1972, a nationalist  military  regime  overthrew Jose Maria Velasco Ibarra for the last time and used  the  new oil

wealth  and foreign borrowing to pay for a program of industrialization, land reform, and subsidies for urban consumers.

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