chapter  7
Ecuador
Pages 34

In contrast to the previous three countries, in Ecuador oil wealth did not help to protect forests. As in Venezuela, almost all the net deforestation was due to pastureland, led by higher demand for cattle products from higher urban incomes and rapid population growth. But the policy package accompanying the oil boom was decisive in turning Ecuador into a deviating case. Mostly led by military governments, Ecuador opted for a strong modernisation strategy focused on new roads and high transport subsidies, partly financed by high foreign borrowing.When in the 1980s oil revenues, interest rates and relative prices turned around and foreign debt had to be serviced at high cost, the presence of roads greatly facilitated further land extensification, providing an asymmetry in the oil wealth-deforestation link.