The plunge in the price of oil is forcing major changes for the president of Ecuador, Rafael Correa.
After eight years of state spending that was made possible by the commodity boom, the country is being forced to tighten its belt, and Correa is seeking more foreign direct investment. "This is a very difficult year because of the fall in oil prices," Correa said in an interview with CNBC.
But with an unfriendly business environment, Correa may find it hard to entice the private sector to pick up the slack.
Government spending is now 40 percent of GDP, up from less than 20 percent when Correa first came to office in 2007, according to the Heritage Foundation. Even when oil prices were high, the country borrowed money to finance spending. Ecuador's debt-to-GDP ratio rose from 15 percent in 2009 to an estimated 33 percent for 2015 — a number still considered low. Ecuador's economy grew faster than those of most of its Latin American peers during those years.