Galo Plaza Lasso was the son of the former Liberal president Leónidas Plaza, but he also had strong links with the powerful Conservative families in the sierra, and so was well-placed to form a stable government. Committed to democracy, he strove for the freedom of the press and the right of opponents to express their views, and as a fair and popular president, he was the first since 1924 to complete his term of office.

 

As he himself recognized, the stability he had helped foster was owed in large part to a period of economic prosperity brought on by the banana boom . After World War II, the world demand for bananas went through the roof, and while the traditional exporters in the Caribbean and Central America had been having trouble with crop diseases, Ecuador had huge areas of ex-cacao land, ready to be given over to bananas - and in a matter of years, the country had become the world's largest exporter, a position that it retains today. Government reserves brimmed over and money was invested in infrastructure to open up more areas of the countryside to banana farms. Large areas around Santo Domingo, for example were cleared for agriculture and colonists flooded to the coast - between 1942 and 1962, the population in the region rose by over one hundred percent. Importantly, the industry was dominated by small and medium-sized farms, so the new wealth spread through society far more completely than it had done during the cacao boom.

The prosperity and well-being was such that even Velasco managed to complete his third term in office (1952-56), the only one that he did. His successor, Camilo Ponce Enríquez , also saw his term through, but storm clouds were brewing on the economic horizon in the late 1950s as world demand for bananas slumped and export prices fell. Unemployment began to rise and people took to the streets in protest.

Once again, Velasco, the master of populism, was elected to power by a large majority, thanks to his high oratory and promises of support for the urban poor. Exploiting the popularity of the recent Cuban revolution, he laced his speeches with anti-US attacks, and won the support of the Ecuadorian left wing. Before long however, pressure from the US on Latin American countries to cut ties with Cuba, brought tensions between leftists and anti-Communists to a critical level. Hopes that the country had at last achieved political maturity were dashed as Velasco's coalition group disintegrated under the strain, as violence burst out between rival groups; a gun battle even broke out in Congress between anti-Velasco legislators and pro-government spectators, though no-one was hurt. In a desperate search for revenue, Velasco put taxes on consumer items, sparking off strikes across the country.

As crisis loomed and a Cuba-style revolution threatened, the military installed Velasco's vice-president, Carlos Julio Arosemena Monroy , in 1961, but he soon became unpopular with the establishment for refusing to sever links with Cuba, and was branded a Communist. The damage to his credibility had been done by the time he relented in 1962, but by then he was a broken man and had hit the bottle. A year later, a military junta took power, determined to carry out the reforms needed to put the country back on the right track. Although they jailed the opposition and suppressed the left, they did pass the 1964 Agrarian Reform Law , which at last brought the huasipungo system to an end, even if it didn't achieve a far-reaching redistribution of land. As banana prices plummeted in 1965, the junta ran up against serious cash-flow problems and were forced to step down the following year.

Elections in 1968 brought Velasco, now aged seventy-five, back to power by the slenderest of margins. The economic situation was so serious that Velasco, for once, took the unpopular route, devaluing the sucre and raising import tariffs, but to temper these measures, he played to the nationalists by seizing US fishing boats found inside Ecuador's territorial limits, the so-called " tuna war ". After two years, and relying heavily on the help of his nephew in the military, he assumed dictatorial powers (as he had done during two of his other terms) and clung to power until his overthrow by the military in 1972, so closing the final chapter in his epic political career.