– Post Columbian Period –

 

1534 Conquest of Ecuador

Before the Incas were able to subjugate the region of what is today the state of Ecuador, Sebastián de Belalcázar conquered the area. He was supported by local natives of the Tumi Pampa region. On December 6 of 1534 he and his men founded the city of Quito. Although the conquistadors were facing occasional resistance by local natives they were able to gain control of the region by 1535 (Austin 96).

 

1535 First Spanish settlements and encomiendas

After taking control of the region, the Spaniards destroyed a great amount of indigenous abodes to gain space to build their own buildings. Most of the natives were forced to resettle close to their former homes so that the Europeans would have access to their force of labor (Austin 96).

 

To guarantee the constant access to native labor the conquistadors established the system of encomiendas. It was a tax that natives had to pay to the Spanish King since they were seen as his subjects (Ruiz 2006: 708). The structure was not new since the Incas had established a similar order already decades before. Throughout the viceroyalty of Peru defeated populations were forced to pay tribute to their oppressors. Due to the lack of minerals such as gold or silver in the region, Otavaleños were obliged to use their weaving skills to pay off their debts. These debts emerged because most of the oppressed natives were not able to pay the taxes charged by their oppressors at once. When the Spaniards arrived they made use of the same system to take possession of the existing capacity of work. By forcing the natives to pay tributes to their lords, which were much higher than their average income, they started to establish a machinery of textile production that has shaped the Otavalo region from then on (Kyle 118-120).

 

1544

Ecuador becomes part of the Viceroyalty of Peru (Lauderbaugh 27).

 

1563 Conquistador received a large encomienda including Otavalo City

The Otavalo region was given as an encomienda to Rodrigo de Salazar, who established a textile fabric in 1563 by forcing natives to build it. About 60 years later the obraje was the most productive all over Ecuador, employing up to 605 natives (Austin 131).

 

The same year the municipality of Otavalo was founded by the Spaniards (Newson 157).

 

1584

The Otavalo encomienda became tributary area of the Spanish Crown after the death of Salazar (Newson 162). Afterwards the indigenous population had to pay slightly less tributes to their oppressors (Austin 131).

 

1620 Otavalo serving as a guinea pig

When a concession of the Otavalo obraje was temporarily available, it soon became the most demanded one of all concessions legally available at the time. The administration decided to outsource part of it to generate a higher income return. To assure the continuance of the obraje the President of the Audiencia of Quito, Dr. Antonio de Morga, instituted reforms in Otavalo such as the return of all natives to their original place of residence. The region was used as a guinea pig to study the impact of such liberal reforms on the natives. Moreover, every native had to be given a house including a small plot close to it. At the same time all Spaniards were banished from indigenous villages by law. Lastly all natives of the province were freed from mita service, a system established by the Inca government to install a constant form of tribute. When the Spaniards arrived they copied the system. The reason for such far reaching reforms were the tensions between locals and state interests. These used to let the natives work to death, while the interest of the state was to conserve economic success as long as possible. However, as the distinct corruption among the administration of the obraje increased, at this time natives owed the state more than 100,000 pesos of tributes, since officials embezzled it (Kyle 119).

 

1623                      

The Spanish Crown opened another textile factory in Peguche, about 2.5 km away from Otavalo (Kress 11).

 

1648 Otavalo as the biggest mill in the New World

Otavalo and nearby Peguche mills became the biggest mills in the New World, employing over 700 natives (Newson 163). Most of the goods produced were sent to Peru and Colombia, where mine workers were in need of work clothes. Due to the introduction of the Spanish loom in Otavalo, which was more efficient than the native techniques, production increased. As a result of this innovation Otavalian products were also sent to Spain and Bolivia.

 

19th century collapse of the encomienda system

When the encomienda system collapsed new forms of peonage were established throughout the Spanish colonies. In Otavalo the system of mita was modified, which meant that natives were forced to work as slaves on haciendas or obrajes. At regular intervals the oppressors claimed a provision of indigenous labor force. Those who were able to remain independent in areas where no colonial ownership was established by the Spaniards, produced goods to sell outside of the Otavalo region. At that time only landowners were able to remain independent. Therefore many natives began to parcel out land to their children. Most of the land was bought from haciendas by native Otavalos. Sometimes a union of native communities would manage to own an entire hacienda (Kress 12).

 

1821 Independence of Ecuador                                 

1850 First woven fabrics from Great Britain arrived in Otavalo, which accelerated the process of production of handmade Otavalian goods (Kress 12).

 

1917 Competition increases

After the independence of Ecuador it was possible to import cheap British textile products. As competition increased within the following years, entrepreneurs tried to compete by lowering their production costs. Besides the attempt to mechanize production, they made use of the huasipungo system, another form of peonage, which ended officially in 1964. A huasipungero received land on a hacienda in return for working for the landlord (Kyle 120-122).

 

Simultaneously, in order to buy land and thereby freedom, many Otavaleños started to produce handmade weaving products at home and sell them within the region (Kress 10-13).

 

The introduction of Casimir and the hunger for land

After the British were able to control almost every bit of the Ecuadorian cloth market, Otavaleños started to produce casimir. The product was an imitation of a British poncho made of cashmere. The product was sold mostly within the region and became quite popular. By using cheap material many natives were able to maximize their income and thereby invest in land (Meisch 132).

  

1940s First business trips

By the 1940s the amount of weaving products produced in the region of Otavalo increased constantly. Some Otavaleños started to sell their handmade products also in Quito, Caracas, Bogotá and Lima. Therefore they were often praised by white landlords as very productive (Kyle 125-142).

 

1950  Rosa Lima

Rosa Lima, a native from the Otavalo region, worked in the U.S. Embassy in 1950. She was well known by the US American employees for her textile production in Peguche, where many of them purchased clothing from her shop. Finally, Rosa visited the White House and made a trip to New York. Furthermore she was interviewed by an ethnographer, which made her story and the region of Otavalo more famous around the world. Nowadays she considers herself the one who changed the course of Otavalo (Kyle 125-133).

 

1950s

American products, which were even cheaper than casimir, entered the Ecuadorian market and forced the Otavalos to modify their production. Instead of copying European and American products, weavers started to sell their ethnicity in form of indigenous patterns (Meisch 2011: 130-134).

 

1964 Law of Agrarian Reform and Colonization

The abolition of Ecuador’s feudal system took place in 1964 when a reform was put in place that made land available to both haciendas and non-haciendas. (Kyle 134) One of the reasons for various internal reforms was pressure from within the population that the government had to face. When in 1954 a study was published by the Economic Research Department of the Central Bank of Ecuador concerning the low earnings of laborers, people claimed an improvement of living conditions. To avoid a communist revolution it was necessary to improve the living conditions of the indigenous population as well. Therefore the Law of Agrarian Reform and Colonization was passed by the military government, which officially provided land to people who worked in the huasipungo system. Cooperatives were found and minimum wages were introduced, as well as a social security system for agricultural workers (Blankstein 79).

 

By the 1950s and 1960s local merchants began to send their children to schools. For the first time children from the Otavalo region received high school diplomas and later were send to universities in Quito and others in the United States, Europe and Cuba. Some of them returned to the region, others found professional positions abroad, among them a linguist at the University of Wisconsin (Kyle 152).

 

1970s                

The land reform of 1964 also included a social factor that provided access to education for all Ecuadorians. Traditionally, most natives were excluded from the education sector, however Otavaleños gained certain access prior to the reforms, probably because their weaving products generated an international interest for their community, a benefit that was not very common at the time since most natives were not paid attention by the state (Kress 17).

 

Moreover international interest for the region increased during the 1970s when volunteer Peace Corps were send to Otavalo by the United States as part of an aid program. At the same time the Dutch government send development specialists, to see how weaving production could expand. The program was financed by the United Nations and coordinated by an Dutch artist. (Wibbelsmann 2009: 34). Their task was to examine available possibilities of commerce in the region. After the Dutch found out about the potential of Otavalian products, they decided to send modern machinery to Ecuador,they also presented new patterns to the weavers that included designs from North, Central and South America. Thereby production became more flexible, which made it possible to establish an apparatus towards a niche market. That is to say those natives were able to generate constant incomes (Kyle 134-138).

 

Furthermore, they were able to secure constant access to education for their children through these adjustments. A claim that was always very dominant among natives of the region, as well as the claim for the establishment of cultural institutions. The local population was interested especially in the fight against racism and discrimination. One of the most famous institutions established in 1976 is called „Taller Cultural Causanacunchic“. Among other programs it established a system of support for students and pupils. Such examples show that the incomes of the local natives can be seen as the basis for an improvement in the education sector in general. Additionally, the members of „Taller de Cultural Causanacunchic“ established various programs concerning the improvement of health-care, education, communications and indigenous identity. The increase of incomes is thus directly connected to an increase of the education level.

 

1973 Construction of the Pan Americana and Oil boom

To secure a constant increase in sales US American and Dutch specialists were in need of a tourist industry. Until 1973 there was only a poor dirt road connecting Quito and Otavalo. That year the Pan-American Highway, which also passes through Otavalo, was built. This way the region was easier accessible to tourists. At the same time it offered fast access to Quito’s international airport. Furthermore, the Poncho Plaza, a public square in the city center of Otavalo, was paved by the Dutch the same year. Simultaneously various kiosks were built where merchants could sell their products. A few months later further reforms were passed, which were financed by the 1970s Ecuadorian oil boom. Barriers to real estate ownership as well as those concerning access to education were eliminated for natives (Kress 19).

 

Present day Otavalo

By the end of the 1970s merchants started to sell their products to tourists. When more people in Europe and the United States became aware of the „miracle“ of Otavalo, „miracle“ describing the outrageous economic success of local natives, more and more tourists started to visit the region. Therefore profits began to rise rapidly (Kress 20).

 

Since 1990

By the early 1990s merchants and weavers made approx. $9.1 million per year by selling their products. Kress (20) estimates that up to $40 million were annually generated in the region, including all services, exports and tourists spendings.

 

We are currently working on recent developments concerning the economic sector of Otavalo. For further information see economy.