There was a time when people rode trains all over Ecuador, from the capital of Quito to Otovalo, Cuenca, and the coastal port of Guayaquil. More than 60 trains a day departed from the main station in southern Quito.

Then came the age of the automobile, which killed off the trains in a lot of places in the Americas, from much of the U.S. down to Patagonia. Compounding the problem for Ecuador though was the terrain: this is a land of steep, high mountains. Building the railways in the first place was daunting enough. Constantly clearing the rockslides and broken tracks after natural disasters required more resources than the government was willing to spend. So over time the journeys got chopped up into smaller pieces. That’s about to change—and more on that at the end—but here’s one of those pieces: the Devil’s Nose train ride down a very steep mountain to the bottom.

This famous train journey is unique because of the engineering challenges the builders faced (ones that took the lives of some 2,500 workers) and one novel solution to them. At one point the train goes around a bend and then comes to a stop at tracks that end. At that point the tracks are switched and the train proceeds down the mountain facing the opposite direction: the previous back of the train is now the front. This enables it to tackle a much steeper grade than it could have otherwise. (You can see that transition in the video above.)

Soon it arrives at a renovated station in the narrow canyon, which is a place you can actually spend the night now if you want. There’s a package including the train down and back, lodging, and two meals for a quite reasonable $50 per person. Regular day visitors get a bite at a panorama snack bar up some steep stairs, where there’s also a museum. Local community people perform traditional dances on the train platform. And there’s a woman with a llama for photo ops. Sure, it’s kinda cheesy, but fun.

The exciting news is, short trips like this are not going to be all there is anymore. Workers are busy restoring the line from Guayaquil to Quito and it should open by July of 2014. A lot of it is new tracks, with materials meant to hold up to tremors. At first all the effort is going into offering a luxury 4-day grand train trip to get some real funds flowing in, but it should become a true passenger line that all travelers can use eventually. It will be one of the world’s great journeys when that happens, through the “Route of the Volcanoes,” from sea level to 3,000 meters.

I first took a train ride from Quito to Cotopaxi and saw new government initiatives in action. There was a spruced-up station with an attractive new cafe serving good coffee, a room explaining the history of railroads in Ecuador, and an introductory film about the train system here in two languages. The people working at the station and on the trains were bilingual and sporting nice Tren Ecuador uniforms with a cool logo.

We clattered out of the city, past factories and homes, and climbed up the hills to a point where we could look across park lands and a valley to mountains dusted with snow on the other side. When we got to Machachi station, a brass band was playing to welcome everyone. No, this wasn’t a special occasion—they do that for every arrival.

The revitalized train system is just one more reason to visit Ecuador, which is one of the best values in the world for travelers, with a lot to offer for a reasonable price. International Living just tagged Ecuador  as their leading retirement destination in the world for the sixth year in a row. Even if you’re not trying to live to 100 in Vilcabamba, this is one of the cheapest places to live in the world–with a good quality of life. It’s also one of The World’s Cheapest Destinations for travelers at any budget level, so put it on your list if you’re heading to the Southern Hemisphere.

To check the latest options on train trips in Ecuador, see the Tren Ecuador site or book an excursion with Metropolitan Touring—-my host when I was researching Ecuador articles for another publication.

I’m currently in Quito, Ecuador, where it’s only taken me one full day to confirm that most prices are pretty much where they were last time I was here a few years ago. (See Travel Prices in Ecuador.)

The fact they use the U.S. dollar as their currency helps, but there’s also low inflation and the country grows a lot of its own food. All the fruit pictured at the top was selling for $1 a pound or less in the market.

Gasoline is heavily subsidized, which helps keep the costs of transportation down.

There’s one big change though that everyone is talking about: the price of alcohol. It has roughly doubled this year for anything imported.

Theories abound as to whether this was a sin tax to bring down consumption and raise revenues or just a way to keep more money in the country. The bottom line though is that imported brands—which is almost all of them—now often cost more than you would pay in your own country. This includes wine from Chile and Argentina, which is universally a great deal across the rest of the continent.

Ecuador has a wealth of tomatoes and sugar cane, so you’d think they could do some decent vodka and rum at least, but no go yet.

For now, there are few solutions. Bring in duty free bottles. Drink local brands (usually lousy). Drink beer.

That last one is probably the best choice as the beer is decent and it’s made in-country. No import taxes.

Where’s the cheapest place to live in the Americas? Well, it could be Nicaragua, Honduras, Paraguay, or any other number of places. But if you want a mix of cheap prices, good weather, and plenty to hold your interest, my money would be on Ecuador. It’s got mountains, jungles, cloudforests, beaches, and vibrant cities all in one package.

I’m heading down there myself in October so I’ll report back later with prices on the ground right now. But for one thing, those prices are in U.S. dollars so they don’t fluctuate much. Bring a lot of coins though: from what I hear you’ll be looked at as a crazy rich person if you try to pay with a twenty. Dollar bills rule. The list of “what you can get for a buck or less” from here in The World’s Cheapest Destinations is a long one.

International Living just named Ecuador the top retirement haven in the world in its annual list of the best places to retire. They cited its natural beauty, pleasant climate, pockets of colonial architecture, and cheap health care (like $25 doctor visits). They highlighted places where nice two-bedroom apartments go for $300 a month and places right on the beach go for $500 or $600 a month—less in the off-season. You can buy a comfortable house or condo almost anywhere in the country for under 60 grand. The editor of International Living just bought a new penthouse with a fireplace and terrace (1,000 square feet) in the mountain town of Cotacachi for $51,000

If you’re of retirement age, there are some nice incentives, like 50% off domestic airfares, 50% off public transportation, and discounts on international flights on some carriers. You can eat well for a few bucks at lunchtime no matter what your age is.

We’re taking our sabbatical in Mexico next year, but if I were advising someone with no attachments on where to get the most out of life for the least amount of money, Ecuador would be competing at the top of the list.

[Cuenca, Ecuador flickr photo by erikdeleon]

Related post: Cheapest Places to Live 2009

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