If you've just arrived from Quito or Guayaquil, you might not believe that Cuenca is Ecuador's third-largest city. It hustles and bustles, but with a certain provincial charm. This prosperous and beautiful highland city has retained much of its colonial splendor, and, like Quito's, its city center has been declared a UNESCO World Heritage Site. No building, for example, is allowed to be higher than the highest church steeple, and along its cobblestone streets you'll find colonial mansions with wrought-iron balconies overflowing with potted plants. Here you'll still find old men gossiping in the shady squares and women drying laundry on the grass along the river banks, and on market days—Thursday and Sunday—hundreds of people from surrounding villages crowd into Cuenca's open-air plazas to buy and sell crafts and household items. But despite all that, Cuenca is one of the most advanced cities in Ecuador—it's one of the few cities in Latin America with a controlled water and sewer system.

Cuenca produces fine ceramics and textiles, but is best known for its handsome Panama hats. The cholas Cuencanas—female descendants of mixed Spanish and Cañari couples—are striking in their colorful polleras (gathered wool skirts in violet, emerald, rose, or marigold), satiny white blouses, and fine straw hats.

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