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We're near the end of our time in Ecuador and Peru beckons. Our journey to the border takes us through two particularly lovely places in Ecuador's southern highlands - a most pleasant way to end our time in this beautiful country.

Cuenca is Ecuador's third largest city - albeit with fewer than half a million inhabitants - and probably its most beautiful. Blessed with a wealth of colonial architecture, many attractive churches, handsome squares and a lovely climate, Cuenca is also making a name for itself as a prime retirement destination for foreigners, generally North American ones. This might explain the town's unusual profusion of upscale restaurants (we had the best Mexican - real Mexican - food we've ever tasted here), bars and English-language bookshops - it's fancier even than Quito. Sitting on the main plaza with an ice-cream, it's easy to spot the elderly gringos milling about. And who can blame them? Cuenca is just gorgeous, and a dollar goes a lot further here than it does up north.

After a couple of days in Cuenca to enjoy its refined atmosphere - it feels more like Spain than Ecuador - excellent food and interesting shopping (Cuenca is the world capital of Panama hats, which despite their name are a 100% Ecuadorian product, woven from the local toquilla grass) we continue south to Vilcabamba, a tiny little town tucked among rolling hills not far from the Peruvian border. Vilcabamba sits in the so-called "Valley of Longevity" - so named for its apparently remarkable number of centenarians - and a plaque in the village square claims it to be a leading centre in the study of ageing. Despite certain wilder claims about the great age of some of Vilcabamba's population having been pooh-poohed by statisticians, the town, like Cuenca, attracts a large number of retired expatriates from North America and Europe. Do they come here in the hope of living longer? Who knows! It's certainly not hard to understand the appeal of the place: the pace of life in Vilcabamba is delightfully slow. The backdrop is gorgeous, everybody knows everybody else (which might actually be your idea of hell, not heaven!), and come evening time the town's residents assemble in the plaza for a chat and a cerveza or two.

It's not all warm, fuzzy and hunky-dory in Vilcabamba, though. A particularly popular hiking trail up one of the hills overlooking the town has been closed for some months following a couple of vicious attacks (of the machete variety) on foreign walkers - strange for such a peaceful-looking place. Could it be that the sudden influx of - by local standards - fabulously wealthy retirees from abroad, who have gone on a land-buying and house-building spree, has upset the town's balance? Certainly, we were told that land sells in Vilcambamba for many times more than an equivalent plot elsewhere, and there was no shortage of huge, fortified compounds (barbed wire, ten-foot concrete walls, CCTV cameras) dotted around the hills in the outskirts of town. Real-estate has soared in value, leaving Ecuadorians priced out of housing. It all left us feeling rather odd and puzzled: if you're going to surround yourself with guard dogs and razor wire, why come here in the first place? Whether locals have really benefited from the arrival of dozens of ageing foreigners is far from clear. It struck me that "retirement in Ecuador" is perhaps not quite as ethically sound as some gringos in town think it is...

That aside, we had a lovely few days in Vilcabamba, going for a brilliant two-day hack on horseback into the hills around town (with a guide whose actual name was Holger...geddit?), staying the night in a little farm high above the town and experiencing, for a few short hours at least, what life is like for rural Ecuadorians. A lovely - and eye-opening - way to end our time in Ecuador.

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