Ecuador Economic Development

1
Ecuador Economic Development

• Anna Ullrich, Jacob Miller, Annie Penlesky, Abby
  Joyce

2
The most relevant Millennium Goals

• Eradicate extreme poverty and hunger.
• Promote gender equality and empower women.
• Ensure environmental sustainability
• Reduce Child Mortality

3
Geography

• Capital Quito
• Land mountainous highlands and flat jungles.
• Problems deforestation, soil erosion,
  desertification, water pollution

4
Economic History of Ecuador

• How political instability and constant changes of
  power have adversely affected development.

5
In the beginning

• The oldest civilization residing in Ecuador, the
  Incas, showed potential for great development
  within their society.
• The arrival of Francisco Pizarro, a Spanish
  explorer, in 1532 interrupted the flow of the
  well-organized community and represented the
  first major transfer of power in the country.

6
Simon Bolivarthe George Washington of South
America?

• In 1810, a Venezuelan man named Simon Bolivar
  spearheaded an effort to liberate Venezuela,
  Colombia, Panama, Ecuador, and Peru in South
  America, after visiting the United States and
  seeing the results of their independence.
• In contrast to his liberation efforts, Bolivars
  execution of governing over the Republic of
  Colombia was not successful.

7
Whats happenin?

• 1829?The first type writer is patented.
• 1830? The first passenger railroad in the United
  States runs between Baltimore and Elliot Mills,
  Maryland.
• 1831? The city bank of New York becomes the site
  of the first bank robbery in America. 245,000 is
  stolen.

8
It was the best of times, it was the worst of
times.

• Social and political reforms in the 1920s by
  president Isidro Ayora brings in large amounts of
  revenue to the national government.
• Unfortunately, many newly instilled programs
  benefitting the Ecuadorean people did not last as
  a result of the stock market crash of 1929.

9
So many presidents, so little time.

• During the 1930s, there was a total of 14
  different presidents in power over Ecuador.
• In 1941, territorial disputes between Ecuador and
  Peru ignited war

10
Weve struck oil!

• Ecuador had always had an agricultural based and
  export oriented economy, until the 1970s when
  large oil reserves were found in the Amazon
  region of the country.

11
In the end

• The lack of a stable government for any
  significant period of time has greatly inhibited
  Ecuadors ability to implement policies and
  programs that foster development.
• What policies or programs unique to Ecuador and
  its people are needed to boost its economy?

12
Population Size and Age Distribution

• Social Well-being Indicators

13
Size of Population (in thousands) of Ecuador over
time

• The total amount of people in Ecuador in 2005
  includes 13228
• In 1970 there were 5970 people
• Predicted to be 17796 people by the year 2025.

14
Female Vs. Male Population

• In 2005 there were (in thousands) 6595 women and
  6633 men in Ecuador.

15
Age Distribution as of 2000 according to United
Nations

• 0-14 4278
• 15-59 7492
• 60-64 282
• 65-69 221
• 70-74 164
• 75-79 110
• 80-84 61
• 85-89 29
• 90-94 9
• 95-99 2
• 100 .1

16
Percentage of Population age group in 2005 from
United Nations

• Proportion of Pop. Below 15 32.4
• Proportion of Pop. 15-59 59.3
• Proportion of Pop. 60 8.3
• Proportion of Pop. Aged 80 1.2
• Median age in 2005

17
Population Growth Rates

• Annual Growth Rate for 2000-2005 1.4
• Growth rate pop. under 15 (/yr) 0.2
• Growth rate pop. 15-59 1.9
• Growth rate pop. 60 or over 3.7

18
Poverty Rate

• Poverty increased from 40 in 1990 to 45 percent
  in the year 2000. Then from 2001 to 2004 the
  poverty rate fell by 20.

19
Level of Income Inequality

• The richest 10 of the population receives three
  times more income than the poorest 50, and
  sixty-three times more than the poorest 10.

20
Literacy Rate

• Adult literacy total in 2001 91.8
• Young adult literacy rate in 2001 97.3
• Women as Percentage of Labor Force 2000 28

21
Female Enrollment in Primary Secondary School

• Net enrollment of females in primary school I
  2000 99.4
• Net enrollment of females in secondary school in
  2000 58.3

22
Life Expectancy

• Life expectancy at birth in total for 2000-2005
  74.2 Years Old
• Females 77.2 Years Old
• Males 71.3 Years Old
• Infant mortality Rate per 1000 live births in
  2000-2005 25 babies.

23
Government

• Type Republic
• Similar to ours Executive, Legislative,
  Judicial Branches
• Known for instability
• 8 Presidents in 10 years.

24
Recent History

• Abdala Bucaram president in 1996, promised
  populist economy.
• Severely accused of corruption and desposed in
  1997 due to mental illness.
• Jamil Mihuad won in 1998. Made strides in peace
  but brought Ecuador into an economic crisis.
  (froze bank accounts
• Demonstrators entered National Assembly building
  in 2000, he fled and resigned

25
More Recent History

• Gustavo Noboa, Vice President, gained control
• Brought some stability, dollarization,
  constructed oil pipelines.
• Succeeded by Lucio Gutierrez in 2003. Ran on
  anti-corruption campaign with leftist policies
• Once in office, adopted conservative views,
  especially economically and defensively.
  Stripped of power for abandoning his post

26
2006 Election

• Rafael Correa vs. Alvaro Noboa
• Noboa countrys richest man. Favored the same
  economic policies and continued integration with
  U.S.
• Correa Left of center economist, promised to
  break policies of the IMF and World Bank.
• Noboa won first round, Correa won run off.

27
Current President

• Rafael Correa
• Political party Alianza PAIS
• Served as financial minister and is an economist
• Describes himself as left-wing but not from the
  Marxist left, but rather the Christian left

28
Correas Economic Policies

• Increase percentage of oil revenues for the poor
• Against foreign investors
• Not against free trade, but doesnt advocate
  current agreement with U.S.
• Working strongly to eliminate debt. Slogan Life
  before debt. Considers much of the debt unfair.
• Critical of dollarization, but not likely to
  change it.
• Rewrite constitution

29
2008 Constitution

• A new constitution was voted on and approved in
  2008
• Constituent Assembly was voted on, over 70 PAIS
  Alliance. Over 400 people on ballot.
• Reelection is now possible.
• Provincial leaders now directly elected.

30
Corruption

• Known as one of the more corrupt governments in
  recent years
• Last 3 presidents elected presidents removed from
  office.
• Global Integrity report.

31
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32
Culture

• Regionalism
• Towns are segregated and essentially isolated
  from each other
• Economy struggles because sides are hesitant to
  expand to other regions.

33
Women

• Women are usually responsible for having and
  raising children.
• Women represent over half the population, but
  only 28 of the working population.
• There are also more than twice as many unemployed
  females as males.

34
Womens Literacy

• In indiginous areas, almost twice as many
  literate men than women
• Gets lower the more urbanized the sector, but
  still a gap

35
Whats going on in Ecuadors Economy?
36
Economic Crisis of 1999-2000

• GDP decrease by more than 6 from 3.3 in 1998 to
  -7 in 1999
• Increase in poverty
• Banking system collapsed
• Defaulted on its external debt
• Many street protests
• Forced President Mahuad
• from office

37
Solutions for the Crisis

• Adopted U.S. Dollar as legal tender
• Lead to positive growth
• Other factors

38
Economy 2002-2006

• Economic growth of 5.5
• Poverty rate also declined
• Changes in 2006
• -revenue tax
• -end of free trade with the U.S.
• -drop in petroleum production
• Election of new president Leftist Rafael Correa
  in 2006

39
Recent Economic Problems

• In December 2008
• -default on commercial bond obligations
• -revenue tax on private oil companies, later
  renegotiated

40
Economic Uncertainty 2008

• Ecuador has an uncertain future
• Private investment has dropped
• Economic growth has slowed

41
Gross Domestic Product

• 107 billion (2008 est.)
• By sector
• agriculture 6.6 industry 33.9 services
  59.5 (2008 est.)
• GDP/capita
• 7,700 (2008 est.)

42
Major Industries

• Petroleum
• Food processing
• Textiles
• Wood products
• Chemicals

43
Major Exports

• Petroleum
• Bananas
• Cut flowers
• Shrimp
• Cacao
• Coffee
• Hemp
• Wood
• Fish

• 19.4 billion
• The U.S. gets the highest percentage of Ecuadors
  exports
• Petroleum more than ½ of countries export
  earnings in recent years

44
Major Imports

• Industrial materials
• Fuels and lubricants
• Nondurable consumer goods

• 16.6 billion
• U.S. is their largest source of imports

45
Trade Policies

• Global trade organizations
• Regional free trade zones
• In 1995 World Trade Organization
• ALADI
• Bilateral free trade
• Free trade area for the Americas

46
Natural Resource Endowments

• Petroleum
• Fish
• Timber
• Hydropower

• arable land 5.71 permanent crops 4.81
  other 89.48 (2005)

47
Northern Border Problems

• Importer of precursor chemicals used in
  production of illicit narcotics
• Transit country for cocaine originating in
  Colombia and Peru
• Cash exchange by drug traffickers laundering
  money because of dollarization
• Small arms trafficking
• Organized crime

48
Possible Solutions

• Keep track of how chemicals are used and in what
  quantity they are needed in the country
• Better anti-money-laundering laws
• Enforce better policies against drugtrafficking
• Bigger penalties against drug users
• Enforce the need for a license to obtain arms

49
U.S. Dollar Problems affect all

• The fall of the U.S. dollar is affecting Ecuador
  greatly
• U.S. problems weakening the value of the dollar
  have increased inflation in Ecuador
• Price rising for goods is also a result of
  political concerns
• Positive within the negative?
• President Correa is unsure about keeping
  dollariztion
• People oppose and end

50
Options for the future

• One option is to see what happens to the dollar
  in the future
• Focus on the benefits of becoming more
  competitive
• In the near future Ecuador could launch their own
  currency again

51
Immigration Problem

• There is a high number of Colombian refugees
  because of the countries shared border due to
  people trying to escape the violence in their
  home countries
• Ecuador is trying to support their needs but it
  stretches their economy
• Creates need for more jobs
• Puts stress on the land
• (Cant always pick your immigrants )

52
Possible Solutions

• Need better border control to help control the
  population in Ecuador
• Government immigration authorities should improve
  their own agencies
• Help to improve Colombias situation to decrease
  refugee numbers
• Also encourage refugees to register

53
Summarizing the Millennium Goals
54
Goal 1 Eradicate Extreme Poverty Hunger

• Progress Poverty has increased from 40 in 1990
  to 45 in 2000. Yet from 2001-2004, poverty has
  declined by 20. Even on high economic growth
  scenarios, Ecuador will unable to achieve the
  targets set in the Millennium Declaration.

55
Goal 3 Promote Gender Equality and Empower
Women

• Progress The main inequality is seen in the
  level of education, boys generally are in school
  longer. In order to reach this goal, gender
  discrimination must be eliminated within the
  family as well as within levels of pay in the
  labor market.

56
Goal 4 Reduce Child Mortality

• Progress The Infant mortality rate in Ecuador in
  2003 was 22.3 percentage points in comparison to
  1990 when it was up to 43. Ecuador will most
  likely achieve this goal.

57
Goal 7 Ensure Environmental Sustainability

• Progress Achieving environmental sustainability
  is one of most difficult challenges facing
  Ecuador as it attempts to develop economically.
  The percentage of the population using solid
  fuels is on the increase.

58
Works Cited

• http//www.paho.org/English/MDG/cpo_meta4_ecuador.
  asp
• http//www.un.org/esa/
• http//www.worldbank.org/
• http//www.geographia.com/ecuador/history.htm
• http//www.carpenoctem.tv/military/bolivar.html
• http//www.flickr.com/photos/26285083_at_N03/27263491
  35/
• http//www.cccoin1.com/images/ec-23.jpg
• http//www.designverb.com/wp-content/images/2007/0
  9/new.5.dollar.bil.purple.jpg
• https//www.cia.gov/library/publications/the-world
  -factbook/geos/ec.html
• http//travel.state.gov/travel/cis_pa_tw/cis/cis_1
  106.html
• http//www.sl.kvl.dk/Publikationer/Udgivelser/Andr
  eVidenskabelige/IOSLFDP37.aspx?katid7BC6BFAD94-B
  8EE-49D4-9419-85C702419AFC7D
• http//www.ecuadorexplorer.com/html/history.html
• https//www.cia.gov/library/publications/the-world
  -factbook/geos/ec.htmlGeo

59
Works Cited Continued

• http//vaxxine.com/mgdsite/year/1830.htm
• http//www.trivia-library.com/a/united-states-and-
  american-history-1830.htm
• http//www.unhcr.org/news/NEWS/490f27d82.html
• http//www.voanews.com/english/archive/2008-10/200
  8-10-03-voa57.cfm?CFID153278182CFTOKEN59546838
  jsessionid8430c0d0693ecfccf09d583935575747b236
• http//www.ecuadorvolunteer.org/
• http//www.usaid.gov/
• http//report.globalintegrity.org/
• http//www.state.gov/