Contents
Introduction..................................................................................................................................................3 Goal1:EradicatingExtremePovertyandHunger........................................................................................6 TargetsandMeasures...............................................................................................................................6 CurrentStatus...........................................................................................................................................7 Recommendations....................................................................................................................................8 Goal2:AchievingUniversalPrimaryEducation............................................................................................9 TargetsandMeasures...............................................................................................................................9 CurrentStatus.........................................................................................................................................10 Recommendations..................................................................................................................................10 Goal3:PromotingGenderEqualityandEmpoweringWomen..................................................................11 TargetsandMeasures.............................................................................................................................11 CurrentStatus.........................................................................................................................................11 Recommendations..................................................................................................................................12 Goal4:ReducingChildMortality................................................................................................................12 TargetsandMeasures.............................................................................................................................12 CurrentStatus.........................................................................................................................................13 Recommendations..................................................................................................................................13 Goal5:ImprovingMaternalHealth............................................................................................................14 TargetsandMeasures.............................................................................................................................14 CurrentStatus.........................................................................................................................................14 Recommendations..................................................................................................................................15 Goal6:CombatingHIV,AIDS,Malaria,andOtherDiseases.......................................................................15 TargetsandMeasures.............................................................................................................................15 CurrentStatus.........................................................................................................................................17 Recommendations..................................................................................................................................17 Goal7:EnsuringEnvironmentalSustainability...........................................................................................18 TargetsandMeasures.............................................................................................................................18 CurrentStatus.........................................................................................................................................18 Recommendations..................................................................................................................................19 Goal8:DevelopingaGlobalPartnershipforDevelopment .......................................................................20 . TargetsandMeasures.............................................................................................................................20
CurrentStatus.........................................................................................................................................20 Recommendations..................................................................................................................................22 TransnationalIssues ...................................................................................................................................23 . IllicitDrugs..............................................................................................................................................23 Political:RelationshipwiththeUnitedStates.........................................................................................23 Conclusion...................................................................................................................................................24 CurrentStatus.........................................................................................................................................24 ProgramRecommendations...................................................................................................................25 Stage1 ................................................................................................................................................25 . Stage2 ................................................................................................................................................26 . Stage3 ................................................................................................................................................26 . Appendix.....................................................................................................................................................28
Introduction
Onlyasmallpercentageofallcountriesintheworldarereferredtoasadvancedordeveloped countries.Whatcriterionisbeingusedtodeterminewhichcountriesaresuperiortotherest?There arefivecharacteristicscommonlyfoundindevelopingcountriesthatrestraineconomicdevelopment. Thesecharacteristicsincludealowlifeexpectancy,lowstandardofeducation,poorhealthcare,high unemployment,andpoornutritionandlimitedaccesstosafewater.Ecuadorisasmall,lowermiddle income,SouthAmericancountrycurrentlystrugglingforitsdevelopment.Alowermiddleincome economyranksincomepercapitaintermsofU.S.dollarsbetween$996and$3,945peryear.Ecuadoris currentlyworkingtoimproveeachofthecharacteristicsthatclassifyitasadevelopingcountry,but thereisstillalargeamountofworkthatneedstobecompletedbeforeanadvancedeconomiclevelcan beachieved.CountriessuchastheU.S.,Canada,Australia,andJapanhavereachedthisadvanced economiclevelandcontinuedtoexpandtheeconomyovermanyyears.Ecuadoristhe73rdlargest countryintheworldbytotalareaandislocatedinWesternSouthAmerica.Ecuadorbordersthe EquatorandthePacificOcean,betweenPeruandColumbia.1TheEcuadorianeconomyislargely dependentonexportsofoil,bananas,shrimp,coffee,fish,andotherpetroleumresources.Their economicstrengthreliesheavilyonthesuccessoftheirexportsinforeignmarkets. Deterioratingeconomicperformanceinlate1997andearly1998helpedcreateasevere financialcrisisinEcuadorin1999.Severalexternalcatalystsin1997and1998contributedtothecrisis includingtheElNio,significantdropsinglobaloilprices,andinternationalemergingmarketinstability. ElNioisaweatherpatternthataffectstheareabyrisingoceanwatertemperatures.Duringthe financialcrisis,EcuadorsGDPcontractedmorethan7%.Thisinturnresultedinalargeincreasein povertyandacollapseofthebankingsystem.Thecollapseofthebankingsystemresultedinabout70% offinancialinstitutionsclosing,yearoveryearinflationofover50%,unemploymentlevelsashighas
14%,andadefaultonexternaldebt.Thedefaultonexternaldebtresultedfroma65%devaluationof theirnationalcurrency,theSucre.Ecuadorhasatotalof$15billionindebt,$7billioninforeigndebt and$6billioninEcuadorianBradyBonds.BradyBonds,namedafterU.S.TreasurySecretaryNicholas Brady,wereusedasasolutioninMarch1989topreventacollapseofthebankingsystem.Ecuadorand manyotherLatinAmericancountriesparticipatedinthefirstroundofissuanceofBradyBondsbythe InternationalBankforReconstructionandDevelopment.Aftermanycountriesdefaultedontheir nationaldebt,BradyBondswereissuedasasolutiontorefinancethebondsoriginallyissuedbythe defaultingcountries.BradyBondsplayedasignificantroleinthefinancialsurvivalofEcuador throughoutthe1990sbecauseoftheirguaranteebytheU.S.Treasuryandtheirabilitytobetradedby investors.In1999,EcuadorianPresidentJamilMahuadannouncedthatEcuadorwouldonlymakehalf ofthe$98millioninterestpaymentsdueonthebondsanddefaultontheotherhalf.Followingthese events,EcuadorianofficialsmetwithcreditorstodiscussrestructuringofthecountrysBradyBonddebt. InMarch2000,EcuadorsNationalCongressapprovedaseriesofstructuralreformsand providedtheadoptionoftheU.S.dollaraslegaltenderinEcuador.TheadoptionoftheU.S.Dollaras legaltenderinEcuadorisreferredtohereafterasdollarization.Dollarization,bolsteredbyrisingoil prices,stabilizedtheeconomyandpositivegrowthreturned.Duringtheperiodfrom2002to2006,the economygrewatarateof5.5%andthepovertyleveldeclined.However,povertylevelsstillremained highat38%.Inearly2008,theeconomygrewatarateof6.5%,adirectresultoftheveryhigh petroleumprices.Again,povertylevelsremainedhighat35%.Inthesecondhalfof2008,Ecuador defaultedondebtforthesecondtimeinnineyears.Thistimethegovernmentdefaultedon$3.2billion ofbonds.Onceagain,Ecuadorfacedeconomicuncertainty,furtherdiscouragingdomesticandforeign privateinvestment.Oilandotherpetroleumresourcesaccountedformorethan40%ofexportearnings and25%ofpublicsectorrevenuesin2008.2AsshowninFigure1.1,thepriceofabarrelofcrudeoilwas thehighestithaseverbeenin2008andwassignificantlyreducedduringtheglobalrecessionin2009.
Table1.1usesalinearregressionanalysistoshowthecorrelationbetweentheannualaveragepriceofa barrelofcrudeoilandtheannualGDPperCapitaofEcuadorbetween1982and2010.Ther2valueof .7967indicatesastrongcorrelationfortheannualdata.Thisfigurecouldindicateanevenstronger correlationiftheGDPpercapitawasreleasedquarterlyinsteadofjustannually. CurrenteconomicconditionsinEcuador,relativetotheother227countriesintheworld,are showninFigure1.2.Figure1.2identifieseconomicfactorsthatneedtobeimprovedbeforefurther developmentcanoccur.ThesefactorsincludeGDP,unemployment,theamountofdebtoutstanding, inflation,andincomedistribution.SomeofthesefactorsareaddressedintheMillenniumDevelopment GoalswhichhavebeenoutlinedbytheUnitedNationsaspartofaglobalactionplantoeliminate povertyinunderdevelopedcountries.In2000,the192memberstatesoftheUnitedNationsproduced theMillenniumDeclarationwhichcontaineddetailsoftheMillenniumDevelopmentGoals.The Declarationsgoalisforeveryindividualintheworldtohaveabasicstandardofliving,freefromhunger andviolence,andtherighttofreedomandequality.TheMillenniumDevelopmentGoalsareeight developmentalgoalsthatfocusonincreasinghumancapital,increasinghumanrights,andimproving infrastructure.Theeightgoalsaretoeradicateextremepovertyandhunger;achieveuniversalprimary education;promotegenderequalityandempowerwomen;reducechildmortality;improvematernal health;combatHIV,AIDS,malaria,andotherdiseases;ensureenvironmentalsustainability;anddevelop aglobalpartnershipfordevelopment.Eachoftheeightgoalshastargetssettomeasureperformance andtoestablishabenchmarkforachievingsuccess.TheUnitedNationsseta2015targetdateto achievethesegoals.Inthispaper,IwillexamineEcuadorscurrentpositionrelativetotheeight MillenniumDevelopmentGoals.Iwillalsoaddresskeytransnationalissuessuchasenvironmental issues,illicitdrugs,politicalinstability,andsuggestwaysforfuturedevelopment.
threetargetsthatmeasuretheperformancetowardachievingthefirstgoal.Thefirsttargetstatesthat Ecuadormusthalve,between1990and2015,theproportionofpeoplewhoseincomeislessthan$1a day.Themeasuresforthistargetincludetheproportionofpopulationbelow$1(PPP),povertygap ratio,andtheshareofthepoorestquintileinnationalconsumption.Thesecondtargetistohalve, between1990and2015,theproportionofpeoplewhosufferfromhunger.Themeasuresforthistarget includethegrowthrateofGDPperpersonemployed,theemploymentrate,theproportionofemployed populationlivingbelow$1perday(PPP),andtheproportionoffamilybasedworkersintheemployed population.Thefinaltargetistoachievefullandproductiveemploymentanddecentworkforall, includingwomenandyoungpeople.Themeasuresforthistargetincludetheprevalencerateof underweightchildrenunderfiveyearsofageandtheproportionofthepopulationbelowtheminimum levelofdietaryenergyconsumption. Akeyindicatorofpovertyproblemswithinacountrycanbetracedtounequaldistributionof income.Onemethodofmeasuringinequalityinincomeisbyanalyzingthesizedistributionofincome withinacountry.Theothermethodisfunctionaldistributionofincome,whichisusedindetermining howincomeisdividedamongdifferentfactorsofproduction.Thesizedistributionofincomeis measuredonanindividualbasisbydividingthedataintogroups.Itconsidersindividualpersonsandthe totalincomethattheyreceive.ALorenzCurveisusedtoillustratethequantitativerelationship betweenthepercentageofincomerecipientsandthepercentageoftotalincometheyreceiveeach year.Thegraphincludesadiagonalline,representingthelineofperfectequality,whichgaugesthe equalityofwealthdistributioninacountry.Theareabetweenthelineofperfectequalityandthe
Current Status
Ecuadorhassucceededinachievingthefirsttarget,tohalve,between1990and2015,the proportionofpeoplewhoseincomeislessthan$1aday.In1994,theproportionofpopulationliving below$1(PPP)perdaywasashocking15.9%.By2007,Ecuadorhaddecreasedthisnumbertolessthan 5%.Between1994and2007,thepovertygapratiodroppedfrom6.8%to1.2%andthepoorest quintilesshareinnationalincomeorconsumptionincreasedfrom3.1%to3.4%.3Themeasuresforthe secondtarget,tohalve,between1990and2015,theproportionofpeoplewhosufferfromhunger,are alsobeingachieved.Figure1.3showsthatbetween1990and2010,thegrowthrateofGDP(PPP)per personemployedhasremainedrelativelyconstant.Thenumberofpeopleemployedwascalculatedby multiplyingtheemploymenttopopulationratio(15+)bythetotalpopulation(15+).Thegrowthrateof GDP(PPP)iscalculatedbydividingtheGDP(PPP)bytheemployedpopulation.Between1990and2010, theemploymenttopopulationratiohasincreasedfrom51to61.AccordingtotheUnitedNations StatisticsDivision,from1994to1998theproportionofemployedpeoplelivingbelow$1(PPP)perday decreasedfrom20.1%to5.8%.4Since1990,theproportionoffamilybasedworkersintheemployed populationhasremainedconstant.Sincetheproportionofemployedpeoplelivingbelow$1(PPP)per dayhasdecreaseddrasticallyandtheemploymenttopopulationratioandGDPhasincreasedduringthe sametimeperiod,itisevidentthatEcuadorwillachievethesecondtarget.Thefinaltarget,toachieve fullandproductiveemploymentanddecentworkforall,includingwomenandyoungpeople,isalso
closetobeingreached.Theprevalencerateofunderweightchildrenunderfiveyearsofagewas reducedfrom14.8%to9.4%between1999and2004.Duringtheperiodfrom1991to2005,the proportionofpopulationbelowtheminimumlevelofdietaryconsumptionwasreducedby11%or1 millionpeople.5 EcuadorscurrentdistributionofincomeisillustratedinFigure1.4.Figure1.4showsthatwealth wasmostequallydistributedin1995andmostunequallydistributedin2003.Between1995and2003, Ecuadorexperiencedfinancialconcerns,mostnotably,thedefaultondebtin1999.Duringthisperiod, GDPbegantoexpandbutpovertystillremainedhigherthanthatexperiencedintheprefinancialcrisis levels.Thelowest80%ofthepopulationonlycontrolledlessthan35%ofthetotalincome.However,as seeninFigure1.1Ecuadorisranked31stoutof227countriesintermsoftheGinicoefficient.Figure1.5 showsthechangesintheGiniCoefficientofEcuadorfrom1998to2010.TheGiniCoefficient experiencedadecreasefrom2000to2003andremainedrelativelystablethereafter.Asawhole,itis clearthatEcuadorcontinuestoexperiencearelativelyunequaldistributionofwealth.Figure1.6 illustratestheunemploymentrateandtheemploymenttopopulationratio.Theemploymentto populationratioistheratioofthetotalworkingageofthelaborforcecurrentlyemployedtothetotal workingagepopulation.Theratiohasshownacontinuedgradualriseeveryyearsince1990.Ecuador hasalsoexperiencedareductionintheunemploymentrateeveryyearbetween2005and2010.
Recommendations
Thereareafewmethodstoreducingpovertyinacountry.Onemethodofreducingextremely
coalitionwithEcuadorinitiatedaprojectthatwouldhelpbesiegedfinancialinstitutionslendtosmall businessowners.Between2001and2004,asaresultoftheassistancefromUSAID,theloanportfolioof financialinstitutionslendingtosmallbusinessesgrewfrom$86millionto$302million.Asaresultofthis increaseinloandollars,borrowersincreasedfrom105,000to302,000.AccordingtoaUSAIDreport, Themicroenterprisesectorprovidesjobsforanestimated1,018,135people,or25%oftheurban workforce;salesfromthesejobstotaled25.7%ofGDP.6Theincreaseinaidwillcreatenewjobsinthe alreadysuccessfulmicroenterprisesector.TheassistancefromUSAIDalsohelped21microcredit institutionssurvivetheperiodafterthefinancialcrisisandbecomeprofitable.7Anotherpossible programthatwillhelpreducepovertyistoinvestinresearchforinnovativewaystoincreaseexports andmaintainastableeconomyduringperiodswhentheirlargestexportsarestrugglinginthemarket. Thelastrecommendedprogramistosubsidizefarmingneedstohelpincreaseagriculturalproductivity andrelievethepressureonexportingpetroleumresources.
receiveaneducationforthefirsttime.Literacyisdefinedashavingtheabilitytoreadandwriteashort, simplestatementoneverydaylife.
Current Status
EcuadorscurrentstatusforauniversalprimaryeducationisbestrepresentedinFigure1.7. Figure1.7showsthenetenrollmentratioforgirlsandboys,primaryeducationcompletionrate,and numberofchildrenoutofprimaryschool.Thenetenrollmentratioforgirlsandboyshasremained above99%since1998.Theprimaryeducationcompletionratereachedalowof71%in2002buthas sincerebounded.In2006,themostrecentprimaryeducationdatawasreleasedandshowsthe completionrateexceeding80%.Figure1.7illustratesthesignificantimprovementsmadeinthe Ecuadorianeducationalsystemsincethefinancialcrisisended.In1998,therewerearound30,000 primaryagechildrenoutofschoolandjusttwoyearslaterhadbeenreducedby2/3.Itisasignificant achievementforEcuadortokeepthelevelofoutofschoolchildrensteadyaround10,000,evenas populationincreasesasaresultofincreasedmigration.Theliteracyrateof1524yearolds,womenand men,hasremainedrelativelystablebetween95.5%and96.5%inrecentyears.In2001,Ecuador financeditseducationexpenditureswith1%oftheirGDP,leavingitranked182ndintheworld.8 EcuadorscurrentpopulationstructureisdepictedinFigure1.8.Figure1.8showsthatEcuadorsage distributionisheavilyweightedwithpeoplelessthan20yearsofage.
Recommendations
Basedonthisinformation,educationalexpendituresasapercentofGDPwillneedtoescalate quickly.Byincreasingtheeducationalexpenditures,Ecuadorwillkeepupwiththeincreasingdemandat theprimary,secondary,andtertiaryeducationlevelsasthepopulationstrivestoachieveuniversal education.Ecuadorshouldinvestintheirteachersandgivethemalloftheresourcesthatareneededto
Current Status
ThereisnearperfectequalityinallaspectsofeducationforEcuador.Girlsareslightlysuperior incohortsurvivalrate,havingagreaterpercentagereachingthelastgradeofprimaryeducation.Girls
Recommendations
Thereareanumberofprogramsthatwillfurthergenderequalitythroughoutthecountry.The
Current Status
AsrepresentedinFigure1.8,itisevidentthatEcuadorisreducingchildmortality.Mortality ratesper1,000birthshavedecreasedsignificantlybothintermsofinfantsandthoseunderfive.The currentmortalityratesforinfantsandthoseunderfiveresidearound2%and2.5%,downfrom5%and 6.5%respectively.TheUnitedStatesCensusInternationalDatabasealsoshowsthepercentofoneyear oldchildrenthathavebeenimmunizedagainstmeasles.Thenumberofoneyearoldchildren immunizedhasremainedconstantat99%inrecentyears,upsignificantlyfromthelowof54%in1991.
Recommendations
Inrecentyears,thegovernmenthasshownastrongcommitmenttohealthcareandreducing
childmortality,whichisevidentbythe99%childhoodimmunizationrate.StudiesbytheNatural ResourcesDefenseCouncilshowthatinfantmortalityratescanbereducedthroughbreastfeeding. Breastfedchildrenarelesssusceptibletodiseasesandinfectionsduringtheearlystagesoflife.They arealsolesslikelytocontractdiabetes,sclerosis,orcancerbeforetheyreach15yearsofage.11 Between2005and2009,40%ofchildrenwereexclusivelybreastfedforlessthansixmonths.Duringthe sameperiod,77%ofchildrenwerebreastfedwithcomplementaryfoodfor6to9months.By implementingaprogramtopromotebreastfeeding,thereisagoodpossibilitythatthepercentageof childrenbeingbreastfedwillincreaseandalsofurtherreducechildmortalityrates.Inadditionto reducingchildmortalityrates,itdoublesasaneconomicincentiveforfamilies,allowingthemtoforego anyexpensesoninfantformula.Anotherprogram,withprovensuccessinreducingmalaria,was
Current Status
Themostrecentdatashowsmaternalmortalityrate,derivedfromvitalregistration,at130per 100,000livebirthsin2000.Thisrateisdown38%fromthe210valuein1995.Thecalculationisderived fromthedirectsisterhoodmethodadjustedestimates,aprocessofinterviewingrespondentsonthe survivalofalltheiradultsisters.13In1999,itisestimatedthatapproximately99%ofallbirthswere attendedbyaskilledhealthprofessional.Thisnumberhasremainedrelativelyconstantthrough2004 andisupsignificantlyfromthe61.3%in1987.14Theuseofcontraceptivesamongcurrentlymarried womenbetweentheagesof15and49waslastmeasuredin2004andwas72.7%,a6.9%increasefrom 1999.15Theadolescentfertilityratehasbeenslowlydescendingsince1998.In2008,theadolescent
Recommendations
WecanachievethefifthMillenniumDevelopmentGoalbyreducingthematernalmortalityrate andbyincreasingthenumberofbirthsthatareattendedbyskilledhealthprofessionals.Thereisroom foradrasticimprovementtooccurinthisarea.Maternalmortalityensuingfromcomplicationsduring birthcanbeconsiderablyreducedifthebirthsareattendedbyaskilledhealthprofessional.Thereare veryhighcostsassociatedwithbuildingamedicalinfrastructurethatwillprovidewomenwithhealth professionals.DuetothesesubstantialcostsitisunfeasibleasthistimeforEcuadortoallocatethe necessaryfunds.AnalternatesolutionistosetupmobilehealthcentersmuchliketheAmericanRed Crossandotherreliefcentersdoduringenvironmentalcatastrophes.Thesehealthcenterscandually actasaneducationalfacilityontheuseofcontraceptivesandprovideinformationonothersafesex practices.Thiswillreducetheadolescentfertilityrateandhelpkeeppeoplefromreproducingattimes whentheycantaffordit.
Current Status
EcuadorhasbeeneffectiveinhaltingandreversingHIV/AIDSdeaths.In2003,theHIV/AIDS deathsperyearwere1,700.Theyremainedatthatapproximateleveluntil2009and2010whendeaths decreasedto1,400peryear.19Since2000,thetuberculosisprevalencerateper100,000hasbeen reversing.In2004,Ecuadorexperiencedareductioninprevalenceratefrom243to196per100,000 people.Thedeathratefromtuberculosisremainsaround12.4%oftheprevalencerate.Therecent decreaseintheprevalenceratewillcauseadecreaseinthedeathrate.Ecuadorhasachievedamedium statusonthehumandevelopmentindexandcontinuestogainmomentumtowardahighhuman developmentstatus.
Recommendations
ThereisanarrayofpossiblesolutionstohelpcombatHIV,AIDS,malaria,andotherdiseases.If
Ecuadoristobetterits77thHDIranking,theeducationindexneedstoimprove.Ahighereducation indexmeanstherehavebeenanincreaseintheaveragenumberofyearsofschoolingaswellasan increaseintheexpectednumberofyearsofschooling.Theeducatedyouthwillbemoreresilientto havingsexafterunderstandinghoweasilyHIVcanbetransmitted.Ecuadoralsoneedstoinvestina programthatwillhelppeoplealreadylivingwithHIVtoreceiveassistancewithmealsandotherdaily activities.Effortstocombatmalariaareaddressedbyparticipatinginthemosquitonetprogram suggestedasamethodtoreducechildmortalityrates.Thisprogramcanbeexpandedtoincludeadults aswellastheyouthpopulation.Otherdiseasescanbesignificantlyreducedwithanimmunization program.Immunizationscanbedistributedatthemobilehealthcentersandthecostscanbesubsidized byusingapercentoftheofficialdevelopmentassistancethatisreceivedannuallyasforeignaid.
Current Status
ThereisavastarrayofenvironmentalissuesplaguingEcuadoranditssurroundingareas.The mostecologicallysensitivearea,justoffthecoastofEcuador,istheGalapagosIslands.Theissuesfaced bytheIslandsincludedeforestation,soilerosioninhighlandareas,desertification,waterpollution,and pollutionfromoilproductionwastes.Ecuadorhasmademinimaleffortstocombatflooding, desertification,anddeforestation,whichisoccurringatarateof840,000acresannually.20Landarea coveredbyforestdroppedover10%between1990and2005.Thisisasizablereductionconsidering landareacovers276,841sqkm.TheGalapagosIslandsarearguablythemostthreatenedareainSouth America.Currently,theIslandsarehometo95species,ofwhich,ninespeciesarecurrently endangered.21 ThepopulationexpansioninEcuador,representedinFigure2.1,isconsideredaseriousthreatto wildlifeintheGalapagosandonthemainland.Thecrudedeathrateremainsextremelylowandis
significantlygreaterthanthecrudebirthrate.Ecuadorexperiencedanaveragepopulationgrowthrate between1.5%and2%inrecentyears.TheotherthreattotheGalapagosisanincreasedtourism industry.Tourismisverybeneficialtotheeconomyandcanhelpinbringingacountryintodevelopment quicker,butitneedstobecloselymonitoredtoensuretheIslandsdonotgetdamagedbeyond restoration.AnothergreatsignforEcuadoristhatevenasthepopulationcontinuestogrow,therehas beenadrawbackintheslumpopulation,whichwasreducedby4%between2001and2005.Figure2.2 showstheproportionofthepopulationusingimproveddrinkingwatersources.Figure2.3identifiesthe proportionofthepopulationusingimprovedsanitationfacilities.Anupwardtrendisprominentinboth figures.Ecuadorhasreachedanothertargetfordevelopmentbyhalvingtheproportionofpeople withoutsustainableaccesstosafedrinkingwaterbetween2000and2006.
Recommendations
Deforestationcanbereducedbyplacingstrictregulationsontraditionalfarmingandoil development.Desertificationandfloodingareresultingfromaninfluxofdomestic,industrial,and agriculturalcontaminants.Thesecontaminantscanbecontainedthroughstricterenvironmental regulationswhichneedtobeenactedbythegovernment.Onewayofreducingenvironmental destructionisbyprovidingcitizenswithaccesstosafedrinkingwaterandsanitationfacilitiesthrough environmentallyfriendlymethods.Itistheresponsibilityofthegovernmenttodevelopan infrastructurethatwillleadtoeconomicgrowth.Thiscanbedonebyincreasingtravelaccessibilityin termsofairports,roadways,railways,andwaterways.Althoughallofthesearenotfeasibleduringthe remainingtimeframesettoachievetheMillenniumDevelopmentGoals,itisimportanttomake developmentsovertime.Onepositiveeffectofdevelopingasoundinfrastructureisreducingtheslum populationinurbanareas.Peoplethatmayhavebeenunemployedorunderemployednowhaveaccess tomanynewandexcitingemploymentopportunitiesthatmayhavebeenpreviouslyunattainable.
Ecuadorcancombattheozonedepletionratebyillegalizingtheuseofhydrochlorofluorocarbons (HCFCs)inanyproductssoldorproducedinthecountry.
Current Status
Theratioofadultunemploymentratetoyouthunemploymenthasdeclinedfromahighof4.8in 1995to2.6in2003.Thisisapositivesignthatdecentandproductiveworkisbeingcreatedforthe youth.However,thatfailstoaddressthepossibilitythatthegrowthrateofyouthtototalpopulationis high.Studiesshowthattheshareofyouthunemployedtototalunemployedwas53.1in1995andhas decreasedto43.1in2003.Therefore,Ecuadorisdevelopingandimplementingstrategiestocreatework foryouth.Thecommunicationindustryhasbeensignificantlyimprovedsincetheearly1990s.The availabilityoftheinternetandcellularlinesaretwooftheeasiestwaystoaccessaworldofinformation. Ausercannowquicklyaccessrelevantdata.Theinternetisusedforthecontinuedimprovementof
companiesandeconomicgrowth.AnanalysisofthedevelopmentofcommunicationsinEcuadorsince 1990ispresentedinFigure2.4.Figure2.4showstherehasbeensignificantgrowthinthenumberof usersaccessingtheinternetasawholeandasapercentofpopulation.Thenumberofinternetusers hasrisentomore15%ofthetotalpopulationsinceitsinductioninEcuadorin1993.Thenumberof cellularsubscribersasapercentofpopulationnearlydoubledfrom22.98%to39.08%,between2003 and2005. Todevelopaglobalpartnershipforeconomicdevelopment,underdevelopedcountriesoften receiveasubstantialamountofforeignaidfromtheInternationalMonetaryFund(IMF)andfrom specificcountries.TheUnitedStatesoffersthelargestamountofassistancetoEcuadorintermsof foreignaid.TheaidfromtheU.S.hasgoalstostrengthendemocracy,reducepoverty,protectthe environment,andsecuretheirborders.Between2007and2009,Ecuadorreceived$89.7millioninU.S. aid,including$39.8millionincounternarcotics.22Thesefundsonlyincludemonetaryaidthatisdirectly senttoEcuadoranddoesntcountanysortoftrade.TheforeignaidreceivedfromtheIMFisallocated totheimprovementofthetransportationinfrastructure,thereductionofpoverty,andthe improvementoftheeducationalsystem.TheOfficialDevelopmentAssistance(ODA)receivedby EcuadorfromtheIMFisgraphicallyrepresentedinFigure2.5.Foreignaidhasremainedrelativelystable between1997and2006rangingfrom$150millionto$250million.However,aidasapercentofGDP hasbeendiminishing.Ecuadorhasbeenimprovingtheprimaryeducationrateforgirlsandboys,the childmortalityrate,theaccessibilitytocleandrinkingwater,andsanitationfacilities.These improvementshavebeenmadeeventhoughaidasapercentofGDPhasbeendiminishing.This representsEcuadorsabilitytobecomeselfsufficient,andinturnadevelopedcountry.
Recommendations
Ecuadorismakinggreatstridesinitseffortforglobalconnectedness.Theinternetandcell
phoneshaveflattenedtheworldtoaonceunimaginablesize.Theinternetoffersanunlimitednumber ofbenefitstofamiliesandbusinesses.Someofthemostimportantbenefitsincludetheabilityto telecommutewhichallowsuserstoaccessalloftheirresourcesthatcouldbestoredonanoffice computeroracoworkerscomputeroverseas;theabilitytosearchquickly,easily,andeffectivelyfor informationthatwouldbeverytimeconsumingtofindinbooks;theabilityforbusinessestooffer onlinetrainingprogramsandteleconferences;theoptionforonlinebanking;andtheabilitytoemail, Skype,orinstantmessage.Ecuadorneedstoexecuteonaprogramthatprovidesmorefamilieswiththe opportunitytoaccesstheWorldWideWeb. Intheworld,thetotalnumberofinternetusersasapercentageofthetotalpopulationis28.7%. Currently,only15%ofEcuadorianshaveaccesstotheinternet.Ecuadorshouldstrivetoreachthe averagelevelwiththerestoftheworld.Aprogramthatcouldhelpincreasethispercentusesrecycled cellphonesfromdevelopedcountries.Thesephonescanbesetupwithdataplanstoallowuserstocall anywhereintheworldandaccesstheweb.Cellphonesubscribersthathaveadataplanshouldbe providedadiscountonthetaxesthatarepaidonthemonthlybillaswellassmallbusinessesowners thatareusingtheinternetintheirbusiness.DebthasbeenaseriousprobleminEcuadorinrecentyears andthegovernmentneedstotakeaction.TheEcuadorianGovernmentshouldreevaluatetheir spendingtoensurethattherewillbenomoreinstancesofdefaultingonbonds.TheOfficial DevelopmentAssistancereceivedannuallyshouldonlybeusedtodeveloptheinfrastructureorprovide neworimprovedservicestocitizens.TheODAshouldnotbeusedtofundprogramsthatarenotself sustainingbutratherareusedtoinvestinresearchinginnovativewaystoturnmoneypitprograms intoonesthatareselfsustaining.Ecuadorcanalsoestablishfreetradeagreementswithmany countriesinSouthAmericatoincreasetradeandexportrevenues.Thecurrentnegotiationstakingplace
Transnational Issues
Illicit Drugs
TherearetwomajortransnationalissuesplaguingtheEcuadorianeconomy.Transnational
issuesareissuesinvolvingorimpactingcountriesoutsideofonecountrysborders.Thefirstissueis illicitdrugs.Ecuadorissurroundedbytwolargecocaineproducingcountries,PeruandColumbia.There issignificanttransitoftheseillicitdrugsandothernarcotics.TheUnitedStatesisthedestinationfora largeportionoftheharvestedcocaine,anditneedstopassthroughtheEcuadorianwaterstoreachthe UnitedStates.Ecuadorisnearlytheperfectlocationfordrugtraffickerstostoretheircashbecauseof theweakantimoneylaunderingregimeaswellastherecentdollarizationthatoccurredin2000, allowingtraffickerstouseU.S.currencyfortheirtransactions.23Thesedrugsarenotbeingproduced withinthecountry,onlymerelytransportedacrosstheborderfromtheirneighbors.Ecuadorneedsto identifythetransportationroutesandmethodsoftransportationaswellascombatanynewshipments fromcrossingtheborder.
Conclusion
Current Status
EcuadorisstrivingtoachievethetargetsthatweresetfortheMillenniumGoals.Theyhave
sufficiencyfromforeignaid.However,Ecuadormustincreaseitseducationalexpendituresifithopes forfurtherfuturedevelopment.
Program Recommendations
Stage 1 Ihaveofferedasignificantnumberofrecommendationsforprogramsandinitiativesthatwill
allowEcuadortomeetorexceedtheMillenniumDevelopmentGoals.Theserecommendationscanbe brokenintothreestages,eachofwhichwilladdvaluetothepreviousefforts.Overall,thegoalofthe UNistoimprovethequalityoflifeforallindividualsintheworld.EcuadorcanhelptheUNachieveits goalbyimplementingmyrecommendationsinthreestages.Thefirststagewillidentifyprogramsin Ecuadorthatarebeingannuallyfunded,butnotimproved,andrequirelittletonocapitaltoimplement Expertsshouldbehiredtoresearchalternatemethodsofprovidinggoodsorservicesinprogramsthat canbeselfsustaining,ratherthanprogramsthatareburdenonthegovernmentsfinancialresources. Theseselfsustainingprogramsareresponsibleforcreatingarevenuestreamthroughfeesandother methodstocoveralloftheirexpenses.Theseprogramswillbemanagedinthesametraditionalmanner asnonforprofitprograms.Thefreetradeagreementsthatarecurrentlyinnegotiationsneedtobe completedasawaytoincreaseexportsandcreateaccesstonewmarkets.Afterthegovernment restructuresexistingprogramstoeliminatewastefulspending,theirspendingcanberedirectedinto subsidizedfarming.Throughsubsidizedfarming,Ecuadorwillseeanincreaseinagricultural productivity.TheincomereceivedfromtheIMF,U.S.,andothercountriesshouldcontinuetobespent forthepurposesthatithasbeensenttoachieve.Anotherrecommendationinthisstageistoillegalize HCFCsandotherharmfultoxinstocombatozonedepletion.Myotherrecommendationscallfor stricterenvironmentalregulationstocombatdeforestationandalsoenactingalawthatrequireswomen toholdacertainpercentageofseatsinnationalparliament.
Stage 2 Thesecondstageofrecommendationsfocusesonimprovingbusinessesandhealth.Thefirst programofthisstageistocreateastrongmicrofinancesectorthatencouragesEcuadorianstocreate theirownbusinesseswhentheyareunemployed.Thegovernmentneedstosetasidefundsthat guaranteeacertainamountofmoneytostartupbusinesses.Thiswillallowpeopletheopportunityto createabusinesseveniftheywouldnotbeabletogettheloanfromabankwithoutthehelpofthe government.Instage1,governmentfundedprogramswererestructuredtoeliminateallwasteful spending.InthisstageitisnecessarytofocusoneducationalexpendituresasapercentageofGDP.By increasingeducationalexpenditures,therewillbetheabilityeducateteachers;providenewtextbooks andtechnology;andensurethateverystudentcanattendaschoolthatisinreasonableproximityto theirhomes.Improvementsingenderequalityshouldalsooccurinthesecondstage.Thegovernment shouldlaunchanincentiveprogramprovidingtaxcreditstobusinessesthathaveestablishedtraining andrecruitingprogramsthatrecognizegenderequalityanddonthaveapayscalethatisgenderbiased. Myfinalrecommendationinthesecondstageistoprovidewomenwithanincentivetobreastfeed.This couldbeanincreasedtaxoninfantformulaorcreatingamandatorydocumentthatneedstobesigned whenpurchasinginfantformulawhichoutlinesthebenefitsofbreastfeeding. Stage 3 Thethirdstageofrecommendationsfocusesonimprovingmortalityratesbycombatinga
andonsitehealthprofessionals.Thesehealthprofessionalscanaidwithsafebirth,offerassistanceto peoplelivingwithdeadlydiseases,andadministerimmunizationsagainstdeadlydiseases.Thereare manybenefitsofhavingthesehealthcentersasmobileunitsinthisstageofEcuadorsdevelopment. Twobenefitsincludebeingabletoreachpeoplethatcanttravel,theywillbeabletotraveltowhere theyareneededmost.Myfinalrecommendationinthisstageistoprovidetaxrelieftocellphone subscribersandsmallbusinessesthathaveembracedtheinternettogrowtheirbusiness.Thecoststo benefitsofeachprograminthethreestagesarealigned.Themostcapitalintensiveprogramsarefound inthethirdstage.Afterimplementingallofmyrecommendationsinthethreestages,Ecuadorshould befinanciallysecureandhavecapitaltoinvestinitspermanentinfrastructure.Improvementstoits permanentinfrastructureincludecreationofnewroadways,airports,hospitals,andanupgradeto telecommunications.
Appendix
Figure1.1
CrudeOilPriceperBarrel
$160 $140 $120 $100 $80 $60 $40 $20 $0
Source:IOGA
DailyOilPrice
Table1.1
. regress gdppercap avgoil Source Model Residual Total gdppercap avgoil _cons
Source:IOGA
df 1 27 28
Number of obs F( 1, 27) Prob > F R-squared Adj R-squared Root MSE
= = = = = =
Figure1.2
Source:CIATheWorldFactbook
Figure1.3
GrowthRateofGDPperPersonEmployed
7,000,000 6,500,000 6,000,000 5,500,000
Population
0.14% 0.12% 0.10% 0.08% 0.06% 0.04% 0.02% 0.00% 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
GrowthRate
PopulationEmployed(15+)
Source:IndexMundi,myCalculations,U.S.CensusBureauIDB
GrowthrateofGDPperPersonEmployed
Figure1.4
LorenzCurve
70% 60% 50% 40% 30% 20% 10% 0% 10% 20% 30% 1995 40% 2003 50% 2005 60% 70% 2007 80% 90% 100%
PercentageofPopulation
Source:WorldBank
LineofPerfectEquality
Figure1.5
GiniCoefficient
60 50 40 30 20 10 0 1998 2000 2003 2006 2009 2010
Figure1.6 Figure1.7
Figure1.8
2010AgeDistribution
100+ 9094 8084 7074
AgeGroups
Females
Males
6064 5054 4044 3034 2024 1014 04 800 600 400 200 0 200 400 600 800
Population(Thousands)
Source:U.S.CensusBureau,InternationalDataBase
Figure1.9
100% %of1YearofChildrenImmunized 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 1990 1991 1992 1993
ReducedChildMortality
70 MortalityRateper1,000Births 60 50 40 30 20 10 0
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
Figure2.0
GDP(PPP)/IncomeIndex
$8,000 $7,000 $6,000 0.800 0.700 0.600 0.500 0.400 0.300 0.200 0.100 0.000 2000 2001 2002 2003 2004 2005 2006 2007 2008
GDP(PPP)
IncomeIndex
2007
Figure2.1
HumanDevelopmentIndex
0.900 0.850 0.800 0.750 0.700 0.650 0.600 0.550 0.500 2000 HDI 2001 2002 2003 2004 Year IncomeIndex 2005 2006 2008
IndexValue
EducationIndex
LifeExpectancyIndex
Source: 2008WorldDevelopmentIndicatorsCD&Authors'Calculations
Figure2.2 Figure2.3
ProportionofPopulationUsing ImprovedDrinkingWaterSources
100 90 80 70 60 50 40 30 20 10 0 1990 1995 Year
ProportionofPopulation
RuralDrinkingWater UrbanDrinkingWater
2000
2006
Figure2.4
ProportionofPopulation UsingImprovedSanitationFacilities
100 90 80 70 60 50 40 30 20 10 0 1990
Source:IndexMundi
ProportionofPopulation
1995 Year
2000
2006
Figure2.5
TotalInternetUsersandCellularSubscribers (per100Population)
6,000,000 5,000,000 4,000,000 TotalUsers 3,000,000 InternetUsers 2,000,000 1,000,000 0 1989
Source:IndexMundi
CellularSubscribers
1994
1999 Year
2004
2009
Figure2.6
OfficialDevelopmentAssistance(IMF)
300 2.50%
250
2.00%
50
0 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006
0.00%
Year
Source: WorldBank
4
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