Ecuador: A Country in Poverty
Ecuador is a country located in the northwestern part of South America. Ecuador suffers from severe poverty, largely due to the unemployment rates in the country. Back in 1994, fifty-two percent of Ecuador’s population was either in poverty or at a high risk of going into poverty. This number is broken down to thirty-five percent living in extreme poverty and seventeen percent being at high-risk. Breaking down these statistics further, two-thirds of Ecuadorians living in poverty live in the rural parts of the country. As a result of the extreme poverty in the country, Ecuador is plagued by high crime rates which hinders economic development. Due to the location of the country, natural disasters such as; earthquakes, landslides, volcanic activity, floods and periodic droughts are a concern. In a poverty-poverty-stricken country, a single natural disaster can set back citizens immensely, causing any progress they have made to get out of poverty to be reset. Socially, many of the aforementioned issues can cause the effects of poverty to be transferred to the youth of the country. Almost three-quarters of the country’s youth lives in poverty. Due to these high numbers, an ever-lasting cycle of poverty occurs. In recent times, though, Ecuador has seen their poverty numbers fall. Albeit, poverty is still an issue in the country, but due to the government implementing government-run programs such as ones to educate its youth, the country is on the right path. The rest of this essay will further examine the economic, political, social and environmental issues that the country is facing, causing extreme poverty and the disparity between the quality of life in urban and rural areas.
Ecuador’s Gross Domestic Product (GDP) per capita has been growing, but at a low rate of 1.7% on average during a span of three decades from 1972 to 2002 (Lopez-Acevedo & Tinajero, 2009). Part of the reason for the poor performance of the GDP comes from Ecuador’s economy heavily relying on the exportation of oil. Between the years of 1997 and 2001, Ecuador’s oil business accounted for thirty-five percent of the country’s GDP (Lopez-Acevedo & Tinajero, 2009). As a result, economic volatility has been high and it shows in the economic status of the country. As a result of the ever decreasing revenues of oil exports, Ecuador’s government decided to increase the price of domestic products, like gasoline, to try to maintain the country’s revenues. This method proved to be insufficient. In the middle of the timeframe when Ecuador’s GDP consisted of mainly oil exports, here was a financial crisis in 1999. This crisis had a stated cost of over twenty-percent of the country’s GDP. Early in the 1990s, institutions in Ecuador began putting new reforms in place to lay a solid base for new short-term macroeconomic polices. These reforms were thought to be promising as average annual inflation had decreased to twenty-two-percent in 1995 giving a glimpse of hope, but sharply increased each year thereafter until 1999 when it reached more than fifty-percent and peaked at fifty-two-percent contributing to the crisis (Jacome, 2004). Unfortunately, during this time Ecuador faced much more than a financial crisis due to poor management by institutions. In 1997 the “El Nino” weather phenomenon also hit the country causing substantial damage to buildings and crops hindering the country’s progress in fixing the financial issues. Ecuador was in an unbelievable position being struck down at every angle with an uncontrollable financial deficit.
Times after the crisis were much brighter. GDP per capita growth rose to 2.1 percent in 2003, 6.5 percent in 2004 and 4.5 percent in 2005. In the span of of six years, the country was able to control inflation and get it to a much more manageable percent at 2.1 in 2005. However, the biggest recovery period was between 1999 and 2003 when inflation was at 7.9 percent (Lopez-Acevedo & Tinajero, 2009). While the country was able to get the GDP per capita growth and inflation under control, the population of Ecuador were still hit hard from the crisis and continued to as well.
Prior to the financial crisis, Ecuador had an extreme issue with poverty still. As at 1994, nearly four-million Ecuadorians, or roughly thirty-five percent of the population lived in poverty and on top of that, seventeen-percent of the population were at severe risk of living poverty (Hentschel, October 1996). This was a major issue as most of the population were not just living in poverty, but they were at the point where they were not able to purchase necessities, even if that was all that they spent their entire monthly earnings on. When comparing the lives of people living in an urban setting or a rural setting in Ecuador, people in the rural areas are far worse off. Two out of three people in the rural parts of Ecuador live in poverty (Hentschel, October 1996). What is both good, but unfortunate is that in Ecuador, the rural population express practical solutions to overcome their situations. The solutions that are expressed include ways to increase the productivity of their available land and workers. Training courses for their people (both agricultural and non-agricultural related) are demanded along with changes to infrastructure (Hentschel, February 1996). Thus, the issues are not highly complicated and are very practical and attainable, but the country has been unable to meet their demands as of yet, but the rural population was in their plans to rejuvenate the country.
Although, in the meantime of waiting for the rural population issues to be resolved, the population is still trying tirelessly to make do with what they have. As the rural population has limited resources, they have to subsidize their agricultural income with other activities or try different methods to help their agricultural workings. Finding alternate ways to grow crops and other products can result in an increased change of soil exhaustion and erosion leaving families in a worse position. In countries like Ecuador, people use their land to hold animals like cows. Larger animals can be used as a form of savings, like people in more developed countries use a savings account. Thus, if a family has poor land, they are then unable to hold animals that produce the most money and are limited to much smaller animals that can be held in their homes or in close proximity. The way land is divided up and owned poses another issue in the rural parts of Ecuador. Land ownership is highly concentrated in the rural communities. During the agrarian reform, small sections of fragile and unproductive land was transferred to the indigenous people of Ecuador (Hentschel, February 1996). In many communities, these lands have become highly eroded as the maintenance of the soil is near impossible. As a result, the owners of this land are unable to produce any income and must resort to other sources of income, but the opportunities in the rural communities are scarce. However, due to the poor land division in Ecuador, values of these landholdings are extremely low and hold no weight in negotiations with banks when seeking a loan to fund a new venture in order to generate an income and hinder their ability to move forward in rough times (Hentschel, October 1996).
Rurally, Ecuador is has three main regions with seven main communities. The Sierra region is made up of Melan, Jatun Era, Maca Chico and Apunag. The Coast region consists of Bellavista and Membrillal, and the lone community in Oriente is Villano. The primary ethnicity in these rural regions are indigenous, with the costal communities being of the Mastizo ethnicity. One of the most shocking facts of the rural communities is that only two of the seven rural communities have a health centre and that none of the communities have a population where everyone has access to all utilities like water, electricity and toilets (Hentschel, October 1996). As mentioned before, nearly everyone in these communities rely heavily on the agricultural industry with only and must select a temporary migration strategy during the downtimes of agriculture or engage in a commerce business using their craftsmanship skills. Nonetheless, even those paths for income generation can be difficult as near communities can be several hours away.
Education wise, nearly one-hundred percent of children under the fifteen attended school. The only discrepancy came from a drop to ninety-six percent in the Membrillal community (Hentschel, February 1996). Unfortunately, though, as children grow older the percentage of students who attend high school and beyond drops drastically. In some areas, most, if not all, do not even graduate from high school. These statistics clearly prove that education is a key contributor to the poverty issue in Ecuador. They also provide a reasonable argument that if the country can encourage enough people to continue with education in the future, poverty rates may continue to decrease.
Now though, what causes the disparity between lifestyles in the rural and urban centres of Ecuador? Two viewpoints have been argued as to the reasons for the disparity. One, labeled as the “concentration view” suggests that the disparity of wealth and living conditions does not depend on where individuals live, but rather is solely based on the individual and their personal characteristics. This view argues that rural communities are filled with people that do not have the personal characteristics that strive for personal growth and even if they lived in urban centres they would still be in the same situation. On the other hand, the second view argues that geography is the main decider. When it comes to basic services, infrastructure and more public goods, the urban centres have the upper hand. It is not unreasonable to believe that people with easier access to those things would live a better life and thus is what this viewpoint argues.
...(download the rest of the essay above)