After the global crisis of 2009, the Ecuadorian economy began to recover and grew by 3.0% in 2010, reaching 7.8% in 2001. In 2012, the economy remained strong registering a growth rate of 5.1% Read More »
Due to the effects of the global crisis, GDP growth declined to 0.6% in 2009. Nevertheless, in 2010 the economy began to recover, with a growth rate of 3.0%, reaching 7.8% in 2011 (the third highest rate in the region). Economic growth remained strong in 2012, with a growth rate of 5.1%.
The government administration of President Rafael Correa Delgado—who was re-elected to another four-year term in February of this year by a wide margin – has prioritized strengthening the productive base and improving government planning capacity. Public investment has increased, from 21% of GDP in 2006 to nearly 42% in 2012. A large share of resources is allocated to programs and projects for investment in infrastructure and social sectors.
Economic growth in Ecuador has been inclusive, which has directly reduced poverty and inequality levels and increased the middle class. Between 2006 and 2012, income poverty (using the national poverty line) fell from 37.6% to 27.3% whereas extreme poverty declined from 16.9% to 11.2%.
Moreover, inequality in Ecuador decreased faster than the average for the region: the Gini coefficient fell from 54 to 48 between 2006 and 2012 whereas the middle class increased from 20% to 26% of the population between 2006 and 2009. This is because income growth among the poorest citizens surpassed that of the average for the total population: between 2000 and 2011, the highest growth in income occurred in the poorest two quintiles of the population. Income of the poorest 40% of the population rose 8.8% compared with 5.8% for the average for the total population.
Despite these results, significant challenges remain in terms of the sustainability of these achievements in reducing poverty and inequality and in ensuring sustainable, inclusive growth. More than half of the Ecuadorean population continues to live in poverty or is vulnerable to again falling below the poverty line. Targeted public investments still largely depend on the oil sector.
In Ecuador, the World Bank finances several projects in infrastructure, irrigation, transport and water and sanitation. Through donations and technical assistance, the Bank supports different government agencies in social and environmental issues. These projects include:
The Chimborazo Development Investment Project aims to increase production and market access of rural families living in the Chambo and Chanchan-Chimbo river basins within Chimborazo Province through investments in irrigation and road improvement.
The Quito Metro Line One Project seeks to improve urban transport in Quito by responding to the increasing demand for public transport. The project will reduce travel times, lower transport service operating costs, improve connectivity, safety and convenience of the current system as well as reduce emission of pollutants and greenhouse gases.
Manta Public Services Improvement Project seeks to support the municipality in improving the quality and sustainability of public water, sanitation and urban transport services.
The project Growing with Our Guaguas (Children) is implemented in 10 cantons of Chimborazo Province. The goal is to contribute to reducing chronic malnutrition among children under age five by improving the understanding and expectations of families and communities with respect to the adequate growth of children and the empowerment of parents to access basic health care services.
Key achievements of recently concluded projects include:
The program objective was to build institutional and citizen capacities for risk management through the commitment of the municipality, the academic sector, community-based organizations and strategic private-sector partnerships. The program focused on managing natural and technological risks, as well as violence and road safety issues.
The objective of the SIGEF Project was to increase the effectiveness of financial management through greater transparency, efficiency and tax savings. The creation of a single treasury account was a significant reform that enhanced the positive impacts of the new system.
Ecuador: Commitments by Fiscal Year (in millions of dollars)*
*Amounts include IBRD and IDA commitments
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