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Ecuador Overview

    Context

    After having recovered from the effects of the global crisis, Ecuador’s economy reached a robust 7,9% growth in 2011.  In 2012 and 2013 growth decelerated moderately yet it maintained strong with rates of 5,2% and 4,6%, respectively. During the first quarter of 2014 this strength has maintained with an annual GDP growth of 4,9%.

    The government of President Rafael Correa Delgado—who was re-elected for a new 4-year mandate in February by an ample margin of votes —maintains the double priority of eradicating poverty and amending the productive matrix for changing, thus, the country’s productive structure and to generate an economy sustainable and diversified oriented to knowledge and innovation.  With this double priority, the public sector’s expense and investment have increased from 21% of the GDP in 2006 to 44% in 2013. A vast part of these resources was destined to both investment programs and projects in energy, infrastructure, and transportation, as well as in 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 June 2014, poverty measured by income (using the national poverty line) decreased from 37,6% to 24,5%, whilst extreme poverty was reduced from 16,9% to 8%.

    In addition, the inequality reduction has been quicker than in the region’s average: The Gini’s coefficient was reduced from 54 to 48,6  between 2006 and June 2014, since growth benefitted more the poorest. Between 2000 and 2011 a more pronounced increase of the income took place in the two poorest quintiles. In fact, the income of the poorest 40% of the population increased in 8,8%, compared with the average 5,8% of the country.

    Despite these remarkable outcomes, there is still a lot to be done to sustain and to enlarge the achievements reached in poverty reduction and inequality, as well as of the economic growth. Among the challenges are the reduction of inequality and poverty, because although the significant decrease, poverty levels are still much higher in the rural areas.  On the other hand, an international environment of progressive economic deceleration also presumes another challenge for Ecuador. The dependency not only of the trade balance but of the public investment financing of the oil sector are important facts that the country has to consider. Notwithstanding it is expected that the economic growth maintains strong with rates somewhat exceeding 4% in 2014 and 2015. 

    Last Updated: Nov 05, 2014

    LENDING
    Ecuador: Commitments by Fiscal Year (in millions of dollars)*
    *Amounts include IBRD and IDA commitments
    Strategy

    In Ecuador, the World Bank finances a US$ 305 million portfolio of several projects in infrastructure, irrigation, transport and water and sanitation. Additionally, the Bank supports different government agencies in social and environmental issues through grants and technical assistance. These projects include:

    The Manta Public Services Improvement Project seeks to support the municipality in improving the quality and sustainability of public water, sanitation and urban transport services by improving the water system in certain districts, repairing connections and sewage systems and expanding household connections. Additionally, it works to improve urban roads through paving and the construction and/or improvement of sidewalks.

    The Quito Metro Line One Project  works to improve urban transport in Quito to respond to the growing demand for public transport. The metro will reduce travel times, lower transport service operating costs, improve connectivity, safety and convenience of the current system, as well as reduce pollutants and greenhouse gas emissions. This project is implemented jointly with the Inter-American Development Bank, the European Investment Bank and the Andean Development Corporation (CAF).

    In its final phase, the Chimborazo Development Investment Project is supporting production and market access of rural families living in the Chambo and Chanchan-Chimbo river basins in Chimborazo Province through investments in irrigation and road improvement.

    The Growing with Our Guaguas (Children) grant 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.  The project’s innovative focus includes information and communication technologies (ICTs) as tools for disseminating relevant information to beneficiaries through SMS.

    Last Updated: Apr 10, 2014

    LENDING
    Ecuador: Commitments by Fiscal Year (in millions of dollars)*
    *Amounts include IBRD and IDA commitments
    Results

    Key achievements of recently concluded projects include:

    Quito Risk Reduction Program

    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 prevention and road safety issues.

    Public Sector Financial Management Project  (SIGEF)

    The objective of the SIGEF Project was to increase the effectiveness of financial management through greater transparency, efficiency and savings. The creation of a single treasury account was a significant reform that enhanced the positive impacts of the new system.

    Last Updated: Apr 10, 2014

    LENDING
    Ecuador: Commitments by Fiscal Year (in millions of dollars)*
    *Amounts include IBRD and IDA commitments
Country Office Contacts
ECUADOR +5932 294-3600

Calle 12 de Octubre 1830 y Cordero, World Trade Center, Torre B, piso 13. Quito

cmedina1@worldbank.org
USA +1 202 473-1000

1818 H Street NW, Washington, DC 20433

cmedina1@worldbank.org