After Oil Windfall, Spending on Infrastructure In Ecuador Continues ApaceEcuador is a small, resource-rich country sandwiched between the Andes mountains and the Pacific Ocean on Latin America’s western coast. Home to just over 16 million people, the country’s geography brings with it numerous advantages and pitfalls for infrastructure in Ecuador. With a landscape containing some of the continent’s tallest peaks and the thick jungle of the Amazon, infrastructure in Ecuador is a challenge — but oil revenues, largely found off the coast or in the interior of the country, have spurred a development boom over the last decade.

High oil prices in the late 2000s and early 2010s allowed the government of then-President Rafael Correa to unleash significant government spending on social services, government programs and energy and transport infrastructure in Ecuador. With the end of the oil boom in 2014 and a crash in global prices, the country found itself in a difficult financial situation. Despite the sharp decline in resource revenues, the new government of President Lenin Moreno is pushing ahead with ambitious spending on infrastructure in Ecuador.

While new funding is being dedicated to everything from hospitals to schools, the government is focusing on improvements to energy and coastal infrastructure in Ecuador. The coast around the town of Portoviejo, decimated by a 2016 earthquake that killed 673 and left more than 30,000 homeless, is a prime candidate for greater spending to rebuild damaged infrastructure and is a main focus of the government’s recently unveiled budget for next year.

Without oil revenues, the government is betting that greater public spending on infrastructure in Ecuador — supported by the World Bank and other institutional partners — can accelerate GDP growth in an economy ravaged by the fall in oil prices, the 2016 earthquake and a particularly devastating season of floods due to the El Niño weather phenomenon.

Beyond rebuilding efforts, the government is seeking more public-private partnerships for new infrastructure in Ecuador. Recently announced deals include a $65 million shrimp industry plant built by a Norwegian fish feeding company. The government is also pursuing public projects across the country, including a light rail line in the city of Cuenca and a new market in a town that borders Peru.

– Giacomo Tognini

Photo: Flickr