Ecuador is a country located in Western South America and lies between Colombia and Peru. The country has struggled with political instability and experienced economic crises throughout its history. In 2017, an estimate of 21.5% of the population still lived below the poverty line. However, recent economic growth does leave a glimmer of hope for the alleviation of poverty in Ecuador. Here are five facts about poverty in Ecuador.
5 Facts About Poverty in Ecuador
- The incidence of poverty is higher in indigenous populations. As ethnic minorities and indigenous populations mainly work and live in the rural sector, they are the ones who poverty and income inequality mostly affects. There are approximately 1.1 million indigenous people in Ecuador. When looking at Ecuador’s geographical breakdown — 24.1% reside in the Amazon, 7.3% in the Southern Mountains, 8.3% in the Coastal region and on the Galapagos Islands and 60.3% reside in the Central-North Mountains’ six provinces. Among the population in the Central-North Mountains region, 87.5% continue to reside in the rural areas. According to the data from 2007 by ENEMDU, Ecuadorians experienced an ethnic wage gap of a staggering 44.9%. Those who work in the agricultural sector also have the lowest financial return — earning 30% less in their hourly wages than those who work in the informal sector.
- The government has made efforts to resolve economic issues and alleviate poverty. During the economic instability of 1999–2000, the government created multiple reforms to resolve these issues. For example, it established the U.S. dollar as a legal currency in 2001. This eventually stimulated change and brought stability to the economy. The government also developed national programs to alleviate issues surrounding poverty and further increased funding. Additionally, it facilitated access to quality education and healthcare by arranging cash transfer programs that mandated Ecuadorians educate their children and provide them with regular medical care if they wanted to participate in the program.
- The value of oil causes fluctuations in Ecuador’s economic stability. As oil is one of Ecuador’s main exports, it reveals how dependent Ecuador’s economy is on the availability and value of these natural resources. The oil boom of the early 2000s gave the government incentive to expand poverty alleviating programs, raise the minimum wage and increase social security benefits. However, as the price of oil began to deteriorate in 2014, poverty rates in Ecuador surged once again and led to an economic recession in 2016. The GDP (gross domestic product) growth in annual percentage plummeted from 7.87% in 2011 to -1.23% in 2016.
- Ecuador has been experiencing relative economic growth in recent years. Beginning in 2016, the GDP growth in the annual percentage rose to 2.37% in 2017 and remained in the positive margins at 0.05% in 2019. Another perspective is that the GDP per capita rose from $6,100 in 2016 to $6,200 in 2019. Furthermore, the GNI (gross national income) per capita calculated using the Atlas method, rose from $5,800 in 2016 to $6,100 in 2019. With these numerical facts about poverty in Ecuador, the situation appears to be moving in a positive direction.
- FEVI Ecuador is an NGO group that is working to alleviate poverty in Ecuador. FEVI Ecuador is a locally managed NGO (non-governmental organization) committed to building up intercultural education and social development projects that assist native communities. The organization is an accredited, full member of the UNESCO Coordinating Committee for International Volunteer Service, Mesa de Voluntariado and even received the appointment as the Latin American representative for CCIVS organizations in Latin America. Some examples of the various projects that the NGO partakes in – the organization has established a child care center, various schools, a health center and an elderly people center. At the “Muñequitos¨ FEVI Child Care Center in Lumbisi, the volunteers help the teachers and mothers in caring, educating and entertaining the 60 preschoolers in the community. This community of course comprises of the indigenous population. The volunteers also help at “El Comedor,” or the dining hall, by preparing food and providing activities for the elderly. Furthermore, FEVI Ecuador established a community health center for low-income populations in Cumbaya — where volunteers assist the medical professionals who are serving the native community. Finally, FEVI Ecuador volunteers work at the elementary school in the Cotacachi and Tonsupa communities with 160 students at each school, respectively.
A Positive Outlook
Despite the economic challenges that Ecuadorians faced in the past, the statistics reveal hope for the country in the years to come. The GDP and GNI have both increased over the years with the help of government reforms and the resilience of the Ecuadorian people, despite the economic instability in the past few decades and the recession in 2016. Although indigenous people in Ecuador continue to experience a significant impact from the ethnic wage gap, many volunteers have partnered with NGOs to alleviate the symptoms of poverty. With the tremendous efforts of the local government and the international community’s continuous support in alleviating poverty in Ecuador — there may come a day when Ecuador captures its freedom from devastating financial burdens.
– San Sung Kim