Economic Progress in Ecuador

Ken Livingstone speaking

By Theo Russell

ECUADOR’S minister for knowledge and human talent, Dr Guillaume Long, was in London to report on the successes of his country’s “Citizens Revolution” at a meeting chaired by ex-London mayor Ken Livingstone in Parliament last week.

During the economic crisis which started in the late 1990s over two million of the  country’s 13 million population emigrated. In 2006 Raphael Correa came to power at the head of the patriotic socialist PAIS Alliance and in December 2008 he defaulted on $3 billion in foreign loans, declaring them an odious debt contracted by corrupt and despotic predecessors.

Correa succeeded in reducing the debt by over 60 per cent and brought Ecuador into the Bolivarian Alliance for the Americas in June 2009.

Using Ecuador’s oil resources during the oil price boom, poverty levels have halved since 2006 and the country now has the lowest level of unemployment in Latin America.

A “dignified wage” – higher than the minimum wage – was introduced and has been steadily increased to $400 a month, while the minimum wage has now risen to the same level. The proportion of the population eligible for social security has risen from one third to two thirds.

Tax revenues have leapt after a crackdown on tax evasion by the wealthy, and investment has been channelled into roads, bridges and 22 hydro-electric plants that will allow Ecuador to export energy.

The level of GDP going into higher education is now second only to Denmark in the OECD, while salaries for school teachers have leapt from $250 to $850 a month, with plans to reach £1,000 a month.

Dr Long said the country needs to move away from an economy dependent on oil and bananas – a “plantation economy” – and faces constant pressure to join trade agreements entailing privatisations and greater access by multinationals.

But Ecuador’s “Citizens Revolution” has achieved remarkable successes, with growth around four to five per cent and rising foreign investment even after the 2008 crisis. There have been huge benefits for its people and a wave of returning migrants, for whom the government is even providing cheap loans.