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USAID Information:
External Links:
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Ecuador
Please note: All linked documents are in PDF format
| Objective |
SO Number |
FY 2004 |
FY 2005 |
FY 2006 |
| Biodiversity Conservation |
518-001 |
5,011 |
4,644 |
4,329 |
| Southern Border Development |
518-011 |
1,988 |
1,488 |
2,000 |
| Democracy and Conflict Prevention |
518-012 |
7,628 |
8,250 |
5,215 |
| Northern Border Development |
518-013 |
14,912 |
14,880 |
11,540 |
| Economic Opportunities |
518-014 |
4,921 |
6,626 |
4,885 |
| Health Initiatives |
518-YYY |
|
148 |
|
| Total (in thousands of dollars) |
34,460 |
36,036 |
27,969 |
|
The Development Challenge: The year 2004 was characterized by political instability, labor strikes, popular protests, and declining social conditions for the majority of Ecuadorians. President Lucio Gutierrez's administration fought for political survival after attempts by opposition parties to remove the President from power. The President's party suffered a poor showing in the October 2004 regional and municipal elections, thus forcing the President to rely on a fractious coalition of parties in the 100 seat Congress. However, the elections were deemed to be free and fair by international observers. According to the 2004 Democratic Values Survey, public support and confidence in democracy has increased slightly since the first survey in 2001. Given the volatile political climate and fragile democracy in Ecuador, much remains to be done before stability, development, and prosperity are assured.
As an oil exporter, Ecuador has benefited from high world oil prices, resulting in a projected real gross domestic product (GDP) growth rate of 5.1% for 2004. Due to structural inefficiencies, including corruption, the improved GDP figures have not translated into real benefits for most Ecuadorians. Health, education, and other public workers have participated in strikes against the government. In addition, poor understanding among Ecuadorians of the benefits of free trade has resulted in protests against the proposed free trade agreement with the United States.
Ecuador has an annual population growth rate of 2.1%, a high infant mortality rate (30 per 1,000), a high prevalence of infectious diseases (tuberculosis, malaria, and HIV/AIDS), chronic malnutrition, and high levels of maternal and child mortality. Access to safe water and sanitation is worse than in Peru and Bolivia, and modern health care facilities are limited among urban and rural poor populations. Ecuador invests approximately 3% of its GDP in education. Rural populations, particularly indigenous people, suffer from a lack of educational opportunities.
Ecuador continues to make strides in recovering from the collapse of the economy and banking system which befell the country in 1999. Important achievements have been accomplished in the fiscal sector, especially with the Law of Fiscal Responsibility which has imposed discipline in the management of the government budget. In 1999, rampant inflation and capital flight caused Ecuador to dollarize the economy. The measure has delivered low inflation and macroeconomic stability but has also highlighted Ecuador's lack of competitiveness. This deficiency as well as the need to implement structural changes in the oil, electricity, telecommunications, and banking sectors, continue to demand for further needed macroeconomic reforms. The total external debt estimated for 2004 represents 57% of GDP and debt service estimated as a percentage of earnings from exports reaches 22.1%. Unemployment rates continue above 10%, while underemployment is approaching 50%. Over 60% of the population lives in poverty.
Ecuador continues to suffer from the destabilizing effects of drug trafficking activities in neighboring countries and the collateral effects in security. Finally, the destruction of natural ecosystems is threatening Ecuador's impressive biodiversity. The country that is one of the world's richest biodiversity centers and holds 10% of the earth's plant species and 18% of bird species, is now approaching the highest deforestation rate in South America. Technical capacity, personnel, and the political will necessary to implement regulations aimed at protecting the environment have been lacking.
The U.S. national interests in Ecuador are upholding democratic institutions; combating drug trafficking and terrorism; fostering Ecuador's economic development; building trade, investment, and financial ties; and combating poverty. Ecuador's position in the heart of South America's most violent region also underscores the country's importance to U.S. interests. A democratic and prosperous Ecuador can help restrain the spread of illegal drugs and violence across the Northern Andes.
The USAID Program: USAID is requesting FY 2005 and FY 2006 funds to address the five strategic areas: biodiversity conservation; democracy and governance; economic opportunities; and development of Ecuador's northern and southern borders. USAID supports the conservation of biologically important regions within Ecuador's protected area systems. USAID seeks to increase support for the democratic system by strengthening the transparency and accountability of democratic institutions, fostering greater participation of disadvantaged groups in democratic processes, and increasing consensus on policies critical to democratic consolidation. USAID aims to reduce rural and urban poverty by helping to develop a strong, sustainable microfinance sector in Ecuador and by improving the macroeconomic environment for more equitable growth. USAID continues to work with the Government of Ecuador to contain the spread of a coca/cocaine economy into Ecuador by supporting the construction of social and productive infrastructure projects and providing alternative income opportunities for small and medium-sized farmers along the northern border. Finally, USAID assists in the improvement of social and economic conditions of inhabitants along the Peru-Ecuador border. USAID has vigorously pursued Global Development Alliances (GDA) and has six such alliances in the areas of democracy, environment, and economic growth.
Other Program Elements: USAID's central Bureau for Economic Growth, Agriculture, and Trade (EGAT) manages three programs in Ecuador. The Farmer-to-Farmer program funds short-term, U.S. volunteer technical assistance to increase farm and agribusiness productivity and incomes. The Office of Natural Resource Management manages the Collaborative Research Support Program, which provides assistance to increase farmers' capacity to produce, utilize, and market agricultural commodities through cost effective and environmentally sustainable methods, as well as the Living Program, which provides assistance through the Wildlife Conservation Society to protect the biodiversity of the Greater Yasuni-Napo Moist Forest Landscape Conservation Area in the Ecuadorian Amazon.
USAID's Mission in Peru manages two regional programs that impact Ecuador. The Andean Trade Capacity Building program improves the technical capacity of the Andean Community as a partner in negotiations leading to the creation of the Free Trade Area of the Americas (FTAA) and strengthens regional capacity to implement the rules of trade emerging from FTAA negotiations. The Centers of Excellence for Teachers Training (CETT) for the Andean region trains teachers who work in disadvantaged communities to improve the quality of reading instruction.
In FY 2004, the Latin America and the Caribbean (LAC) Bureau supported a national household health survey. The survey, due for publication in FY 2005, will provide detailed data for program planning purposes. The LAC Bureau is designing a program to begin in FY 2005 that will address urgent needs in the health sector. Subsequent programming, funding levels, and management approaches will be determined, based on availability of funds, LAC Bureau guidance, and survey results. Ecuador also participates in other health initiatives of the LAC Bureau including: the Antimicrobial Resistance Program, Maternal Mortality Reduction Initiative, Health Sector Reform Initiative, and the Decentralization Mapping Tool Program. Country counterparts receive information on lessons learned and research conducted in these areas.
Other Donors: According to the latest official figures, overall development assistance to Ecuador in 2002 totaled approximately $236 million; the United States accounted for 53% of the grant assistance and continues to be the largest bilateral donor, followed by Germany and Spain. Other major bilateral donors include Japan, France, and the European Union. Multilateral donors include the Andean Development Corporation (CAF) (infrastructure); the Inter-American Development Bank (IDB) (economic stabilization, poverty reduction, infrastructure); and the World Bank (macroeconomic framework, economic resources access, and government institutional strengthening). USAID has worked with the International Monetary Fund, the World Bank, and the IDB to support the Government of Ecuador in the improvement of its accounts information system and the implementation of institutional reforms. USAID's assistance has been instrumental in negotiations for a free trade agreement, enabling the IDB, World Bank, the United Nations Development Program, and CAF to follow up activities initiated by USAID.
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