Poverty and Inequality in Ecuador

Authors Avatar by gabrielleanne020mailcom (student)

Student ID: w15005765

Country: Ecuador

Topic: Poverty and Inequality

Committee: Social, Humanitarian and Cultural

Poverty is a circumstance often described as a non-existing type of resource required to satisfy essential needs such as food, shelter and health (Goulden. and D’Arcy. 2014). Ecuador is a relatively poor country with a national poverty ratio in 2015 measuring at 23.3% of the population living under the poverty line. In 2007, 36.7% of the population were living in poverty, by 2016 this number had decreased to 22.9% (World Bank, 2017). The poverty rate is affected by the unstable political, economical and unequal environment of Ecuador. Inequality in Ecuador it is caused by ethnical differences between white, mestizo, indigenous and Afro-Ecuadorian groups, the last ones’ accounting for most cases of unequal treatment. The issue of inequality between the population is the hard access to education and health care by the communities. (Nopo, H. 2012).

Crude oil export has been an essential part of Ecuador’s past and present economy, rapid decrease in international oil prices and earthquakes has weakened Ecuador’s economy, reducing its exports by half in 1987. In 1999 there was a collapse of the banking system which led to a financial crisis musing hyperinflation (Luis, L and Jacome, H, 2004). Between 2006-2014 the GINI coefficient was showing a fall from 0.54 to 0.47 and displaying improvements in income for indigent population (World Bank, 2017). Ecuador’s employment sectors are mainly build of agricultural, industrial and service industry. Often indigenous families are limited to low-paid agrarian jobs keeping their communities in permanent poverty and passing it on generation to generation, (Statista, 2017).

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Due to the collapse of banking system and financial crisis of 1999, Ecuador has suffered a loss of 20% of GDP and 65% the value of its currency. Ecuador central bank has responded by reducing the lending of capital to smaller banks and causing dollarization of its economy (The Economist, 2000). Due to natural disasters such as earthquakes, Ecuador has suffered losses in infrastructure, roads, factories and others. This cause unemployment rate to rise, impoverishing the population and affecting children of malnutrition. Ethnical differences between groups have negatively participated to the economy and business. The white groups have always played ...

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