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 a significant role in distribution and rights for land, giving minorities very little land and keeping them in poverty (Martinez, A, I and Cobb, J, S. 2016).
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Unequal access to land has made other minorities unable to develop business and access markets foe selling products, causing less income in tax for the country. The lack of education has mostly affected the indigenous groups, white individuals been favoured for better-paid jobs, while indigenous individuals being pushed more into poverty. The more significant inequality in the labour market has led to contraction of middle class and a widening gap between the higher and lower class (Larrea, C. Kawachi, I. 2004).
The Ecuadorian government has aimed in the past and present to reduce poverty, inequality and increase economic growth. It has targeted to attract foreign investment into the country by establishing financial, regulatory and institutional reforms and creating a more transparent fair fiscal system. The government has increased its spending in health and education system using from oil exports (Weisbrot, 2017). The educational reform has helped population by increasing the number of schools and bilingual academic staff which has increased the number of children accessing education. Tax reform has also helped the publics spending and reduced inequality while reforms in health have led to a rise in health facilities and ease of access by individuals (Oxfam, 2013).
According to Cevallos-Lopez, D, F. and Chi, C. (2010), there are still issues regarding the distribution of health care and education, individuals still being considered by their economic and ethnic status. Regarding economic reforms, the government has introduced a human development voucher that’s aimed to help the households. However, this has been criticised for being some vote assurance form poor voters, which does not benefit the economy (Kuffer, S. and Caselli, I. 2012).
To reduce the level of poverty and inequality in Ecuador, businesses can participate by creating a fair and equal employable system for all employees. This could lead to faster and stronger economic growth that can benefit businesses, economy and well-being of all individuals regardless their backgrounds. The apprenticeship scheme and an earn-while you learn program could be introduced and made available to all individuals, indigenous and other socially excluded groups being the neediest ones. To overcome poverty and inequality, the government could make health and educational system available for all, increasing income, promote culture, improve infrastructure and create a more transparent and informative system.
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References.
Cevallos - Lopez, D, F. and Chi, C. (2010). Health care utilization in Ecuador: a multilevel
analysis of socio – economic determinants and inequality issues. Health and Planning. Volume 25, issue 3, p. 209-218. Retrieved October 20, 2017, from
Goulden, C. and D’Arcy, C. (2014). A definition of poverty. Retrieved October 17, 2017, from
Kuffner, S. and Caselli, I. (2012). Ecuador’s poverty benefit motivated by politics, not social
welfare, claim critics. Retrieved October 21, 2017, from
Larrea, C. and Kawachi, I. (2004). Does economic inequality affect child malnutrition? The
case of Ecuador. Social Science & Medicine, volume 60, p.165-178. Retrieved October 20, 2017, from file:///G:/Uny%20work/1-s2.0-S0277953604002059-main.pdf
Luis, I. and Jacome, H. (2004). The late 1990s financial crisis in Ecuador: Institutional
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Martinez, A, I and Cobb, J, S. (2016 April 17). Ecuador quake toll climbs over 400, damage
put at billions of dollars. Retrieved October 24, 2017, from
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America and the Caribbean. Retrieved October 18, 2017, from
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Oxfam. (2013). Development finance and inequality. Good practice in Ecuador, Rwanda and
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Wesibrot, M. (2017, February 14). Ecuador’s Left-Wing success story. Ecuador has cut
poverty by 38 percent, increased spending on education and healthcare, and raised per capita income. Retrieved October 28, 2017, from
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