Despite global financial crises that have rocked the small South American nation in recent years, Ecuador has managed to achieve landmark social and economic progress in the past decade under the left-wing government of President Rafael Correa, according to a new report from the Center for Economic and Policy Research released Monday.
The report, titled “Decade of Reform: Ecuador’s Macroeconomic Policies, Institutional Changes, and Results,” looks at key economic and social indicators, as well as policy, institutional, and regulatory changes in Ecuador since Correa took office in 2007, highlighting positive developments despite economic recession and plummeting global oil prices.
The country’s most striking achievements in this period include slashing the poverty rate by 38 percent and the extreme poverty rate by 47 percent, fueled by economic growth and employment programs that have offered a boost to many of the country’s poorest communities.
What’s more, the report also argues that Correa’s administration has ushered in historic political stability after tumultuous period that saw eight presidents in 10 years before the left-wing government came to power.
“Despite some turbulence and the harsh economic shocks associated with the 2008–09 world financial crisis and recession, and then a second oil price collapse beginning in 2014 … the government achieved unprecedented political stability,” the report stated.
As part of a battle against inequality, the government also doubled social spending from 4.3 percent of the country’s GDP in 2006 to 8.6 percent in 2016, which included an increase in spending on education, health, and urban development and housing.
Government expenditures on health services doubled as a percentage of GDP from 2006 to 2016, and spending on higher education also increased from 0.7 to 2.1 percent of GDP, the highest level of government spending on higher education in Latin America.
“The experience of Ecuador over the past decade is also relevant because it indicates that a government of a relatively small, lower-middle income developing country is less restricted by the global economy, or ‘globalization,’ than is commonly believed,” stated the report, suggesting that Ecuador could be an example for other countries in the global south to follow.
“The government was able to take advantage of a much wider range of policy choices than those generally thought to be available to developing countries of its size and income level, or even to developing countries generally,” it concluded, highlighting the government’s innovative approach.
According to the report, these results were not driven by a “commodities boom,” but from deliberate policy choices and reforms that Correa championed, including defaulting on illegitimate debt, taxing capital leaving the country and responsible and “solidarity-based” fiscal policy, among others.