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Ecuador: Economic Development & International Marketing - Coggle…
Ecuador: Economic Development & International Marketing
Investment projects in Ecuador
In 2016, the Bank approved another operation for the Ibarra government [1] (USD 52.5 million).
Also in 2016, it approved an investment operation to increase student enrollment and retention in public technical and technological institutes designed and implemented in collaboration with employers, and to strengthen the institutional management of technical and technological tertiary education (USD 90.5 million).
From July 2013 to June 2015, the World Bank's portfolio included three operations (USD 407.5 million) requested by the sub-national governments of Manta, Quito and Guayaquil.
Strengthening shared prosperity
Integration of reforms in water supply, sanitation, transport and risk management
Provided technical assistance to the National Institute of Statistics and Censuses for the publication of water, sanitation and hygiene indicators for the first time in Ecuador.
With respect to transport, the World Bank mobilized resources to build institutional capacity at the national and sub-national levels to compile and produce road accident statistics through the National Transit Agency.
Increased access to better quality services in education and social protection.
The trust funds financed several advisory and technical assistance services in areas such as the fight against malnutrition, the inclusion of disabled people and the improvement of the efficiency of the social protection system.
In addition, with a view to strengthening the country's capacity to produce timely and relevant data for decision-making, the World Bank.
Political Risk Analysis: What awaits Ecuador's economy in 2021?
The double impact of a collapse of both oil revenues and tax revenues resulted in a $13.5 billion public financing gap, causing increasing delays in payments of public sector wages and state suppliers and restricting the government's ability to provide even extremely limited stimulus programs to accelerate recovery.
It is important that investors do not overlook the governance problem that will face any candidate elected in 2021, namely, the composition of Congress. The electoral field in 2021 is the most fragmented in more than a decade, making it difficult for any candidate to consolidate an absolute majority and for a new government to advance significant reforms, including those linked to an IMF program.
The candidate of the indigenous Yaku Perez movement
The candidate (Correista), Andrés Arauz
The candidate Guillermo Lasso, a high profile banker. This consolidation has been favored by the announcement of an alliance between the two main conservative forces, Lasso's party, CREO, and the Social Christians.
In 2019, oil represented more than a third of Ecuador's export revenues. Encouraging investment and growth in new sectors will be critical to creating jobs and generating additional tax revenues.
The agreement, which has yet to be approved by the Fund's Executive Board, will provide Ecuador with $4 billion in installments this year that will allow it to pay part of its arrears and, along with additional funding from other multilaterals and China, offer some programs to revive the economy and support to contain this year's economic contraction below 10%.
The country has been greatly affected by both the virus ( COVID-19) itself and the disruption caused by efforts to contain its spread.
Fundamentally, together with a favorable debt restructuring agreement of $17.4 billion with market creditors, it will strengthen the balance of payments and ensure a steady flow of dollars into the economy, which is necessary to avoid a possible financial crisis.
Ecuador / SIZE OF GOVERNMENT
Their overall score has increased by 4.4 points due to significant improvements in fiscal health and government integrity scores.
The maximum tax rate on personal income is 35%, and the corporate tax rate has been raised to 25%.
Ecuador's economic freedom score is 51.3, making its economy the 158 freest in the 2020 Index.
The general tax burden is equivalent to 19.9% of the total national income. Government spending has amounted to 37.5% of the country's production (GDP) over the past three years, and budget deficits have averaged 4.6% of GDP. Public debt is equivalent to 46.1% of GDP.
OPEN MARKETS
The government's openness to foreign investment is below the world average.
The total value of exports and imports of goods and services is equivalent to 45.9% of GDP. The average applied tariff rate is 7.0% and 281 non-tariff measures are in force.
Although the banking sector has grown, state interference limits the overall growth of financial services. The number of non-performing loans has been increasing.