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State and Economy
Ecuadorian State
Interventionism
Since the 1960s, Ecuador has managed huge oil resources invested in the construction of roads, telecommunications, education and health.
1999 problems:
Corruption
Bureaucracy growth
Neoliberal governments
Beginning 21st century
There was a recovery in the economy but there is always a risk of bureaucratic growth.
State Accounts
ECUADOR has financed its works from three main sources:
Oil and fuel sales
Income tax
Value Added Tax (IVA)
The external or internal debt is made when this income is not enough.
State Participation in the Economy
Elimination of controls consecuences:
Corruption
Administrative mismanagement
Disorganization of the economy
Large financial losses
Neoliberalism
-An economic trend based on free-market forces
-No state intervention
Implement policies like:
Economic adjustment
Elimination of subsidies
Reduction of public employees
Privatization of state-owned enterprises
State &
Crisis
What happens when a CRISIS occurs?
There are:
Fewer jobs: unemployment
No money for education
No money for health
No money for housing
TheState does not have money to pay its employees
1999 CRISIS
It demonstrated the importance of the State promoting investment to generate development, jobs, strengthen production.
