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State and Economy Imagen2cfdvfcd, THE STATE AND THE CRISIS, ECUADORIAN…
State and Economy
PARTICIPATION OF THE STATE IN THE ECONOMY
The market forces that run the economy without state intervention are the foundations of the neoliberalism that affected all of Latin America in the 20th century.
also
The elimination of the controls, causes:
1
Corruption
2
3
4
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Disorganization of the economy
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Administrative mismanagement
Neoliberalism
it caused
It caused capital concentration in few hands and increase poverty.
Market forces that run the economy without state intervention.
What?
An economic trend based on free-market forces
No state intervention
How?
Implement policies like:
Economic adjustment
Elimination of subsidies
Reduction of public employees
Privatization of state-owned enterprises
Who?
IFM & other agencies
STATE ACCOUNTS
Ecuador has financed its works from three main sources:
Value Added Tax (IVA)
Income tax
Oil and fuel sales
also
The external or internal debt is made when the aforementioned income is not enough.
THE STATE AND THE CRISIS
What happens when a crisis occurs?
When there is a crisis, there is:
The State does not have money to pay its employees.
Fewer jobs: unemployment.
No money for education.
No money for health.
No money for housing.
In the last crisis of 1999.
it was demonstrated
The importance of the State in promoting investment to generate development, employment and strengthen production.
ECUADORIAN STATE INTERVENTIONISM
Since the 1960s, Ecuador has managed huge oil resources invested in the construction of roads, telecommunications, education and health.
However
There were also big problems of corruption, growth of the bureaucracy, space for neoliberal governments, which ended in a crisis that resulted in the loss of the currency.
1999 problems:
Bureaucracy growth
Corruption
Neoliberal governments
Beginning 21st century
At the beginning of the 21st century there was a recovery in the country's economy.
but always
There is a risk of bureaucratic growth.
