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TOPIC 23 THE STATE AND THE ECONOMY - Coggle Diagram
TOPIC 23 THE STATE AND THE ECONOMY
VOCABULARY
Crisis: A crucial or decisive point or situation, especially a difficult
or unstable situation involving an impending change.
Accounts: A record or statement of financial expenditure and
receipts relating to a particular period or purpose.
Improvement: an instance of improving or being better.
Debt: something, typically money, that is owed or due.
Bureaucracy: a system of government in which most of the important
decisions are made by state officials rather than by elected representatives.
PARTICIPATION OF THE STATE IN THE ECONOMY
There are many opinions regarding the role
of the State in the economy and its
participation in the market such as private
initiatives. However, market forces that run
the economy without state intervention are
the foundations of neoliberalism which
affected all Latin America in the 20th
century. This neoliberalism caused capital to
concentrate in a few hands and increase poverty. In addition, the elimination of
controls causes corruption, administrative mismanagement, disorganization of the
economy, and large financial losses.
THE STATE AND THE CRISIS
There is a crisis when incomes fall, there are fewer jobs, there is no money for
education, health, housing, the State does not have money to pay its employees,
etc. The last crisis demonstrated the
importance of a State promoting
investment to generate
development, jobs, strengthen
production, etc. Projects such as
hydroelectric works Coca Codo
Sinclair, Mazar Doubas, etc. are
projects that could promote chang
THE INTERVENTION OF THE ECUADORIAN SYSTEM IN THE ECONOMY
Since the 1960s, the State has managed huge oil resources that were invested in
the construction of a wide network of roads, telecommunications, educational works,
and health. However, there were also major problems of corruption, bureaucracy
growth, space for neoliberal governments, ending in a crisis that resulted in the loss
of the currency. Only at the beginning of the 21st century there is a recovery in the
economy but there is always a risk of bureaucratic growth
THE ECONOMY AND IST PROBLEMS
Despite the potential and the variety of enterprises
in the Ecuadorian economy, deep and serious
problems affect socioeconomic development of the
country, such as the excessive concentration of
wealth, low industrialization and lack of professional
training, among others, are still a concern. These
problems are real challenges for Ecuadorian
society and its authorities, in order to build a country
with opportunities for all Ecuadorians, which
guarantees greater well-being
CHANGES
ut just as we see problems in the national economy, we also see momentous
changes and innovations that seek to address the problems of unemployment and
poverty. For the new 21st century, the country has been experiencing an economic
improvement that has allowed it to recover from the economic crisis of 1999 and has
shown signs of greater stability and growth of its economy, although the problem of
poverty has remained.
During the last few years, the Ecuadorian State has taken a turn towards a change
of organization or development model that proclaims an increase in national
industrial production and greater social protection for the population. Examples of
these signs of improvement are the settlement of foreign debt, greater social
investment, and the use of planning for government works and projects through a
national plan. This national plan seeks to redistribute the means of production and
wealth, improve education, through the use of science and telecommunications
technology, such as the Internet, to increase students' knowledge in an increasingly
globalized world. These actions will make it possible to establish greater equality of
opportunity for the entire Ecuadorian
population in the future. In summary, the
improvement of opportunities for the
neglected social sectors will result in the
improvement of their economic income,
through greater education and training
THE STATE ACCOUNTS
The State has financed its works from three main sources:
✓ Oil and fuel sales
✓ Value Added Tax (IVA)
✓ Income tax
The external or internal debt is made when the aforementioned income is not
enough.