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THE STATE AND THE ECONOMY - Coggle Diagram
THE STATE AND THE ECONOMY
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 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.
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.
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.