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Jacqueline Caverly
Nyusha Samiei

Ecuador: the Nation’s Current Issues and Potential Solutions to These

Problems

Introduction
The country of Ecuador must overcome a variety of challenges to become a well
developed nation with a stable economy. At present, Ecuadorians face high debt and an
economy highly focused a single form of income. However, a high literacy rate as well as
roughly even gender distribution show that some aspects culture within Ecuador are
nearing the standards found in a developed nation. High income from a flourishing oil
industry brings revenue into the country, and if a responsible government takes control of
the economy, diversifying industry and taking care of the suffering people, Ecuador will
have a bright future. Although Ecuador has some characteristics of a developed nation,
there are some shocking figures that reveal a significantly lower the standard of living
than that of the developed world.
Description
Although Ecuador is a predominantly Roman Catholic nation, this is not to say
that the culture does not carry extreme diversity. The official language is Spanish,
however many indigenous languages, especially Quichua, are spoken. (Central
Intelligence Agency[CIA], 2007, People)
The majority of Ecuadorians are currently living in the tropical coastline area of
the country known as the Costa. (Foley & Jermyn, 1995, p.8) This area of land is rich
with resources from the ocean, as well as attracts tourism to the many beaches. (Foley &
Jermyn, 1995, p.38) The center stretch of land within the country is known as the Sierra.
The Sierra is home to a variety of indigenous peoples who traditionally have farmed the
land for their livelihood. A large portion of the farming community can be found in the
Sierra. (Foley & Jermyn, 1995, p.53) The farthest inland area within Ecuador is known as
the Oriente and is filled with Amazonian jungle which blossoms with natural resources,
most specifically, oil. This area of land is quickly becoming more populated as the oil
industry grows, and people are forced to leave their farms of the Sierra in search of work.
(Foley & Jermyn, 1995, p.9)
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Jacqueline Caverly
Nyusha Samiei

Historically, much of Ecuador’s labor has been in the form of agriculture.

However, at present, a dramatic shift of population from farm to city can be seen. In the
past, farmers earned a living farming land in the sierra region, but new land reforms left
large companies with a majority of the most profitable land, forcing farmers to leave their
farming land and move to the city to find work. (“Ecuador Land Use” 1989 para.4)A
reoccurring trend within the Ecuadorian economy is to focus a high percent of the labor
force on one specific source of income. Often, these sources of income are cash crops,
made for sale in other countries. In the past these crops have been cocoa, bananas, and
now is oil. (Foley & Jermyn, 1995) When a significant decrease in petroleum prices
occurred during the 1990’s, many people were left in poverty. Paired with natural
disasters of 1999 and early 2000, Ecuador’s economy collapsed, forcing a switch of
currency to the US dollar. (“Ecuador Economy” 2007. para.3)
The government since then has been extremely unstable, reversing reforms that
once protected oil producers from this type of disaster in exchange for higher revenues.
(CIA, 2007 Ecuador) With an unstable government system, facing large deficit and debt
after poor economic situations of the late 1990’s there is little hope for the government to
help the poor.

Findings
Ecuador is home to an extremely diverse population. 65 percent of the population
is mestizo, 25% Amerindian, 3% black, and 7% Spanish and others. (CIA, 2007, People)
This does little to change the fact that 95 percent of the population practices
Roman Catholicism. A high literacy rate, of 91 percent, shows that education is reaching
a high number of people. However, gender discrimination plays a large role in the
education of females, who have a literacy rate of 89.7 percent compared to male 92.3
percent. Agriculture only accounts for eight percent of the total labor force, and 6.1
percent of the total GDP.
Oil, as well as industry account for 24% of the labor force, and 35.3% of the
nation’s GDP. (CIA, 2007, Economy) Having oil as a main industry, benefits the nation
by increasing the overall GDP of $4,5000 per capita. 40% of exports were attributed to
petroleum in the early 1990s. The final section of the labour force is the service industry,
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Jacqueline Caverly
Nyusha Samiei

which accounts for 68 percent of workers and 58.6 percent of the GDP composition.
Although the per capita GDP of Ecuador is quite high, many other economic indicators of
Ecuador show shocking results.
The official rate of unemployment in 2006 was 10.6%, but the underemployment rate was
47%. (CIA, 2007, Economy) 38.5% of people live below the poverty line. The natural
increase is 17.70 per 1000, and population increase is 15.54 per 1000. The dependency
ratio is 60.5%. (Calculated by figures from CIA, 2007, Economy) The infant mortality
rate reveals that overall there are 26.5 male deaths per 1000 and 17.47 deaths per 1000.
(CIA, 2007, People) The total fertility rate is 2.63 children born/ woman and the sex
ratio averages to 1.002 males/ female. Ecuador’s HDI value is 0.7 and is ranked 84th of all
nations. (World almanac library. 2004 pg.65)

Analysis
The population distribution of Ecuador is currently shifting from farm to city.
With this change is a resulting shift from labor in the agricultural industry to the service
industry. In 1999, the agricultural labor force was thirty percent of the total population,
whereas in 2001, agriculture was only responsible for eight percent of the total labor
force. (Wold Factbook, 2000, Economy) A problem with this shift lies within the service
industry. Since the service industry includes the informal work sector, one can conclude
that many workers who move to a city to find work are unable to do so and as a result do
not have formal jobs. The service industry also includes jobs that require very little
education, such as hotel maid or restaurant waiter. Therefore, one can also find that many
jobs are found to cater to people with little education. This fact is also indicated by the
high underemployment rate of 47 percent.
The migration rate indicates that people are leaving the country. The high
underemployment rate paired with this indicator leads one to believe that educated people
are leaving the country to seek better opportunities elsewhere. When the educated people
leave the country, there are far fewer chances for development, as the most educated
people are often the ones who bring about the most change.
Having Catholicism as the predominant religion throughout the country can lead
to conflict in the future. Since ninety five percent of the population follows this religion,
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Jacqueline Caverly
Nyusha Samiei

it is considered a “pillar of culture” therefore any person who chooses not to follow this
religion may face discrimination despite the fact that religious freedom is recognized by
law.
Other indicators give a positive outlook towards the future. The Fertility rate
remains at 2.63 children born per woman which is only slightly above the rate of
replacement, indicating that children are not being perceived as a resources as often is the
cause of high fertility rates in other developing nations. Beside the overall fertility rate,
one notices that the age structure of the country overall is roughly even. Moreover, the
infant mortality rate indicates that in fact, significantly more males than females die at a
young age. One can see, however, that females are gaining respect within society. 92.3%
males and 89.7% of females are receiving enough education to know how to read.
Although this indicates that females are not considered equals to males, the numbers are
extremely high compared to other developing nations.
A discrepancy between the two figures of gender ratio and infant mortality rate
leads one to believe that the infant mortality rates have not been calculated correctly.
Considering that children who surpass the infancy stage have far better chances of
surviving, and more males die during infancy, the gender ratio should indicate that more
females are living than males. Since males and females should be born in roughly equal
numbers, and the gender ratio of the entire population is approximately even, there is no
way to explain the extreme difference in male and female mortality rate other than human
error. Therefore it can be determined that females who die during infancy are not always
counted in the infant mortality rate. This could be the result of well hidden female
infanticide in hopes to cover up the fact that female babies are purposefully left to die at a
young age due to male preference.
The Ecuadorian government will play a large role in the future of the country. If
corrupt governments continue to rule, thinking more about personal gain than the people
of the country, then the poor living conditions that exist in some areas will not be
improved. Repealing laws that care for the working class as well as creating land reforms
that benefit large businesses rather than poor farmers will only cause Ecuador to fall into
a horrible spiral of debt.