Ecuador: adjustment policy impacts on truncated development and democratisation

Abstract

Before the debt crisis and the adoption of neoliberal stabilisation and adjustm ent policies in the early 1980s, Ecuador' s econom ic history was dem arcated by three m ajor phases of export-led econom ic grow th and diversi® cation. In com parison with other Latin Am erican countries, overall, average grow th rates were rapid, although erratic, during the course of the twentieth century. However, the country' s developm ent record rem ained poor, if we consider as integral to that process across the board improvem ents in living standards and a capacity to sustain econom ic grow th and diversi® cation on the basis of internal m arkets as well as of external stimuli.Following the implementation of stabilisation and adjustm ent progra mm es, grow th and developm ent suffered marked deterioration. In 1997 per capita GDP hovered around its 1981 level. 1 W ith regard to social conditions, indigent households m ade up a third of the urban population in late 1993 and the overall national poverty ® gure stood at 56% in 1995Ð 42% and 76% in urban and rural areas respectively. W orsening poverty resulted from increased unem ploym ent and underem ploym ent and from the decreased incomes of those who managed to hold on to jobs: in 1992 the total wage bill came to only 56.6% of its 1982 level; m anufacturing sector labour was most severely affected, with a 60% salary loss.At the same time, inequality increased dram atically. For exam ple, while the wage bill declined, m anufacturing sector net business income more than doubled from a base index of 100 in 1982 to 210 in 1992 and average net business incom e rose to 152.8; the top 1% of urban income earners increased their share of total income from 15.7% to 19% between 1988 and Novem ber 1993 and the top 5% , from 34% to 40.8% . In 1992±95 the highest decile of incom e earners amassed 35 times more than the lowest decile, in com parison with a multiple of 25 in 1988±89. Moreover, future prospects of developm ent were prejudiced by dram atic reductions in public expenditure in education and healthÐ from 5.1% and 2.2% of GDP, respectively, in 1982, to 2.7% and 0.7% in 1993. From the political perspectiveÐ including govern ment accountability and the institutionalisation of political parties and popular organisations that m ight represent broad constituenciesÐ dem ocratisation remained shallow. To be sure,

Dolarización y desarrollo humano en Ecuador

“…La baja diversificación de las exportaciones ecuatorianas, el predominio de bienes primarios, y su limitado dinamismo reflejan problemas estructurales de competitividad que han afectado históricamente a la economía, como resultado del carácter eminentemente rentista de las clases dominantes, la inequidad social, el bajo desarrollo del capital humano, deficiencias en el desarrollo institucional y la inestabilidad política, entre otros elementos (Larrea y North, 1997).…”

Colonial Histories and Decolonial Dreams in the Ecuadorean Amazon

“…Ecuadorean products became more competitive on the world market, but local wages plummeted. Reversing the importsubstitution instituted by the military, neoliberal export-led development and International Monetary Fund (IMF)/World Bank policies ultimately brought unprecedented levels of inequality; by the 1990s Ecuador's wealthiest quintile received three-quarters of the nation's total income, poverty levels were nearing 50 percent, and health and social programs were drastically reduced (Clark, 1997;Larrea and North, 1997).…”

“…Along the waterways and new roads, Fourth World economies were replaced by Third World international markets from the 1860s to the 1920s. The rise of a new mestizo elite and their cacao haciendas along the coast led to Eloy Alfaro's Liberal Revolution, placing the state squarely in the hands of coastal oligarchs (Guerrero, 1980;Larrea and North, 1997;Striffler, 2002). When disease and international competition brought the bust of the 1920s, minor elites were forced to secure popular legitimacy, and the popular classes gained increased influence over political agendas.…”

“…Predicated upon economic productivity, Castro's agrarian reform forced landowners to rely on exports over subsistence. Without capital, most smallholders lost their land and were forced to work for larger contractors under terrible conditions, ultimately selling bananas to the same multinationals the workers had worked so hard to escape (Larrea and North, 1997;Striffler, 2002).…”

“…International competition coupled with widespread peasant invasions ultimately expelled the company. The elites weakened, and a military junta headed by Rear Admiral Ramón Castro Jijón brought an end to the oligarchic democracy in 1963 and implemented agrarian reform (Larrea and North, 1997;Striffler, 2002).…”