Ecuador

Ecuador’s 88th overall ranking is based on a stronger performance in Comparative Liveability (72nd) than in Economic Competitiveness (99th), where the country’s ranking is pulled down by low levels of skilled human capital, poor governance, and weak competitiveness.

Ecuador ranks second to last in the Latin American region, just above Bolivia, and scores negatively on almost all Economic Competitiveness indicators. The country possesses substantial reserves of oil and rich agricultural areas, and its economy is still based mainly on primary commodities. Taking into account also the amount of foreign aid that Ecuador receives, this leads to a worrying dependence score. As is often the case, money from aid and resources has gone to consumption, rather than into investment that will generate future wealth, and capital investment is lacking.

Ecuador has enjoyed nearly three decades of democratic rule, yet its democracy remains fragile. None of the previous three elected presidents have finished their terms in office, and eight presidents have served over the last decade. This has affected the consolidation of democratic institutions and harmed Ecuador’s governance, which lacks both effectiveness and regulatory quality. Furthermore, tensions with neighbouring countries such as Peru over mining and other resources have led to political and social struggles in recent years.

Ecuador scores exceptionally badly on both competitiveness indicators. It will also have a difficult road ahead as it seeks to diversify its economy. There are few highly-skilled researchers in the workforce, and high-tech exports make up a negligible proportion of GDP.

Ecuador is an extremely poor country, with nearly 35% of its population living in poverty. Income per capita is only half that of the regional average, at under $4,000, and unemployment is over 10%. Rural poverty is undoubtedly more severe than urban poverty and negatively affects the quality of life of many Ecuadorans. Many workers are excluded from the formal economy, as a consequence of poverty and a troubled political life over the last decade. Democratic rules and values have not been internalised and poor infrastructure and fragile institutions are the rule.

The emigration of almost half a million Ecuadorans in the last decade demonstrates the inability of the resource base to sustain the economy, and the absence of opportunities. The 3.26^g hours of leisure time and low reported freedom of choice for Ecuadorans further points to a lack of opportunities, somewhat mitigated by almost 90%^g of people believing that those who work hard will get ahead.

However, the situation is not unconditionally bleak, with community life and religious faith both having a significant positive effect on the Comparative Liveability ranking. The proportion of Ecuadorans who are widowed or divorced is low, at 2.5%^g and 1%^g respectively, testifying to a good quality of family life. This, combined with the moderate climate and the widespread belief that hard work will improve personal circumstances, provide a ray of hope for Ecuador’s quality of life.