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Democracy Dies in Darkness

World

Aftermath of Ecuador's Biggest Financial Crisis

By Steveen Vargas

November 18 at 1:38 AM

January 9th, 2000

It was the day in which ex-president Jamil Mahuad announced that the U.S. dollar would be adopted as the national currency in Ecuador. In this day, people lost a tremendous amount of money due to the currency transition.

According to the United Nations, between the years of 1995 to 2005 the net number of Ecuadorian migrants is estimated to be 273,000 both male and female. This is a staggering number when compared to the population of 12.36 million at the time.

Many parents decided to immigrate to other countries to support their family. This created a generation of children that were raised by their grandparents, aunts and uncles. The country did not lose financially and mistrust in the government, but people were in a desperate state.

Net Number of Migrants in South America (1970-2015)

Country 1970-1975 1980-1985 1990-1995 1995-2000 2000-2005 2005-2010 2010-2015

The table shows the number of people who migrated out of their country in South America with Colombia, Peru and Ecuador leading the numbers from 2000 to 2005.

Dr. Brad D. Jokisch designed his dissertation to examine the impact of immigration in the livelihoods and landscapes of Ecuador. He estimates that between 1.5 to 2 million Ecuadorians currently live overseas. As a result, Ecuador came afloat through remittances sent by immigrants to their families.

Poverty headcount ratio at national poverty lines (% of population)

Between 2000 to 2006 Ecuador had 4 presidents, society was extremely affected and the presidents could not hold their positions due to the severity of the economic crisis.

In 2007 Rafael Correa runs for office and launches a political proposal sifting power from the high class and investing resources in low income communities. The movement lasted 10 years and was able to reduce Ecuador’s poverty rate, build schools, hospitals, roads and over all revive the damaged economy.

People seeing this phenomena, decided to come back to the country and by 2015 we see a great decline of migration out of the country.

World Bank national accounts data, and OECD National Accounts data files

As life continues in Ecuador, people have live through the changes in these past 18 years since the financial crisis. In the same way, Ecuador’s GDP has increased significantly in this past decade allowing the economy to stabilize. However, this has also created a division between family members who are either against or for Correa’s movement.

Above all, this message resonates with political environments around the world. The media and some politicians have purposely divided people and placed them against each other by empowering extremist in both sides to create chaos and cut dialogue between individuals. This is how societal crisis start.

Even though great progress has occurred through Correa’s political movement, Ecuador as a whole has much to improve in education, health system, city planning, and financial balance. This will feasible by investing resources wisely and reducing corruption in the seats of power in congress.