Ecuador

For several years now, Ecuador has been going through a severe economic crisis. Through the COVID-19 pandemic, the structural deficits of Ecuador's development model have become even more pronounced. The IMF loans which the country needed made it necessary for the Moreno administration, which had been in office since 2017, to cut expenditures on a major scale and pursue restructuring efforts – leading to growing discontent among the population. Now a new government has been elected.

In the second ballot on 11 April 2021, the conservative candidate, Guillermo Lasso, became Ecuador's new president. He announced that he would pursue a more liberal economic policy in order to bring the country out of the crisis. In that endeavour, it will be vital to get the various stakeholders within society on board and bring them together.

Ambitious development goals

Ecuador's government has set itself ambitious development goals. The National Development Plan for the years 2017 to 2021 stipulates as its goal that all citizens should be able to lead lives free from poverty and violence. Particular prominence has been given to political and social dialogue and to giving the population a say in all areas of life. The Development Plan was framed specifically for the purpose of implementing the 2030 Agenda at the national level. In the Plan, social inclusion, environmental sustainability, political participation and peace are linked together.

Challenges

Since the oil price began to plummet in 2014, the Ecuadorian government's scope for action and policymaking has been reduced significantly – even before the COVID-19 pandemic. In the medium to long term, the key task for the government therefore continues to be to transform the country towards a sustainable development model that offers alternatives to the current reliance on commodity exports.

The extraction of resources (especially the development of oil fields and mines in sensitive ecosystems) gives rise to conflicting goals. On the one hand, the economic crisis, the pandemic and the spending cuts require additional sources of revenue. On the other hand, a commodity-based economy may result in conflict arising from social and environmental aspects or distribution issues, especially with regard to the interests of indigenous communities and to compliance with environmental and social standards. The continuing challenge for the government is therefore to work for gradual change on an environmentally sustainable and socially equitable basis.

Warning sign in an oil production area in Ecuador

An approximately 100 year old Galapagos giant tortoise, Charles-Darwin research station on the island of Santa Cruz, Galapagos Islands, Ecuador

German development cooperation with Ecuador

Germany is one of the largest bilateral development cooperation donors to Ecuador. The most recent bilateral government negotiations took place online in November 2020. Commitments made in 2020 totalled 72.2 million euros, of which 50.6 million euros was earmarked for Financial Cooperation and 21.6 million euros, for Technical Cooperation.

Germany's development cooperation with Ecuador focuses on the following three core areas:

Protecting life on Earth – the environment and natural resources, with a special focus on biodiversity and forest conservation
Peaceful and inclusive societies, with a special focus on good governance and displacement and migration
Responsibility for our planet – climate and energy, with a special focus on sustainable urban development

Ecuador also takes part in several regional and global programmes under German development cooperation. For example, the eco.business Fund supports green growth, including in Ecuador, for instance by fostering sustainable cocoa cultivation. The BMZ also works together with Ecuador in the field of sustainable supply chains, specifically on sustainable and socially equitable banana cultivation. (Ecuador is the world's number one exporter of bananas. Some 30 per cent of Ecuador's banana exports go to Germany.) The BMZ is also engaged in what is called triangular cooperation. It supports South-South cooperation with Ecuador and other Latin American countries, for example in the area of forest fire control and with regard to the scientific collection of biodiversity data.

With regard to addressing the COVID-19 pandemic and its impacts, the BMZ's focus in Ecuador is on support for green recovery activities. The BMZ also sent a German Epidemic Preparedness Team (SEEG) to Ecuador early on, which included virologists from Charité university hospital in Berlin, in order to build laboratory and diagnostic capacity on the ground, thus helping to contain the spread of COVID-19. Further activities focus on protecting vulnerable groups and providing services for them. Vulnerable groups include, in particular, displaced persons, indigenous people and women who are at risk of suffering violence.

In the field of non-governmental cooperation, the BMZ provides high levels of funding for activities by civil society organisations and faith-based organisations.

Mountain toucan in Yasuní National Park, Ecuador

The protection of the environment and natural resources is the main focus of Germany's development cooperation with Ecuador. The BMZ assists its partners in conserving the country's extraordinary biodiversity and in linking this effort with strategies for using its biodiversity sustainably and generating economic benefits from it. To that end, the BMZ provides funding and advice with regard to activities such as coastal protection and marine conservation, biodiversity conservation in the Andes, and forest protection.

In 2018, Germany agreed with the Moreno government that the two sides would increase their cooperation on “Governance, democracy and participation”. In this way, Germany wants to support the country's reform course and foster good governance at all levels of government. Public participation and the concerns of vulnerable groups play a key role in this context with a view to fostering social cohesion in Ecuador.

About two thirds of Ecuador's people are living in cities. The medium-sized cities in particular are dynamic centres of development. However, their capacity for making growth sustainable is limited. Germany is helping its partners to implement their first national strategy for sustainable urban development.