Ecuador is an upper middle-income country that depends heavily on the export of raw materials and is vulnerable to external shocks. The growth of the economy relies almost entirely on high oil prices. The country uses the US Dollar as a national currency, therefore there is no monetary or exchange rate policy which could help with the absorption of external shocks. Ecuador is regarded as one of the least ’investor-friendly’ countries in the Americas, with a very low foreign direct investment inflow, due to what is perceived as an uncertain legal framework for foreign investors.
The following sectors have been identified for the EU intervention:
- support to sustainable and inclusive growth at the local level
- fostering sustainable trade
Considering that the country situation had been strongly impacted by the powerful 7.8 earthquake of 16 April 2016 which had a devastating effect on the provinces of Manabí and Esmeraldas, a consequent re-orientation of the main actions of the Multiannual Indicative Programme (MIP) for Ecuador 2014-17 was discussed and agreed with the Ecuadorian authorities.
The Mid-Term Review exercise has been finalised with the decision for Ecuador to extend the MIP until 2020 for fully implementing the re-oriented development cooperation package (priority 1) after the earthquake.
The priorities of the €556 million 2007-2013 Regional Programme were social, economic and territorial cohesion; sustainable development and climate change; and promotion of higher education.
- Ecuador benefits from the Regional Cooperation Programmes for Latin America (LA). With €805 million foreseen for the MIP for 2014-2020, the amount has increased substantially compared to the preceding period. This takes into account that in light of the Agenda for Change principles many countries in the region, Ecuador included, no longer receive bilateral cooperation. Priorities of the MIP are the security-development nexus; good governance, accountability and social equity; inclusive and sustainable growth; environmental sustainability and climate change; and higher education via Erasmus+ 2014-2020.
- In addition, funds from thematic programmes are made available for LA regional cooperation. Ecuador is benefitting from the WATERCLIMA programme (watershed and coastal management).
- The Commission finances activities under thematic budget lines. There are currently 28 ongoing thematic projects and total ongoing portfolio amounts to around €19.3 million (CSO-LA: 22 contracts for a total amount of €12 million; EIDHR: 5 contracts for a total amount of €1.3 million; FOOD: 1 contract for a total amount of €6 million).
- A new call for proposals for the CSOs and EIDHR thematic budget lines was launched in 2018 with a budgetary allocation of €4 million. The priorities of the call for proposals are based on the needs framed in the new roadmap with civil society 2018-2020. The roadmap process has been highly successful in Ecuador since its creation and implementation in 2015 with full involvement of member countries, in particular France and Germany. An update of the roadmap discussed with civil society and EU member countries takes into consideration the new political context and the current needs of Ecuadorian civil society.