EuropeAID-Ecuador Partnership

Over the past 15 years, Ecuador has experienced significant economic and political transformation. In 2000, after years of high inflation, Ecuador introduced the U.S. dollar as a legal tender. This unconventional decision stabilized the economy and prevented hyperinflation. Stabilization, coupled with high oil prices, contributed to the economic boom in the early 2000s. The 2006 presidential elections also ushered in relative political stability. President Rafael Correa, who is currently in his second term, is supporting a shift to what he calls “21st century socialism”. The 2008 Constitution guaranteed some human rights such as “right to nature” and “right to food”. According to the World Bank, from 2001 to 2008 Ecuador’s economy grew at an average rate of 5 percent. Ecuador was adversely affected by the global crisis but managed to restart economic growth in 2011. Despite this growth, poverty and inequality continue to be the main challenges for Ecuadorian development. For some, the country’s expansion of social spending is evidence that the current government is exercising the political will to address those problems. Notwithstanding the dynamic changes in Ecuador, the European Commission’s objectives for 2011-2013 remained the same as projected in 2006 — achieve the Millennium Development Goals and reduce poverty. Over the period of 2007-2013, the European Commission allocated €137 million ($175 million) to support social programs and create sustainable economic opportunities in Ecuador. The Mid-term Review, a document published by the EC, prescribed that, for the 2011-2013 period, the EC has two priorities in Ecuador — education and economic development. The Ecuadorian government has also prioritized education and took a significant step through designing and implementing Plan Decenal de Educación 2006-15. The DEP marks important achievements towards providing universal primary education, improving education quality and eliminating social inequities in the education sector. The EC is supporting the government in achieving the targets that are set in the DEP through improving the performance of governmental social spending on education. With the understanding that employment generation is a key to fighting poverty and growing the Ecuadorian economy, the EC is focusing many of its economic development efforts on supporting small and medium-sized enterprises. Furthermore, the new EU policy objectives introduce several cross-cutting issues and additional actions in the areas of climate change, migration, drugs, energy and aid for trade. Particular attention is given to environmental concerns and climate change mitigation which are to be mainstreamed in both priority areas. Funding levels Under the National Indicative Program II (2011-2013), the EC plans to devote 55 percent to the education sector (€34 million) and 45 percent to economic development (€28 million). Priorities — Improving the quality of and access to education in Ecuador through the Plan Decenalde Educación 2006-15 (DEP) (€34 million). - Literacy campaigns with special focus on providing education for adults. - Improving the quality of education standards by implementing a National System of Evaluation. - Improving the professional development of teachers (training, improving working conditions, introducing incentive structures, etc.). - Other actions such as the establishment of an internet platform of teaching technologies, the founding of a Teaching University and the inclusion of children with disabilities in education. — Promoting sustainable economic opportunities by supporting the development of SMEs (€28 million). - Supporting the implementation of an integrated system for monitoring and evaluating public economic instruments (strategies and programs). - Supporting economic and political dialogue with the public and private sectors. - Promoting coordination among donors involved in economic development. - Possible institutional support to Ecuador-EU scientific and technological cooperation. The EC has also identified several risks in both education and economic development. In education, the main risks are the large number and diversity of participating institutions that might slow down coherent action, possible cuts in the public sector budget as a consequence of the international financial crisis, and resistance against structural reforms by the teachers’ trade union. In the area of economic growth promotion, the risks are based on the overall performance of the country’s economy and the ability of the government to deal with the social and political instability in Ecuador. Devex analysis The European Union has provided support to Ecuador for more than 30 years, but new cooperation policies and approaches proposed by the European Commission have the potential to affect the partnership. In its 2014-2020 budget, the EC has proposed to undertake a “differentiation approach” that would effectively discontinue bilateral aid to 17 upper Middle Income Countries — a group to which Ecuador belongs. The 2014-2020 budget is still under negotiation and it is yet to be seen if the proposal will be adopted. The differentiation approach is controversial due to the fact that the majority of poor people in the world live in the MICs, such as Ecuador, which are experiencing economic growth but continue to struggle with high poverty rates. Contact Delegación de la Unión Europea para Ecuador Av. Orellana E11-160 y Whymper Edificio Schuman, Quito, Ecuador Tel.: (593-2) 252-3912 Fax: (593-2) 252-7511 Email: Delegation-ecuador@eeas.europa.eu