Ecuador - Current economic position and prospects

F IL E C OP X - .-s , i Report No. 507-EC Current Economic Position and Prospects- '_ tL.A. & t. F1ES of Ecuador u August 26, 1974 Latin America and the Caribbean Regional Office Not for Public Use Document of the International Bank for Reconstruction and Development International Development Association This report was prepared for official use only by the Bank Group. It may not be published, quoted or cited without Bank Group authorization. The Bank Group does not accept responsibility for the accuracy or completeness of the report.  CURRENCY EQUIVALENTS Currency Unit = Sucre (SI.) S/. 1.00 = US$O.0o US$1.00 = s/. 25.oo S/. 1 million = US$ho,000 GOVERTNENT OF ECUADOR FISCAL YEAR January 1 to Dec ember 31  This report is based on the findings of an economic mission which visited Ecuador in September-October 1973 and subsequent staff visits and discussions with the Government authorities. The mission was composed of Messrs. Jos6 A. Guerra (Chief of Mission), Eugene McCarthy (Loan Officer), Alirio Parra (Petroleum Specialist-Consultant), and Gerhard Thiebach (Economist). The main aspects reflect the situation as of April 197h.   CURRENT ECONOMIC POSITION AND PROSPECTS OF ECUADOR TABLE OF COYTENTS Page No. COUNTRY DATA SUMMARY AND CONCLUSEONS ..................... i-iv I. INTRODUCTION *..*..... ..... . 1 II. RECENT ECONOMIC DEVELOPMENTS.................... 2 III. PETROLEUM DEVELOPMENTS ..............5 IV. THE PUBLIC INVESTMENT PROGRAM ................... 10 A. The National Development Plan, 1972-77 ... 10 B. The 1973-74 Program Budget ....12 V. DEVEIWOPNENT ISSUES AND POLICIES ................. 17 A. The Basic Problem 17 B. Government Strategy and Policies .19 The Problem of Inflation . .19 Fiscal Policy. . . 21 Trade and Price Policies -..-..3 Income Policies. . 24 VI. GROWTH PROSPECTS.. .26 A. The Short-Term ....... *.. . . .... ..... 26 B. Public Finances .27 C. The Balance of Payments .................. 28 The Medium-Ternm ............28 MAP STATISTICAL APPENDIX   Page 1 of 2 pages DOUN'TRY DATA - ECUADOR AREA POPULATION DENSITY 2(1.{.CQ km-l 6.7 million (mid-1973) 22+ per / Rate of Growth: 3.,% (from 1960 1d 1-/73) 200 per km- of arable land POPULATION CILARACTERISTICS (197HEALTH (1970 Crude Birth Rate (per LOUO) 0 Population per physician 2,930 Crude Death Rate (per 1,000 ) : Population per hospital bed 520 Infant Mlortality (per i,'Od live births) 9-7 2i/ 2/ INCOME DISTRIBUTION (1Q70) DISTRIBUTION OF LAND OWNERSHIP (-1968) 7. of national income, lowest quintile % % owned by top 10% of owners 65 highest quintile 7'2>' % owned by smallest 2?%of owners 1 ACCESS TO PIPED WATER (196)) ACCESS TO ELECTRICITY (1962/ '7, of population - urban ?2 of dwellings 32 - rural c 2/ L NUJTRITION (1971- EDUCATION (1970) Calorie intake as % of requirements 79 Adult literacy rate % 68 Per capita protein intake 49 Primary school enrollment % 78 / - / GNP PER CAPITA in 1972 US $ 321 GROSS NATIONAL PRODUCT IN 1972 ANNUAL RATE OF GROWTH (