The Impact of Government Investment in Health Infrastructure in Ecuador

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According to the World Bank, Ecuador had a GDP per capita of USD 5,970 in 2014; a comparable level to USD 6,000 in Peru and 5,800 in Colombia for the same period. However, governmental instability and transnational organized crime has had a severe impact on Ecuador’s reputation and security over the past two decades. Times are changing though, as Santiago Caviedes, founder and CEO of Humboldt Management, explains: “despite the country’s reputation for being unstable and volatile, Ecuador is a stable, functioning and growing economy that compares very well with other economies in the region.”

“The government has started an open dialogue and we hope that this will turn into effective collaborative practices between the private and public sector”

Carlos Durán, deputy minister for Public Health

This is chiefly the result of the enormous investment in new and upgraded infrastructure that the country has witnessed during the last ten years. Carlos Durán, deputy minister for Public Health, declares that “choices made by our previous governments, created a high degree of regulatory uncertainty, which have deterred potential entrant in the market that could have helped us improve the health conditions of our citizens. However, the government has started an open dialogue and we hope that this will turn into effective collaborative practices between the private and public sector.”

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As a matter of fact, most investments to date come from the government. To this regard, Humboldt’s Caviedes asserts that “in comparison to its Andean counterparts, Peru and Colombia, Ecuador has the highest investment rate. As a result, the country’s infrastructure, namely airports, road, electric grid and health facilities, are of much better quality than in the aforementioned countries”. While the business community may be wary when targeting Ecuador as an investment destination due to the lack of private FDI inflow, Caviedes argues that “firstly, when comparing the levels of FDI inflow of Ecuador with its regional counterparts, one must take into account the fact that a majority of the FDI inflow in countries as Peru or Colombia is targeted at the mining and oil industries. On the other hand, Ecuador has implemented very restrictive policies on these sectors. Therefore, it must be taken into account that if the country has more flexible politics for these sectors in terms of international investment, Ecuador’s FDI inflow levels would be higher than what they currently stand at.”

This is also being made possible thanks to the actions of proactive government agencies like the Ecuadorian Development Bank (Banco de Desarollo del Ecuador) that show their commitment to the country with their continuous investments. Byron Romero Ruiz, the bank’s general manager, states that “our mission is to consolidate ourselves as the reference bank of excellence in the financing of public investment for our clients, who are autonomous decentralized governments.”

Writer: Luca Nardini


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