Ecuador: The Paradigm of Sumak Kawsay Good Living and the Eradication of Extreme Poverty

Ecuador: The Paradigm of Sumak Kawsay Good Living and the Eradication of Extreme Poverty

Cecilia VacaCecilia Vaca Jones

In Ecuador income poverty has dropped by 15.1 percentage points from December, 2006 to December, 2014. This means that over one million people have overcome their poverty situations. To what strategies can this achievement be ascribed?

Firstly, the adoption of the Sumak Kawsay Good Living as Ecuador’s development model fostered the approval of the Constitution in 2008, which radically transformed and rebuilt the legal, politic, and economic structure of the country. The programmatic focuses of the country to attain Good Living are defined within this new regulatory framework, by breaking up with traditional concepts concerning the classification of fundamental rights and promoting the creation of our own structure, consisting of the rights to good living, those of priority attention people and groups, the rights of communities, towns and citizenships, the rights to participation, the rights to freedom, the rights of nature, and the rights to protection.

Secondly, the expression and enforceability of such rights through services, programmes, institutions, policies, and regulations have entailed an extension of the coverage, especially with regard to healthcare and educational services, with the objective to enhance capabilities and to generate opportunities for the whole population. Thus, healthcare services have been increasing from 16 to 43millions during the 2006-2014 period. In 2014 the net attendance ratio for basic general education went from 91.2% to 96.20%, thus becoming almost universal. During the same year the net attendance ratio in high schools went from 47.9% to 65.0%.

Thirdly, the sustained growth of investments in the social sector has been a crucial factor in bringing about this change. Before 2007, the country was overwhelmed by the payment of external debt and by the unfair contracts related to oil investments. Until 2006 the payment of the external debt amounted to 9% of the GDP,whereas social expenditure hardly reached 4% of the GDP. In 2007 the National Government, following a successful renegotiation of external debt, considerably raised tax returns and the recovery of oil surpluses, thus actually reversing this situation, and dramatically increased social investments. To quote some examples we may mention the increase of the budget on health which, in the year 2000, was equal to USD 8,558,743.10 and,in 2014, to USD 695,368,520.38, which is tantamount to a variation of  8025% during the mentioned period. Something similar is occurring in the educational sector, whose budget in 2000 was equal to USD 1,674,215.48 and, in 2014, to USD 728,557,212.52. If we take into account the budget on the whole social sector during the same period, it started with USD 33,920,242.59 and we closed the year 2014 with an overall budget of USD 1,827,212,230.63.

Finally, we implemented strategies focused on improving family income, such as the universalization of social security,  access to decent work, and conditional cash transfers which, notwithstanding their positive impact and although they have enabled us to attain interesting rates for coverage and employment, are still not enough.

The complex strategies adopted have enabled over 1,450,000 people to come out of poverty and extreme poverty measured through incomes. In 2006 income poverty amounted to 37.6%, whereas in 2014 it was equal to 22.5%. As regards extreme income poverty, in 2006 it was equal to 16.9%, whereas in 2014 the rate was 7.7%.

In addition to this, according to ECLAC Ecuador is considered as the Latin American country where the reduction of inequality has been highest. In 2006 the Gini index was equal to 0.54 and in 2014 to 0.47%. These results not only show that we have been effective in reducing poverty, but that we have also managed to build a more equal country, where wealth is generated and redistributed among the population, thus producing greater equality.

The lessons learned by the National Government confirmed that the eradication of poverty depends most of all on political will. In Ecuador such will began in 2007 with the mobilizing eagerness of Sumak Kawsay, and it has since expanded into a “Latin American awakening”that has involved different countries in the region through actions carried out by charismatic leaders.

Furthermore, it is clear that social transformation processes require several years to consolidate and to generate permanent results among the population and in the country at large. Consequently, it is now time to contemplate new challenges that should be focused not just on the extension of coverage, but as well on improving the quality of social services, on the participation and empowerment of citizens for the preservation of such services and the consolidation of equalitarian productive systems fostering associativity and partnerships.

We need to set out progressive universalization strategies for social security, conceived as a citizen’s right that protects the population in situations of need, independently from the situation of the labour market. In this perspective, in November 2014, the National Government proposed to the National Assembly a draft law called “Law for Labour Justice and Acknowledgement of Work in the Home”. On the one hand, this draft law is aimed at labour stability for workers, through the abolition of fixed-term contracts and other precarious  contractual arrangements; on the other hand, it is aimed at recognizing the right to social security for people doing unpaid work in the home.

The National Government provides for the affiliation of approximately 1.5 million people who have been working unpaid in the home, 450,000 of which receive Human Development Vouchers. The proposal envisages the universalization of pensions, that is those received because of old age, disability, or death, including a financial aid for funeral services.

Based on an awareness of the real situation in the country, this draft law contemplates incentives to affiliation such as governmental financial assistance according to the socioeconomic situation of families, and it provides for a benefit up to 90% for families living in conditions of extreme vulnerability.

This is one of the most ambitious projects of the Citizen Revolution for the year 2015: for the first time in our history a group of people that has always been set aside and considered as a part of the economically inactive population has been finally recognized not just as made up of productive workers, but also as socially useful and contributing to the economic development of the country.

According to the results of the Unpaid Work Satellite Account, published by the National Statistics and Census Institute (NSCI), unpaid work in the home represents at least 15,41% of the GDP, that is 6,12 points more than the oil extraction percentage.

This mobilizing eagerness has undoubtedly generated great changes in the very structure of our country; however, there remain different challenges to face. Change processes need time to be assimilated, consolidated, and to support themselves. But, most of all, such processes require responsible citizens with a cheerful outlook on the perspectives for our country.

Cecilia Vaca Jones

Minister for the Coordination of Social Development

Cecilia Vaca Jones, Minister for the Coordination of Social Development since April 2013. She attended a Master course in Social Policies for the Sustainable Development of the Territory at the University of Bologna (Italy) and was later appointed to different executive charges in the Ministries of Education, Labour Relations, Economic and Social Inclusion, Knowledge and Human Talent. She has also been a university professor for over 10 years, researcher, and she dedicated most of her life to voluntary work.