Ecuador spent US$700mn on earthquake reconstruction

- Tuesday, October 18, 2016

Ecuador spent US$700mn on earthquake reconstruction

Ecuador has invested about half of its reconstruction budget in the six months since an earthquake killed 668 people, left 30,000 homeless and caused US$3.3bn in damage in April.

President Rafael Correa's government has spent US$721mn of US$1.499bn allocated to an infrastructure reconstruction effort in the coastal provinces of Esmeraldas and Manabí that were devastated by a 7.8 earthquake on April 16.

Start your 15 day free trial now!


Already a subscriber? Please, login

The funds were assigned to health and education infrastructure, roads and housing in the two provinces, in addition to US$115mn in loans to reactivate 6,000 businesses, according to government newspaper El Ciudadano.

The government has repaired nine health centers and is building five new ones, while 8,000 families have moved back into their repaired homes and over 35,000 homes are being rebuilt after the government handed out 44,000 housing repair and reconstruction loans. About 55,000 students have also been able to resume classes after the government built 26 provisional schools, according to the daily.

Repairs have been completed on 20 stretches of highway and a bridge, while work is ongoing on six other roads and a bridge over the Jama River. About 85% of the debris has been removed and 8,000 damaged buildings have been demolished.

Other infrastructure projects include 11 potable and sewerage projects for 563,000 inhabitants of eight towns, while work is also ongoing on a power substation for the Portoviejo hospital.

However, around 7,000 people are still living in 24 shelters in the region, while 40,000 families are still receiving food donations.

Ecuador, which depends on crude oil for around half of its national budget, was already struggling to meet its investment goals after oil prices slumped, badly undermining government revenue.

Private investment has fallen in Ecuador since Correa, who was re-elected to a third straight term in 2013, nationalized the oil industry, scrapped the 1998 constitution and closed down media outlets in a bid to strengthen state control over the economy.

Ecuador has signed a total US$7bn in Chinese state loans out of the country's total US$38bn debt after selling 40% of the country's future crude oil output to China, President Correa said. Ecuador's debt is equivalent to 38% of GDP.

"Every developing country has to go into debt," Correa told Ecuadorian television Teleamazonas. "We need financing."


Ecuador, whose US$70bn economy is expected to contract 1.7% this year, saw unemployment rise to 5.2% through September, up from 4.3% a year earlier, according to national statistics institute INEC. The agency estimated the number of unemployed in the country at 420,000 of the total 16.5mn population.

Underemployment, where workers receive less than minimum wage and work less than an eight hour day, rose to 19.4% through September, up from 14% a year ago, the agency said in a statement.

The country's exports, which also include tuna, shrimp, bananas and flowers, are set to drop 8.2% this year, while imports will plunge 21.2%, according to the country's central bank.