In Ecuador, COVID-19 could cause 11 percent dive in GDP this year

Expanding access to Internet and basic services vital to recovery, UN-led study finds

October 5, 2020


Quito — Ecuador, the first Latin American country hit by COVID-19, was already struggling as a result of the global oil crisis and could now see GDP plunge 11 percent in this year, a new UN assessment has found, arguing that expanding basic services, Internet access, and digital technologies will play a vital role in helping this South American country recover stronger.

The pandemic struck hardest initially in the city of Guayaquil, capital of Guayas province on the Pacific coast. Among 11 Latin American and Caribbean countries that have reported data on historically vulnerable indigenous groups, the Pan-Amerian Health Organization (PAHO) has said Colombia had the largest increase in cases and Ecuador the biggest increase in deaths among their indigenous populations.

The report describes the human impact of the COVID-19 crisis as “severe, [and] tied to the implementation of sanitary and social distancing measures to contain the spread of the virus. This led to the total or partial shutdown of economic activities, affecting the economy and the daily life of Ecuadorians.” The country’s commerce, industry, tourism, transport, and health sectors have been hit hardest--and lost jobs and income could increase the number of families living in poverty and extreme poverty.

The ongoing global oil crisis had already worsened conditions in the region, which comprises nearly 15 percent of the world’s oil resources. Countries that depend on oil exports, including Ecuador, are especially vulnerable. COVID-19 stretched an already underfunded health system, and lockdown measures to contain it could mean that, after growing just 0.1 percent in 2019, Ecuador’s GDP could drop 11 percent this year, the report says.

Based on the Post-Disaster Needs Assessment (PDNA) methodology, this study analyzes COVID-19 incidence and national response from March to May in 16 sectors of the economy, clustered in four spheres: social, productive, infrastructure, and security. The report will inform the recovery strategy including policy and programmatic response to the pandemic.

PDNA is an international standard promoted under a tripartite agreement among the United Nations (UN), European Union (EU), and World Bank. UNDP acted as technical coordinator and adviser for the study, while UN agencies, the EU, and World Bank contributed with technical expertise in selected economic sectors, guided formulation of the recovery strategy, and contributed expertise to more than 100 officials from national government institutions to jointly conduct the assessment.

The COVID-19 PDNA for March-May 2020 registered losses in Ecuador of US$6.42 billion, or nearly 6 percent of Ecuador's nominal GDP for 2019. Preliminary needs focused on the social and productive sectors in the short-term total US$2.7 billion. To meet financing requirements, the EU earmarked US$10.6 million, the World Bank US$780 million, the Inter-American Development Bank (IDB) US$624.8 million, the Development the Bank of Latin America (CAF) US$300.4 million, and the United Nations US$74.3 million.

Imapact on women and girls

As in many other countries, women and girls are suffering in unique and specific ways.

Women constitute 60 percent of general health personnel and 81 percent of nurses are women in Ecuador, which means they are exposed to additional risk. Between March and May 2020, availability of essential sexual and reproductive health care services dropped 45-60 percent from a year earlier, and lockdowns have increased their care work and curbed their ability to report domestic and gender-based violence. Maternal mortality could increase by 50 percent and an additional 2,282 children under 5 could die absent scaled-up maternal and child interventions, the study finds.

Recommendations in the assessment include:

· Implementing and funding the National Health Emergency Management Plan that includes health promotion and disease prevention services, with an emphasis on child development, elderly people, and those with disabilities.

· Expanding the base and duration of social protection programmes for people living in poverty and extreme poverty.

· Ensuring the safe reopening of educational institutions and the right to education at all levels, while facilitating connectivity for urban and rural homes to guarantee continuity of quality education.

· Safeguarding Ecuador's cultural heritage, notably by protecting indigenous people.

· Injecting capital and fiscal aid, reducing tariffs and interest rates, promoting new commercial agreements, and diverisfying markets.

· Extending connectivity and strengthening digital commerce for the entire productive sector.

· Fortifying value chains for the recovery of the national market and boosting national consumption.

· Strengthening of the telecommunications network to expand connectivity and access to digital platforms to facilitate teleworking in all sectors, as well as access to health services, education and digital commerce.

· Ensuring sustainability and continuity of operations for provision of electricity, water and sanitation, and transport by guaranteeing the liquidity of these services.

· Promoting digital payment platforms that facilitate collection of service fees.

· Ensuring the continuity and quality of water and sanitation services in all essential institutions and in remote and marginal areas.

“The impact of the pandemic should be considered as an opportunity to transform the production model towards green growth and a circular economy where digitization will play a leading role in all areas,” the report says.

UNDP at the country level

In Ecuador, UNDP has helped establish Colaboratorio Ciudadano, a platform crowdsourcing citizens’ idea and connecting people working on similar projects. This peer-sharing platform has disseminated recipes for homemade disinfectants and patterns for sewing facemasks, and it has begun mapping the most vulnerable families to facilitate food deliveries to them. UNDP’s Accelerator Lab in Ecuador is also mapping and crowdsourcing local responses.

UNDP has provided personal protective equipment (PPE) to hospital staff in the western porvinces of Bolivar and Machala, as well as to farmers. It has also helped provide PPE to indigenous communities in the Amazon—Cofan, Sionas, Kchwa, Shuar, and Achuar—and procured chlorine for water treatment and cleaning and disinfecting health facilities.

UNDP has also expanded Chatbot tools that use artificial intelligence to guide citizens seeking information about the pandemic and implemented a remote assistance package for small enterprises to help local markets and businesses adopt safer, digital business strategies. UNDP has further provided training and cash to local associations of informal seamstresses, reorienting their production to the manufacture of biosecurity suits.