THE LEGATUM PROSPERITY INDEX™ 2016

Bringing Prosperity to Life

Ecuador

Ranked 59th of 149

At a glance

Ranks

59 th on the Legatum
Prosperity Index™

72nd
103rd
83rd
75th
60th
84th
61st
75th
22nd

SUB-INDEX RANKINGS

In the Prosperity Sub-Index rankings, Ecuador performs best on Natural Environment and Health and scores lowest on the Business Environment sub-index.

Visit our Rankings table to see how Ecuador compares to other countries.

Prosperity Gap

The ‘Prosperity Gap’ takes a country's GDP and uses it as the yardstick to measure a nation's expected Prosperity Index ranking.

For a fourth year in a row, Ecuador has achieved a prosperity surplus, when only a decade ago it was in a solid deficit. While not a particularly large surplus when comparing it to some of its regional peers, turning a deficit into a surplus of any size is a strong performance.

Note:
In the chart above, each dot represents a country. The curve shows the general tendency with which prosperity increases as GDP per capita increases. If a country falls below the curve, then we can say that compared to all other countries, it is under-delivering prosperity for its citizens. Likewise, if a country rises above the curve, then we can say that it is over-delivering prosperity for its citizens. Learn more about the Prosperity Gap here.

Alternatively, have a look at the Prosperity Gap view on our Rankings table for a full list of countries and to see how each of them are performing on the various sub-indices.

Commentary

Rafael Correa’s victory in the 2006 Presidential Election can be seen to be a turning point for Ecuador; a country that spent much of the post Second World War twentieth century dipping in and out of recession, plagued by numerous Juntas and ineffective presidents, it needed a strong leader born out of a successful democratic election. Now in his third term, Correa, amongst other impressive feats, has overseen the drafting of a new constitution whilst also challenging creditors, attempting and succeeding to heavily reduce Ecuador’s national debt.

The effects of such a presidency can be seen across the Prosperity Index: Economic Quality, which was ranked 97th ten years ago, is now 72nd, and the Business Environment has improved twelve ranks to 103rd. Whilst progress in the latter appears to be small, it is worth noting that achieving improvement in both Economic Quality and Business Environment is a rare feat in itself in Latin America. Ecuador has achieved reductions in poverty at both the national and absolute lines and an almost doubling the effectiveness of anti-monopoly policy while additionally reducing redundancy costs (significantly: from 135.5 weeks of salary to less than 32) and increasing the ease of resolving insolvency. However, before making it seem as if Ecuador is powering ahead, it is worth noting that many of these improvements are in areas of very poor performance. The ease of resolving insolvency may have improved notably, but it is still classified as just 28.4 out of a possible 100.

Ecuador’s Health score as a percentage of Central and Latin America’s average Health score.
Ecuador has seen improvement across most of its sub-indices of prosperity apart from Health, which remains above the regional average but is in relative decline.

Health, along with Natural Environment, is the only sub-index to not improve its rank, falling thirteen ranks to 60th, due to rising obesity rates and diabetes prevalence that are rising faster than the global rates, as well as a rather substantial fall in immunisation rates. Offsetting this decline, however, is improvement elsewhere. Education has risen over the past decade from 94th to 75th, Safety & Security is now 84th when it was 102nd, as well as Personal Freedom and Social Capital, which both rose in the global rankings.

Ecuador’s ranking in Natural Environment has fallen ten places since 2007, but remains the highest rank in Latin America and satisfaction with efforts to preserve the environment have never been higher (70% up from 37% in 2007). Key indicators, like access to an improved water source, have also improved. However, Ecuador’s rank in this sub-index has risen due to failings in certain variables, and these must be noted; fishstocks that are collapsed or over-exploited has risen from 12% to over 47% in a decade, and the percentage of population exposed to air pollution about WHO guidelines is now double what it was in 2007. This is certainly a sub-index to be watched with caution over the coming years.


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Data

How to read this graph:
When comparing multiple countries on a spider chart, data points that appear
further away from the center represent a better performance to the points that are closer to the center.