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Edition: Aug 1 - Aug 14, 2004
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Reservoirs of Potential: Economic Alternatives to Oil Dependency
(page 2 of 2)
 
By Luis Yerovi Jr.

The public relation's nightmare created by the oil duct's possible effect on the environment and on native people will cause an uproar, which will serve to delay and complicate any investment made in the oil duct. Indigenous peoples, organized and united by their threatened autonomy and livelihood, will find allies in an awakening and skeptical middle class to oppose the plan. Pesky, determined and passionate environmentalists will continue to recruit support against the OCP. An inquiring international media will be there to make the process more transparent to the chagrin of government officials. Youth, fueled by a want for change and a desire to be driven, will support and continue the protest movement, already having vowed to tie themselves to trees which lie in the path of the bulldozers.

The investment in the OCP is not the most correct one, even on strict economic principles. The OCP's endeavor, made in the name of providing jobs and economic opportunity for "the people", will lead to an increase in the disparity between rich and poor. Of the 1.2 billion dollars intended as an initial investment by the banks, only half actually goes to Ecuador. The bulk of the money will go to foreign companies who have the capability of supplying the equipment, material and expertise needed to build the duct. Already, small business entities in Ecuador are wondering exactly what their services will consist of and, as of now, have not been given specific contracts to execute. Of the money that remains in Ecuador, a large part will be distributed to a limited sector of the economy, namely the road engineering, construction and heavy transport industries (i.e. the trucker's union). Even within these industries, given that the work wages in Ecuador are minimal, the "bosses", and not the workers, will reap a disproportionate lion's share of the money.

Given the above, it is apparent that that an investment in the OCP's plan for Ecuador is not an environmentally, politically and economically sound one, even if the prize is the black gold we call oil.

Alternatively, that same 1.1 billion dollars can be invested in a more conscientious manner by putting it towards improvements in Ecuador's educational system, tourism infrastructure and agricultural output. A maximization of these three spheres will bring about an egalitarian distribution of wealth and a more prolonged, sustainable return than the "sugar rush" anticipated by the influx of oil money.

Education remains the only method which has been demonstrated to maximize the economic benefits of open markets. Improvements in education will allow for a more widespread distribution of the benefits from an increasingly global market. With an education, the working class is able to exercise greater economic autonomy, as they acquire skills and knowledge which render them more readily employable. The resulting increase in an educated work force will encourage international companies to utilize Ecuador as a country where they can set up businesses. Such foreign interests and investments will create a myriad of jobs and opportunities for those who could not otherwise have found employment in Ecuador's current limited job market. This increase in job prospects will have the benefit of preserving family structure, as the heads of households will no longer be compelled to leave Ecuador (legally or illegally) to find employment.

A resulting increase in average income among Ecuadorians will increase the spending power, and money can be put back into the economy at a steady rate. Further, educated workers could have an increased ability and flexibility to respond to, exchange and initiate changes and insights garnered from market patterns and technological advances. Innovation and entrepeneuralism, two principal factors for a sustainable economic model, would result and the money invested in education would continue to generate dividends across generations.

Tourism ranks amongst the top five industries worldwide. Billions of dollars are spent yearly on travel. Countries, such as Spain, Italy and Costa Rica, live mainly off the economic return of tourism. Except for the famed Galapagos Islands, the potential for tourism in Ecuador has not yet been tapped into. This relatively untouched market is filled with opportunities. Just for starters, the impressive cultural diversity and incredible micro-habitats that characterize Ecuador's landscape from the Amazon jungle to the Andes and to the Pacific Coast could serve as a national monument to an enormous tourist clientele. This natural tourist attraction would require a minimal economic investment and would contribute to an economic boom.

Take, for example, the small picturesque villages which sit high in the Andes. In a world becoming more Westernized and homogenous, the value of maintaining their uniqueness is enormous. These villages could open hostels, cafes with unique themes, markets which sell handmade crafts, all of which would bring in capital in a manner that would be sustainable and compatible with the needs of inhabitants. More available money would facilitate the modification of current infrastructure, including the building of safer roads, improvements in sanitation (i.e. water cleanliness) and making more comprehensive efforts towards maintaining security. These alterations not only promote tourism but improve quality of life, morale and cultural pride among the village people. Such changes would enable the inhabitants to become active contributors to their future and, thus, to the over-all benefit of Ecuador.

Improvements would not be limited to the villages, as large metropolitan cities could benefit economically from infrastructure modifications brought about by a tourism culture. The mere addition of one extra day to a tourist's average length of stay in Quito would translate into a significant increase (tens of millions of dollars) in revenue for the city. This money, reinvested, could support the expansion of Ecuadorian art and entertainment, for the enjoyment of tourists and citizens alike, through the building and renovation of museums, craft studios, hotels, restaurants and theaters.

The economic and social benefits of tourism should be complemented and further perpetuated by improvements in agriculture and aquaculture, allowing for the production and export of high quality produce at a faster rate. Ecuador is blessed with a fertile terrain of volcanic soil-lined valleys and a temperate climate, both of which are ideal for year-round crop development. Though crops like banana, coffee and industries that produce shrimp are already generating a significant income, more can be done with them and in a more environmentally friendly way. In addition, renewed efforts should be concentrated on non-traditional crops such as hearts of palm, sugarcane and organically grown produce.

The potential of agriculture remains largely unrealized due to unorganized plans of development and a lacking technological partnership. Infusions of technology and skills would maximize the output of Ecuador's lands, including the rational exploitation of its forests.

In sum, the above proposal for the betterment of educational, tourist and agricultural spheres in Ecuador is a win-win situation for Ecuador and the international banks. The investment intended for OCP's oil duct plans should be reconsidered by the banks, in order to maximize the possibilities of an economic and social gain that is not made at the expense of irreversible environmental loss.

Through an economic plan that includes all sectors of society, Ecuadorians will witness a drop in unemployment and crime accompanied with a healthy, productive rise in morale, personal pride and cultural confidence. The government benefits from the general feelings of contentment among its citizens, and does not have to exert efforts towards squelching dissent against its policies. Further, the government will be able to repay the loans given by the world banks through an increased revenue created by revised taxation plans accommodating the rising economic status of the country. Once the debt has been repaid, an infrastructure and a diverse natural environment will remain intact, ensuring continued growth of the Ecuadorian economy and inviting future investments.

While these plans appeal to the most common of senses, their actualization will require a prolonged and intensive reconstruction of the tainted values we have inherited as a country with a marred history of colonialism and corrupt regimes. In order to guarantee the viability of these investments, emphasis needs to be placed on developing powerful and respected democratic institutions- an impartial judiciary, a free media and officials who are receptive to voters' concerns.


 
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