Ecuador's Economy: A Domestic and Business Overview - Essay Sample

Introduction

The economic profile of Ecuador is majorly based on agriculture, mining, and fishing. The extraction and exportation of oil to other countries has played a significant role in shaping the economic status of Ecuador in the early 1970s (Beck, Demirguc-Kunt, & Levine, 2010). In recent years, the economy of Ecuador has depended on the exportation of bananas and cocoa. This paper provides succinct information on the essential domestic and business statistic of the Ecuadorian economy

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Exposition of the Basic Domestic and Business Statistic of Ecuadorian

According to world economic research conducted in South American content, Ecuador is the leading exporter of cocoa and bananas to global markets. Also, Ecuador has sufficient petroleum resources which accounts to 40 percent of total income obtained from the exports made by the country (Beck, Demirguc-Kunt, & Levine, 2010). The income from the exportation of petroleum products also contributes 25 percent of the government revenues (Vallejo, 2010). The fluctuation of the prices in the global markets has a lot of devastating impacts on the domestic economic growth in Ecuador.

Despite the ability of the Ecuadorian government to improve welfare and social conditions, the country also faces a lot of economic challenges. The first exposition of financial problems includes low productivity that affects the nature of growth. Businesses and entrepreneurs operating in Ecuador face a lot of bureaucratic challenges and regulations that restrict organizations; therefore, affecting economic growth in the country. According to the World Bank's statistic, the Ecuadorian economy is ranked 117 in the world (Vallejo, 2010). The regulatory policies that restrict the exit and entry of products have undermined economic growth and overall competitiveness in the global markets. Informal businesses represent 30 percent of the Ecuadorian economy (Beck, Demirguc-Kunt, & Levine, 2010). Out of the total informal business activities in Ecuador, 90 percent are non-tradable; therefore, affecting the economic growth in the country (Vallejo, 2010).

Conclusion

To conclude the economic profile of Ecuador is based on the natural resources like mining of petroleum products and fishing. Ecuador depends a lot on agricultural products for exportation; therefore, fluctuation of prices in the world markets might affect the economy of the country. Ecuador experiences favorable climatic conditions that support farming activities.

References

Beck, T., Demirguc-Kunt, A., & Levine, R. (2010). Financial Institutions and Markets across Countries and Over Time: The Updated Financial Development and Structure Database. The World Bank Economic Review, 24(1), 77-92. Retrieved from: https://academic.oup.com/wber/article-abstract/24/1/77/1735383

Vallejo, M. C. (2010). Biophysical Structure of the Ecuadorian Economy, Foreign Trade, and Policy Implications. Ecological Economics, 70(2), 159-169. Retrieved from: https://www.sciencedirect.com/science/article/pii/S0921800910001011