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EXTERNAL DEBT & OIL BOOM
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External debt
and Oil Boom in Ecuador
What is it?
Debt due to a loan between a nation and a foreign bank or institution.
=
Loans
Why loans?
- Economic growth
- Budget deficit
Growth
In 1970 Ecuador had experienced great changes. The birth of the main cities
The working class emerged.
Exports diversified
1970
1972
Military dictatorship
- (Guillermo Rodriguez) overthrew Velasco Ibarra.
6 months after assuming power, the oil exploitation and export began
Dictator
Oil boom
1973
GDP (Gross Domestic Product) = PIB in (Spanish) had a growth of 24%.
This growth was only that year.
That has been the only year in the Ecuadorian history that has grown in that way :(
43%
In 1975 43% of the budget was destined to the payment of the debt that Ecuador had with the creditors
Creditors
USA and Great Britain
The disaster
Risks
Rodriguez Lara was in the power for 5 years and his military dictatorship left a debt of 3 billion.
Oil Boom
It was a "way out" of Ecuadorian problems
Oil Boom
Exit
The oil boom caused the international banks to grant large amounts of money based on the price of oil.
Loans
The problems started
The loans granted to the public and private sectors created an economic boom that was misused and stolen (CORRUPTION)
Today, Ecuador is a bankrupt state
No solution
Ecuador owes a total of 16 countries, the main creditors of this debt are China, USA and the United Kingdom.