References: Ley de Modernización del Estado, Privatizaciones y Prestación de Servicios Públicos por parte de la Iniciativa Privada Capítulo V de la Desmonopolización, Delegación de Servicios Públicos a la Iniciativa Privada y Privatización Art. 41

References: Constitución de la República del Ecuador, Título V de las Instituciones del Estado y la Función Pública Capítulo 2 de la Función Pública Art. 123

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References: Ley de Transparencia y Acceso a la Información Pública

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Peer Review Comments: Over the last twenty years, Ecuador has not privatized a single enterprise. This is why the country remains backward and underdeveloped. And prospects for the Correa government changing the situation are dim. For the next twenty years, Ecuador will continue to be a backward economy with almost no hope of rising out of its poverty. With Correa in power while Heinz Dieterich acts as his communist mentor, the country prospects are worse.

An examination of the relationship between trade and financial globalization and the rise in inequality in most countries in recent decades shows that technological progress has a greater impact than does globalization on inequality and the reduction of corruption. Ecuador generates no technological progress, and no progress in politics or anti-corruption. Its human capital base is of low quality when compared to other countries. Therefore, there is a greater propensity for inequality within (Ecuador) when compared to her neighbors, in addition to rising levels of corruption.

The limited overall impact of globalization reflects two offsetting tendencies: whereas trade globalization is associated with a reduction in inequality -- and Ecuador's Correa does not believe in free trade agreements -- financial globalization (including foreign direct investment [FDI], in particular) is associated with an increase in inequality among nations. In 2008, Ecuador will receive an insignificant amount of foreign direct investment (est. at US$150 million) relative to her neighbors whose share of FDI stands at about US$7,000 million- US$8,000 million each. In this sense,Colombia's & Peru's economic rate of growth will outstrip Ecuador's insignificant growth rate (which, at most, will be 1.5 to 2 percent).

Both globalization & technological changes increase the returns on human capital (and also reduces corruption), underscoring the importance of education and training in both developed and developing countries in addressing rising inequality. The low human K index in Ecuador indicates that economic perspectives therein are poor indeed. Add to this an inefficient, ineffective, and corrupt leftist government and you have the ingredients for massive failure in the delivery of much needed economic reforms so that the country can prosper with ease into the 21st century at growth rates that are satisfactory by international standards.

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