USAID/Ecuador
Results Report 2006
February 2007

Northern Border
During FY 2006 the Northern Border program helped an additional 170,000 people with access to potable water, sanitation, roads, bridges, jobs and higher incomes.  114,000 people got access to new or improved potable water.  Eighteen new water systems were constructed; 15 sanitation systems were built/repaired; and 15 new bridges were constructed.  Since 2001, the program has financed 104 water systems, 34 sewage systems, 112 kilometers of roads, 60 bridges, 9 irrigation systems, and improved incomes for 12,000 people, benefiting over 400,000 people.
 
USAID is also documenting the health impacts of these infrastructure improvements.  A 2006 survey that compared health statistics from 2002 to 2005 in nine northern border communities where USAID financed water and sewer improvements showed dramatic decreases in the incidence of parasitosis, skin, and diarrheal diseases.  In the village of Mataje, for example, parasitosis decreased from 437.5 to 122.6 cases per thousand and diarrheal diseases decreased from 333.3 to 233 cases per thousand.  Similar results were noted in the town of Jambelí.  There parasitosis decreased from 340.4 to 76.9 cases and diarrheal diseases from 96.7 to 6.4 cases per thousand.  In the town of General Farfan, the incidence of dermatitis decreased from 172.9 to 21.7 cases per thousand. 

As a counterbalance to the offer of lucrative jobs in selling precursor chemicals, coca harvesting, processing and drug trafficking, USAID has successfully promoted licit productive activities.  3,232 new full time jobs were created in the Northern Border in 2006.  In addition to these new jobs, nearly 5,000 additional farm families increased their income because of USAID financed assistance through improved farm and post-harvest practices and identifying marketing channels which linked farmers directly to buyers/exporters.  In 2006, about 3,900 new cacao farmers increased their income from $687 to $973; 1,223 coffee farmers increased their income from $613 to $929; 73 broccoli farmers’ income increased from $1,731 to $3,114 and the avocado growers’ income increased from $6,883 to $11,600.  5,000 cacao and coffee farmers received agricultural and financial training and more than 30 farmers’ organizations were strengthened.  Approximately 500 farmers are completing basic training on cocoa farming and post-harvest technologies through the highly successful Farmers Field Schools. 

12,000 new hectares of cacao and coffee trees were planted in 2006 as a result of this program. And over the past three years, over 26,600 hectares of cacao and coffee trees have been planted. Approximately 2,500 coffee producers from the NB Amazonian provinces now export Robusta beans to Colombia and in 2006, Arabica coffee was exported from Imbabura to Japan.

Of particular note was the success of the innovative Northern Border public outreach/communications campaign, known as “Juntos”.  In addition to the many radio and TV spots produced and aired in 2005, in 2006 the campaign produced twelve 2-minute mini-documentaries which were aired on leading news programs.  “Juntos” also benefited from an estimated $300,000 in free air time through GOE-paid TV spots during the World Cup finals and a GOE funded 10-minute “cadena nacional” special which aired in October.   A partnership was established with the TV network that has the largest audience in the Northern Border for free air time of at least 24 2-minute TV spots about USAID-funded Northern Border activities.

The USAID funded ‘Juntos’ campaign gained international recognition in 2006.  The campaign won first prize among government and NGO submissions in the prestigious League of American Communication Professionals competition.  Of all of the 400 entries, including entries from name brand, multi-national companies like Wal-Mart that spend millions on advertising, the ‘Juntos’ campaign came in 20th  in the overall competition.

Democracy
Every two years since 2001, USAID funds a national public opinion survey to determine whether support for democracy has increased among the general public, or not.  In 2006, USAID published and disseminated its third National Democratic Values Survey.  The 2006 survey showed that Ecuadorians continue to have more trust in municipalities than in central government institutions.  47.3% of Ecuadorians had confidence in municipalities versus 16.7% in Congress, 21.7% in the national government and 24.7% in the Courts.   Surpassing trust in municipalities, 48.1% of Ecuadorians trust the USAID supported NGO Citizen Participation (Participacion Ciudadana).  Approximately 500 Ecuadorians and eight local universities sponsored seminars to disseminate the results of this survey. 

In 2006, USAID funded election observation efforts by several civil society organizations.  Their efforts contributed to free, fair, transparent, and inclusive elections.  Both the Organization of American States and the USAID-supported Ecuadorian watchdog group, Participación Ciudadana (PC), declared the elections free, fair and inclusive.  With financial support mainly from USAID, PC was able to develop a national public awareness campaign to promote responsible and informed voting.  It also monitored campaign spending by the candidates, implemented a national survey on satisfaction with the electoral process, and established an electronic news system linked to major international media outlets.  Over 3,000 volunteers worked with PC to observe the October/November elections.  PC developed and conducted a quick count in the first and second rounds with a margin of error of only +/-0.08%. 

In the second round, when the Ecuadorian Electoral Tribunal was unable to conduct its own quick count, PC’s ability to conduct a credible and ‘quick’ count was instrumental in gaining public acceptance of and agreement with the elections results.

In addition to PC, USAID also funded election observation by indigenous groups who fielded 186 observers that covered 524 polls in six provinces where most indigenous people live.

After a three year struggle, in March 2006, Congress passed and the President signed, a law limiting campaign spending.  The law contained various articles that PC has proposed and promoted since 2004.

Despite the fact that Ecuador experienced judicial crises in 2005 when the Supreme Court was dissolved by President Gutierrez, the 2006 Democratic Values Survey (DVS) showed a slight increase in citizen’s trust in the justice system, from 21.6% in 2004 to 24.6% in 2006.  One reason why judicial legitimacy may have increased, despite turmoil at the central government level, is due to USAID efforts to promote access to justice at the local level.

In 2006, with USAID support, 1,766 indigenous persons received legal defense and another 1,539 were provided legal counsel in eight cities.  The legal aid centers supported by USAID had a 60% case resolution rate.  In only six months, more than 500 innocent persons were released from jail.  The legal aid was also very cost effective—it cost on average only $150 per client. 

In 2006 USAID contributed to the discussion, dissemination and increased public awareness about the need for a Public Defender Law.  In part, as a result of these efforts, Congress passed a Public Defense Law in November 2006, but it was subsequently vetoed by the President.
 
Application of the new Criminal Procedures Code was evaluated in 2006 in three cities which account for more than 60% of all criminal cases in the country.  The evaluation showed that 89% of trial hearings in Guayaquil were not completed in 2005 for various reasons, including the lack of coordination in scheduling trials.  In response to this finding, the National Judicial Council assigned staff to coordinate scheduling pre-trial and trial hearings in Guayaquil. 

The National Justice Sector NGO Network played an important role in the oversight of judicial performance.  With USAID assistance, four new local Citizen Oversight Groups were established in 2006 in Ibarra, Manta, Azogues and Guayaquil. 34 organizations, including universities, NGOs, and a local Chamber of Commerce, monitor five measures of justice performance, including access, transparency and objectivity. In September 2006, the Network’s public statements regarding a corruption scandal influenced the Supreme Court’s decision to dismiss three of its judges.

In 2006, over 30 workshops trained more than 700 officials on public defense and human rights.  Thirty lawyers trained with USAID support in five southern provinces were trained as trainers to improve the application of criminal procedures.  They, in turn, trained over 320 lawyers; a process that is now being replicated through bar associations in other provinces.

As a result of USAID´s local government strengthening project, 39 local governments now carry out participatory planning processes, surpassing the target of 25.  41 local governments have improved delivery of basic services, also surpassing the planned target of 25.  Finally, 36 local governments improved transparency, accountability and citizen oversight.   Eight municipalities issued ordinances re-organizing management systems to permit the assumption of newly transferred responsibilities and to increase their own-source revenues and 30 parish (district) governments were trained in public management. 

In 2006, with USAID assistance, 173 local government leaders received post graduate degrees through Ecuador’s first municipal management program offered in four universities.  The program trains municipal managers in subjects including local government planning, organizational development, human resource management, and conflict and mediation. 

There are many improved municipal management practices as a result of USAID assistance.  In San Lorenzo--a northern town bordering Colombia—from 2004-2006, the city increased its garbage collection from 60% to 83% and relocated its landfill outside the city limits.  In the Municipality of Esmeraldas, with USAID support, the mayor responded to citizen priorities and built a sanitary slaughterhouse--completed in July 2006. When opposition politicians complained that the more efficient slaughterhouse did not create new jobs nor feed the hungry, the municipality organized—with minimal USAID support—a micro-enterprise to create jobs around leather processing and fertilizer, using the bi-products from the slaughterhouse. 

Economic Growth and Poverty Reduction
There are over a million micro-enterprises in Ecuador.  Roughly a million people work in micro-enterprises, nearly 25% of the urban workforce. Although a typical micro-enterprise’s sales are only $778 per month, they account for 26% of Ecuador’s GDP.  Most of these entrepreneurs are in the informal sector, and live in urban centers.  Microenterprises need credit to grow.  Despite that many are first time borrowers, arrears of microcredit clients paying full market rates have averaged only 4.5%.  
Helping micro-enterprises to grow reduces poverty and increases economic growth.  Thanks in large part to USAID assistance.  Ecuador has the fastest growing microfinance sector in Latin America.  From December 2001 to September 2006, the number of clients who received micro loans through USAID-funded programs increased from 81,294 to 360,050, a 343% increase.  Fifty-four percent of the clients were women.  The loan portfolio also grew, from $67 million in December 2001 to $631 million in September 2006, an increase of 838%.  The number of offices offering micro-credit increased just as rapidly, from 26 to 252, making micro credit more accessible to literally millions of poor Ecuadorians.  The financial institutions maintained their base of small entrepreneurs throughout this dramatic growth, with average loans around $1,600. 

Significant gains continued in 2006: the number of micro borrowers grew by 10.5%, reaching a total of 435,892 clients who have benefited from USAID assistance. The total loan portfolio also grew 29.4% to $809 million.  A USAID program with credit unions to facilitate remittances grew 221% in 2006 alone.

During 2006, technical assistance to the Superintendent of Banks and Insurance  focused on transparency standards, insurance reserves, and strategic planning.  As a result of this assistance, the insurance industry increased their equity and capital base by nearly $30 million and a strategic plan is being implemented to modernize banking standards in compliance with the Basel Accords.  We expect the transparency norms will be approved by the Banking Board in 2007.

The Transfer Pricing Unit established in the Internal Revenue Service of Ecuador in 2006 now analyzes corporate income taxes.  Improved enforcement and profiling of likely tax evaders increased corporate income tax collection by $15 million. 

In 2006 new human resource management systems were implemented in the Minister of Economy and Finance, including a personnel registry and an employee evaluation system, establishing an efficient and objective personnel management system.

In 2006, over 20 workshops were held for economic analysts and business groups to discuss the need for responsible fiscal management and structural reforms.

To help harmonize regulations, legislation and practices with WTO conventions that Ecuador has already signed, USAID helped prepare draft sanitary/phytosanitary laws to ensure sanitary standards for animal and vegetable products and worked with the private sector to develop best-practice manuals for poultry and cacao production.  USAID also helped Ministry of Commerce to conduct more than 130 workshops around the country to discuss the benefits of free trade, prepare a technical assessment of the effects of signing or not signing an FTA, and held 50 workshops for Congress on trade issues.

At the micro level, USAID helped increase competitiveness in the leather industry by bringing buyers and sellers together.  In Cuenca, in just three months, technical assistance to a leather cluster increased productivity by 300% in the production of hats and by 525% in the production of handbags, creating 122 new jobs and bringing 32 new micro firms into the cluster.

PRODUCTIVITY INCREASE IN HATS AND HANDBAGS

Products Initial Productivity Actual Productivity Productivity
Hats 8 units per person/machine per day 32 units per person/machine per day  + 300%
Handbags 4 units per person/machine per day 25 units per person/machine per day + 525%

Environment
In Ecuador, USAID is working to ensure the effective management of over 2,126,966 hectares of protected areas, equivalent to 7.5% of Ecuador’s total area or an area roughly the size of the state of New Hampshire.  By the end of 2006, 1,209,283 hectares were under effective management. 

Galapagos.  In 2006, USAID supported the installation of 80 zoning markers (visible two miles out to sea around the entire 1,800 kilometer coast of Galapagos) and of 10 mooring buoys at popular dive sites.  These improvements are part of a larger effort to encourage government, fishermen, residents and tour operators to jointly and sustainably manage the Galapagos.  During the last three years, USAID technical assistance and training to support participatory management of the islands by all stakeholders helped reduce the number of costly and disruptive strikes from 7 in 2004 to zero in 2006.  Another important decision made through this new management system was to prohibit fishing of the severely depleted sea cucumber for two years. 

An important USAID objective is to help create sustainable economic alternatives for people who live in the Galapagos.  In 2006, USAID financed a fish processing center, whose sales have grown to 1,200 pounds per month, and a smoked fish business managed by fishermen’s wives which has increased production from 25 to 600 pounds per month. 

Tropical Andes.  In 2006, USAID helped improve the management of 830,000 hectares of parks and protected areas that provide 70% of Quito’s drinking water.  A key partner in this effort is Quito’s Water Protection Fund (FONAG), which was created with USAID support.  In 2006, FONAG planted 300,000 native trees to stabilize watersheds, began a program to fully fund community park-guards to engage communities in watershed conservation, and supported primary education on the importance of water and its conservation for 120 schools and 5,600 children.

In 2006, USAID also supported the creation of a system of 110 park guards who actively patrol and provide extension services and environmental education to conserve 715,836 hectares of land in the Cayambe Coca and Antisana Reserves.  USAID has also partnered with 120 families to successfully resolve land tenure conflicts along 83 contested kilometers of the park perimeter.

USAID’s partners worked with local communities in 2006 to improve watershed and wildlife management, to create Ecuador’s first protected area under its new decentralization law (100,000 hectares in Napo Province).  In addition, management agreements with farmers reduced to zero the number of cattle attacked by the globally threatened Spectacled Bear (down from over 60 attacks in 2004).  Finally, in 2006, Ecuador’s first-ever RAMSAR site (for internationally important wetlands) was established in the Condor Bioreserve. 

Indigenous Groups. As stewards of one fifth of Ecuador’s territory, indigenous groups are key allies in conservation.  During 2006, USAID helped bring 310,776 hectares in northern Ecuador under improved natural resources management (for a total of 658,212 hectares of Indigenous lands) and trained 1,588 people in resource management and conservation.  Given the importance of secure land tenure, a particular success was the legal titling of 99,000 hectares of Awa land that lies between Colombia and the Pacific Ocean. 

Perhaps the most vulnerable of all indigenous peoples are the uncontacted groups that live around oil-rich areas of the Waorani territory in the Amazon basin.  The Waorani control one of the largest (790,000 hectares) and most strategically important blocks of Amazonian forest.  USAID support enabled a three-way land-swap involving the Ecuadorian Ministry of Environment, Ministry of Energy and Mines, private oil firms, and the Waorani, to allow these people to continue to live in isolation in a 760,000 hectare “intangible zone.”  In 2006, with USAID support, the Waorani also developed a 20-year “Life Plan” for education, health, employment, and development, in consultation with dozens of remote communities, oil companies, NGOs, the Ministry of Environment and the Ministry of Energy and Mines.

USAID’s programs with the Cofan, in north-central Ecuador, resulted in community park guards patrolling 380,000 hectares of their ancestral territory and the acquisition of 10,000 hectares of ancestral territories for conservation.  With USAID support, Chachi forest guards also now successfully patrol 30,000 hectares of the Gran Reserva Chachi and three Chachi communities are receiving annual payments for environmental services. 

USAID helped more than 30 local and indigenous organizations strengthen their capacity to leverage funding.  During 2005-2006 these organizations contributed $1,727,344 to more than match USAID’s investment of $1,377,640.  Six indigenous organizations obtained $1,256,668 (including $800,000 from the oil company Repsol for the Waorani Federation).  To date, four of these eight organizations are self-sufficient and the others are more than 67% self-sufficient. 

Southern Border
The Southern Border program was established to support the Peru-Ecuador peace accords of 1998.  Since this program began in 2001, 489,317 people have benefited from the construction of 104 water systems, over 4,000 latrines, 27 improved municipal garbage collection and recycling systems, and 161,512 hectares of indigenous land are now under improved natural resource management plans.

In 2006, the program benefited over 14,000 people with improved water, sanitation, and solid waste systems, and improved the capacity of 26 local governments to respond to citizens’ needs through new mechanisms for consultation and better service delivery.  An additional 31,000 hectares of indigenous lands were legally titled to the Shuar tribe in 2006, and sustainable resource management plans now cover an additional 12,000 hectares.

Trafficking in Persons (TIP)
In June, 2006, Ecuador moved from Tier 3 to Tier 2 in the State Department’s Sixth Annual Trafficking in Person’s Report as a result of clear progress in prevention, protection, and prosecution. The First Lady of Ecuador, Maria Beatriz Paret de Palacio was selected as one of ten heroes acting to end modern-slavery, and Ecuador was one of two international best practices highlighted by the TIP office of the US State Department for Ecuador’s use of popular culture and public transportation to spread anti-trafficking messages. 

Since the release of the TIP report, Ecuador has not rested on its laurels. From March – December 2006, at least 75 TIP arrests have been made and are now in some stage of investigation/prosecution.  In September, the GOE won its first TIP conviction, sentencing one person to 12 years in prison, the first conviction under the new June 2005 anti-TIP criminal law.  Two other major cases are underway in Pichincha and two in El Oro. 

In August, President Palacio signed Executive Decree No. 1823, declaring TIP a national political priority and adopted a National Plan to fight trafficking in persons, alien smuggling, labor, sexual and other forms of exploitation, prostitution of minors and adolescents, child pornography and corruption of minors. 

On December 13 Ecuador launched its ‘Call and Live’ TIP hotline. , The “Call and Live” campaign is a result of a partnership with the Inter-American Development Bank (IDB), the Ricky Martin Foundation (RMF), the Ministry of Foreign Affairs (MFA), the National Institute for Child and Family (INNFA), the International Organization for Migration (IOM) and USAID.  USAID, via the International Organization for Migration (IOM) provided an initial US $100,000 to launch the campaign and the Inter-American Development Bank (IDB) will provide $40,000.

Also in December, 2006, USAID/Ecuador received an additional $250,000 from the Women in Development office from USAID/Washington to fund TIP shelters.

Inclusive Development 
USAID received $375,000 in additional funds from Washington to fund a Persons with Disabilities (PWD) program through FENEDIF.  FENEDIF represents the five national federations of people with disabilities (FENEDIF, FENCE, FENASEC, FENODIS and FEPAPDEM). The program is designed to promote PWD participation in the November, 2006 elections and implementation of a job placement service for PWD. 

In terms of the participation of PWD in the elections, the FENEDIF nationwide publicity campaign resulted in 18 TV and 3 radio news stories and 14 newspaper articles explaining the political rights of PWD.  USAID also funded the printing of 24,000 Braille ballots, which were distributed to all polling sites.  FENEDIF conducted training for its association members in all 22 provinces and reached an estimated 50,000 PWDs through public awareness materials.  FENEDIF also sensitized an estimated 100,000 members of the Electoral Tribunal, military and police on PWD rights and how they could assist PWDs to access their polling stations and vote.  In the second round of voting, all 36,000 polling stations completed a survey which will provide FENEDIF and the GOE with information on how many persons with disabilities voted at each polling station, whether the polling station was accessible, and if not, what were the major physical impediments. 

Although full voting results will not be available until February, anecdotal evidence indicates that many more PWDs voted in this election than in previous elections and that the number of PWDs who voted increased between the first and second rounds.  Data from just a few polls that were monitored in Quito show that in the first round, 120 PWDs voted, but in the second round, the number of PWDs that voted jumped to 718.

In December 2006, the National Federation for Persons with Disabilities (FENEDIF) received a $105,935 grant from Microsoft ($30,000 cash and $75,935 in Microsoft software and copies of requested Microsoft curriculum).  This FENEDIF/Microsoft partnership complements a USAID program to establish 10 telecenters to increase access to global communications for the rural poor. The FENEDIF/Microsoft program will equip five of these rural telecenters with appropriate technology so persons with disabilities (PWD) can use the telecenters and benefit from information technology training.

Disaster  Assistance
When responding to disasters, time is of the essence.  USAID/Ecuador and USAID/OFDA moved quickly in 2006 to help victims of two disasters.  In February, USAID provided $50,000 worth of water purification equipment which benefited 5,400 flood victims in Guayas and Los Ríos Provinces.

USAID also responded to the eruption of the Tungurahua Volcano in August.  Within two days of the eruption, USAID staff were in Tungurahua assessing victims’ needs.  USAID provided $50,000 of basic hygiene and safety kits to 1,000 families, animal feed for 25,995 farm animals belonging to 1,246 families, and provided $72,000 worth of vital seismological monitoring equipment.  Long-standing support from USAID for Ecuador’s early warning systems saved hundreds of lives in the eruption.