Extent to Which Economic and Social Impacts of Oil Extraction in Ecuador Converge to Ecuador's Inhaibitants and the Nation as a Whole
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Guiding Question: To what extent do economic and social impacts of oil extraction in Ecuador converge for Ecuador’s inhabitants and the nation as a whole?
The extraction and export of oil seemed a dependable escape plan out of accumulating debt throughout Ecuador’s tumultuous struggles following IMF structural adjustment programs in the 1970s and 1980s. Yet in the present day, high debt levels remain looming above Ecuador’s economy and the smudges of a history of relentless oil extraction have become alarmingly visible. Destructive impacts on the environment and failure of oil export revenues to translate into public spending have swayed public opinion against oil, and have given rise to a new discourse in national politics. President Rafael Correa’s adoption of a “tough on oil” (Davidov 2012) ´ policy and public sympathizing with the victims of hazardous national resource exploitation in Lago Agrio currently in legal battle against Chevron/Texaco, have garnered widespread international recognition. Similarly, Correa’s movement towards imbuing the natural environment with monetary value has stunned conservation and economists alike (Davidov 2012). Nevertheless, an Ecuadorian future independent of oil remains unlikely. In this paper, I seek to juxtapose the economic and social impacts of oil Ain Ecuador on locally and nationally. I will begin by analyzing the role of oil in Ecuador’s debt problem and the accepted/contested economic benefits associated with oil. I will follow up with a discussion of economic failures and social costs, and will introduce the Chevron/Texaco lawsuit and the construction of the OCP pipeline as case studies. I will conclude by looking at Ecuador’s future with a focus on dependency on oil.
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...extraction by both national and international companies have extensively affected communities and environments, as was seen from the OCP and Lago Agrio case studies. A shift away from oil under Correa was short lived, which only leaves one alternative for reconciling economic and social impacts on communities and the nation: The government needs to establish a stronger legal framework that disciplines national and international companies and thereby reduces environmental and social damages. The Baynard, Ellis and Davis case study suggests that environmentally undamaging oil extraction procedures can indeed be implemented. However, for long-term economic development and prosperity Ecuador needs to embark on diversification of its industries and investment into socio-economic development, a path that at present cannot be tread without the support of oil revenues.