Alternatives and challenges to face the transition from the post-oil era in Ecuador

Abstract

Global society is in crisis due to environmental, social and economic changes. This exacerbated by the spread of COVID-19 between 2019 and 2023 and the deterioration of the financial system of the Ecuadorian State has led us to a crisis at the local level. This document is a contribution to generate a critical reflection on the use of royalties obtained from oil extraction, which for the last 40 years has been the main item that feeds the Gross Domestic Product of Ecuador. These royalties have not been invested in sectors such as education, health and services. The change in the productive matrix of the Ecuadorian State must consider that the agreements to face climate change include that countries that import hydrocarbons reduce their dependence on this type of energy. As this energy transition occurs, the countries of the global south, see their economy compromised, since they do not have a plan to face this scenario. Finally, this systemic crisis brings enormous challenges for developing countries like Ecuador, whose economy is based on a poorly diversified and extractivist model, evidencing the need to rethink its development scheme. In this sense, in this article: (1) we reflect on the current economic growth model vs. the energy transition model proposed by various sectors of global society (2) we analyze the connections between ecological balance, health and the global economy, and the COVID-19 pandemic; and (3) we examine the alternatives and economic challenges based on the use of biodiversity and ecosystem services to face the post-oil era in Ecuador. The conclusions: Public education at all levels is a strategic investment for any sovereign State, whose fundamental role is to generate the necessary conditions to transform society and maintain its cultural matrix under elementary principles, where the recognition of the various forms of organization of society are respected and strengthened, such as the sovereign indigenous peoples and nationalities and their territories, the processes of reproduction of material life, use and exploitation of natural resources, for which we suggest that the "Kawsay Sacha" be studied. In order to face the economic and environmental crises, it is imperative to promote a diversified bioeconomy that enhances the development of strategic sectors such as food production and innovative ventures linked to the sustainable use of biodiversity and ecosystem services. Investment in education is still less than 4% of Ecuador's total annual budget and society must consider that any attempt to implement sustainable economic growth projects is not possible without duplicating annually the budget in education.