Ecuador

Publications

Situation and Priorities

Social protection situation

The National Social Inclusion and Equality System in Ecuador has the responsibility to ensure social protection to its population. It comprises contributory, semi contributory and non-contributory schemes. The contributory scheme consists of three mandatory social insurance programmes that cover mainly formal workers, functioning under the Ecuadorian Social Security Institute (IESS). The semi contributory scheme includes the social insurance for rural farmers administered by IESS, which receives cross subsidies from several parties of the system, including contributions from the governments, and a modality of affiliation for non-paid domestic workers which allows women receiving conditional transfers from the government to transfer part of their transfer to make their contribution to the pension regime administered by the social security Institute. Finally, the non-contributory scheme comprises conditional and unconditional cash transfers and social services, provided by the Ministry of Economic and Social Inclusion (MIES).

The Ecuadorian social protection system reflects the country’s economic structure, characterized by informal activities and under-employment (By 2022 almost 70% of workers are in the informal economy). According to the Ecuadorian statistics office, in 2022, only 34% of people with employment had access to contributory social security, leaving behind more than 60% with none social protection whatsoever. Social unprotection is deepened for people commonly facing high risk of exclusion such as youth, women, older people, rural populations, migrants, indigenous people, etc. 

COVID-19 and other crises

COVID-19 took a large toll on the national economy and had a devastating impact on people. GDP had the largest decrease ever recorded in the country (7.8%). One million jobs were lost due to the effects of the pandemic, with women over-represented in the most affected areas: tourism, commerce, and services. Social protection measures to protect lives and livelihoods included emergency cash transfers: the Bono de Apoyo Nutricional, a one-time payment of US$240 for 7990 families; the Bono de Proteccion Familiar por Emergencia, a payment of US$120 paid in two months (March and April) for families earning less than US$400 a month (950,000 beneficiaries). Other measures included reducing the time needed to be eligible to access the unemployment benefits from 60 days to 10 days of uneyployment and thus extending coverage temporarily (4 months during 2020), and extending health coverage to IESS members who lost their jobs for an extra 90 days.

In 2022, the conflict between Russia and Ukraine began at a time when Ecuador was coping with the economic effects caused by COVID-19, resulting in increased inflation, production shortfalls and limited government capacity to offset the impact of the pandemic. The ripple effect of the Ukrainian crisis in Ecuador resulted in a complex economic and social situation that threated to significantly worsen post-pandemic food insecurity projections, against a backdrop of increasing (food) inflation. A couple of months after the increase in general prices (food, financial and energy), social turmoil took over and indigenous people mobilized across the country to protest demanding for several policies, among which the first one was the reduction of fossil fuel prices and price controls for agriculture products to alleviate living conditions of poor families. The response of the government after more than 20 days of social unrest was to reduce fossil fuel prices and increase the conditional cash transfer Bono de Desarrollo Humano from US$50 to US$55. 

Government and social partner priorities

The Government's "Opportunity Creation Plan 2021 - 2025", sets out three social protection priorities and corresponding targets to be achieved by 2025, notably:

  • Reduce the extreme poverty rate from 15.44% to 10.76%.
  • Reduce the youth unemployment rate from 10.08% to 8.17%.
  • Increase the percentage of persons concerned by contribution-based public social security systems from 37.56% to 41.73%.

Social partner priorities comprise the promotion of employment policies to extend social security coverage along with its sustainability, notwithstanding the quality of health services which have been put under pressure following an increase of coverage for children and dependants of affiliates since 2015 without a sustainable source of financing.

Other priorities are related to the prevention and fight against corruption along with the strengthening of governance of the social security system. Social partners agree on promoting transparency and accountability in order to not only provide better efficiency and cost-saving solutions but also to nurture social and financial sustainability to the principles of the systems.  

Workers’ organizations have particular priorities such as the payment of accrued debts from the government to the Ecuadorian Social Security Institute to strengthen primarily the pension and health fund, together with the recovery of debts from the private sector. In terms of governance, there has been a long-standing dispute among this sector about their representative to the Tripartite Governing Body of the Ecuadorian Social Security Institute (Consejo Directivo). 

Employers’ organizations, on the other hand, have priorities oriented to update the labour code that dates back to 1938 in order to reduce certain labour costs that impede employment creation and formalization, not necessarily associated to social security alone. On top of labour reforms, this sector argues for trade agreements and more productive capacities for the country.
 

Results

Funding gaps / Support the ILO

US$ 155,723

Support national entities to consolidate information and monitor SDG 1.3.1 and to include it in the statistical plan

Impact: 18,000,000 - N° of persons with better access to social protection (single registry, online application, one stop-service)
US$ 315,473

Support national capacities to develop a national care system with good and solid governance including local governments

Impact: 18,000,000 - N° of persons with better access to social protection (single registry, online application, one stop-service)
US$ 405,954

Support national entities to design and develop instruments to implement social protection floors in specific populations as for the SDG 1.3.1 (Children, maternity, unemployed, older people, etc.)

Impact: 9 360 000 - N° of persons effectively covered (related SDG 1.3.1)
US$ 269,025

Support the capacities of the country to identify and increase fiscal space for social protection through the design of financing instruments and advocacy processes with experts, congress and social partners.

Impact: 9 360 000 - N° of persons potentially covered by a strategy
US$ 526,236

Support the country to develop strategies promoting transit from informality to formalization, specially in rural areas with influence of indigenous people with reduced social protection coverage related to agricultural production.

Impact: 2 092 801 - N° of persons with better access to social protection (single registry, online application, one stop-service)
US$ 361,922

Support the capacities of the Social Security Institute to comprehensively improve coverage, adequacy and sustainability of the unemployment insurance

Impact: 389340 - N° of persons with better access to social protection (single registry, online application, one stop-service)

Support the ILO

Multimedia

ILO Experts

IMG
Pablo Casalí
Specialist, Social Security
David Jaramillo
National Project Officer
IMG
Fabian Vallejo
National Project Officer