Ecuador Is Not a Good Expat Destination
Ecuador’s GDP per capita is roughly one-half of Chile’s and one-fourth of the USA’s, very similar to Colombia and Peru’s GDP per capita. There is little of the First World in Ecuador, although as in all other Third World countries, there are First World sections of major cities like Quito. The major cities are remarkably litter-free, too, unlike most Third World countries I have visited (e.g., India and Nigeria). But the majority of the country is full of largely un-reinforced cinder block or brick constructed buildings with tin, gypsum or other cheap roofing.
The city of Cuenca, purportedly the best that Ecuador has to offer for expat living, is the most leftist in the country—loaded with interventionists. All human rights in Ecuador are considered to be “positive,” that is, privileges granted by the state that can be taken at any moment. Such “rights” normally entail obligating others to pay so that less fortunate people can be assured of them (e.g., minimum education or salary, decent housing, health care, etc.), but in Ecuador even the most fundamental human rights are considered to be positive and thus privileges of the state. There are no natural or “negative” rights to life, liberty or property. These privileges are derived from the nanny state, rather than being considered antecedent to it. Gun purchase and subsequent ownership is no longer possible. Newcomers may not buy a gun. Those who owned guns prior to the policy change may keep them if they register them but they may not carry them out of their homes or use them. However, during the registration process there is a high likelihood that the state will take their guns. Thus, few people register them. Self-defense is very hard to prove against an intruder. If someone enters a gun owner’s home, it makes perfect sense that despite the bad law the homeowner will use his guns against the intruder, and likely go to jail—but better to go to jail than be killed by an intruder, right? As a newcomer, an expat will not have the right to defend himself with a gun, period. And that fact is really bad news to say the least. Criminals and the socialist state enjoy total domination.
Now that Ecuador uses U.S. Dollars instead of Sucres as its currency, due to political and Central Bank mismanagement and hyperinflation in the 1980s and 1990s, the Central Bank has little to do other than to tout Marxist nonsense. Cuenca’s Marxist worldview pervades schools, the media and even reaches the commentary inside the Central Bank branch’s Indian museum display, in particular the biased interpretation of Worldviews. In the numismatic exhibit, the commentaries blame libertarians for inflationary policies and suggest that in the end the well-heeled class gained at the expense of the poorer people. Even dollarization exemplified the classic Marxist class struggle. Speaking of money, two months ago, the government froze all the assets of foreigners in one financial institution (called COOPERA) over US$40,000 (author info source). These beleaguered people have still not gotten back access to their money. Perhaps they never will. It is sad to make a bad choice when expatriating. Cheap rent just got very expensive for some expatriates living in Ecuador that did not carefully consider the ramifications of living in an ideologically-Marxist society.
There is Marxist propaganda and brainwashing everywhere. In the universities, students still study Marx and the most modern stuff they study is Keynes: all archaic garbage. Free market and libertarian scholars like Mises, Hayek, Friedman, Coase, Buchanan, Tullock, Vernon Smith, Rothbard, et al are completely unknown and there is activism to make sure they stay that way. People are ignorant and deprived. Free speech can be costly so people tend to keep their mouths shut. Hardly anyone in Congress is willing to stand up to the President, who effectively legislates by executive edict. In true marxist form to meddle in the affairs of others, Ecuador’s President Rafael Correa, sided with his Bolivian comrade President Evo Morales on October 5, 2013, demanding that Chile cede part of its northern territory to Bolivia in order to give that basket-case country access to the sea (which it lost to Chile in the War of the Pacific in 1883).
Many university students flocked to the lectures I gave on “the role of the state in modern society” highlighting libertarian and public choice principles, at the semi-private Universidad de la Azuay and the sate Universidad de Cuenca. They (mainly law students) were very interested in hearing something besides the standard fare of interventionism. I was glad to see it. Yet the Marxist monopoly on ideology has led to predictable consequences. For instance, Businessmen and entrepreneurs are looked upon with suspicion and are often disliked. Financial transactions are not always easy, but cash is preferred in many places. In one hotel I stayed at in Quito, the manager said I would have to pay a surcharge of 16% to pay with a credit card. Encouraging consumerism is considered to be bad behavior in Ecuador.
Politics are corrupt and full of empty welfare state promises. If it were not for its oil production and dollarization (a shaky reed indeed to lean on) Ecuador’s economy would have died long ago. Shoot, its constitution is so bold to proclaim that the state is the owner of all property, real or movable, in the country. Owning cheap farmland sounds appealing until one realizes that it can be taken at any time. You might be fine for 10 years. Or maybe 20, or maybe only 3. Do you really want to live in such a Third World socialist paradise just so you can pay only $40 for a good steak dinner instead of $50 in Chile? For many things, price differences between Chile and Ecuador are negligible. For some things, Ecuador is cheaper, like the cost of snacks, taxi rides and fuel. For other things, like new cars, prices can be 50% to 300% higher on account of high tariffs. Most upper middle class and wealthier people will pay four to six times more in taxes in Ecuador than in Chile. Mandatory “universal” social security alone is 20% of one’s wages and the value added tax is 12%. Progressive income tax rates reach 35%.
In the “free” medical system expats seeking care will take a great step downward with the corruption, incompetence and long waits in the public system. Lack of competition in the private sector hospitals leads MDs to recommend their own related firms for care that end up not providing the right treatment. So the market is not allowed to work and function well either on account of anticompetitive policies. Expats needing medical care in Ecuador would do well to book a flight to Santiago and spend their cash in a clínica there. There is total uncertainty and instability in Ecuador. Universal social security, paid out to retirees in shaky government bonds instead of cash, is a scary joke.
Where did I get this information? I just spent the better part of a week in Ecuador: mainly in Cuenca and to a lesser extent Quito. I met with libertarian professors and students, speaking frankly about the country’s situation and future. We spoke at length before, during and after lectures I gave in one state university (full of Marxist activists in the audience) and one semi-privatized university. Most of the audience was comprised of law students. We all see that while Ecuador is not quite as bad as Argentina or Bolivia, it is still a basket case. Nearly everyone I ask on the street or in the taxicab (and I ask a lot) says that the economy is bad and they are doing poorly. Those few that are doing well are lawyers and business people that specialize in “antitrust law” (a relatively new concept in Ecuador) or who do things like legally launder Venezuelan Bolivars for Dollars through the Central Bank (its main activity these days besides running museums).
Adding to all these problems, remember that Cuenca sits at 2,550 meters (8,366 feet), making breathing a bit of a chore, and the treeless and frigid national park 45 minutes up the road towards Guayaquil (pretty, but nothing spectacular), called El Cajas, is at 4,167 meters (13,671 feet). Hiking even a mile while up there is a tremendous and somewhat unpleasant challenge!
What good can I say about Cuenca other than the nice climate (but don’t be fooled if you are fair-skinned since the tropical sun is still quite strong)? The people are friendly. The food is OK. Hotel service is good. The city tour double-decker bus costs only $5. Gasoline is only US$1.45 per gallon and diesel is only US$1.05. Violent crime is lower than in Detroit or Miami, but that is not saying much. The country is still far more dangerous than Chile. At least traffic cops now (since reforms about eight years ago) do not require bribes very often. The city of Cuenca is quaint and clean with some interesting history and colonial architecture. Lan Chile has regular flights there. You can get to Europe or North America faster and often cheaper than from Santiago. Some English is spoken but less than in Santiago. Artisan handicrafts are neat. I have heard people say that getting an Ecuadorian passport is a cinch so long as you are willing to marry an Ecuadoran citizen (at least temporarily). I have not verified the veracity of that claim though.
Nevertheless, none of these benefits alone (or summed together) come close to overcoming all the negative features of Ecuador for my taste. I like freedom and dislike socialism. And if you think about it carefully, I doubt these little benefits will be sufficient for your taste either. Ecuador, including Cuenca, does not belong on the liberty-minded expat’s list of countries for possible relocation, period.
If you still have doubts, contact the libertarian folks at Students for Liberty. You can ask for Fabián Pozo (a young libertarian lawyer) or libertarian student leader Paúl Sebastián Jarrin in particular. They arranged my talks in the universities in September 2013, and they both have down-pat all the dirt on Ecuador’s crazy, Marxist public policies. You can also check with the libertarian think tank in Guayaquil. Note that in Ecuador libertarians are called libertarios, unlike in Chile where they are called neoliberales. The Marxists in Ecuador have effectively led the public to believe that neoliberales are really World Bank democrats. Thus the term is not used by libertarians in Ecuador.
Forget Ecuador. Come to Chile instead. Your place of refuge in Chile is in Freedom Orchard. Be sure to tune in to Dr. Cobin’s radio program: “Red Hot Chile” at noon (ET) on Fridays on the Overseas Radio Network (ORN). You can login at www.overseasradio.com. You can also join the thousands of other people who download the shows each month via the link provided on the ORN website (recorded show updated every Monday morning). Be sure, too, to visit www.allaboutchile.com for discussion and forums about the country.
Dr. Cobin’s book, Life in Chile: A Former American’s Guide for Newcomers, is the most comprehensive treatise on Chilean life ever written, designed to help newcomers get settled in Chile. He covers almost ever topic imaginable for immigrants. This knowledge is applied in his valet consulting service (see http://www.chile-consulting.cl), where he guides expatriates through the process of finding a place to live and settle in Chile, helping them glide over the speed bumps that they would otherwise face in getting their visas, setting up businesses, buying real estate, investing in Chilean stocks or gold coins, etc. The cost is $49. If you have problems getting the book through the Overseasradio.com site, since the ORN Store is sometimes closed for maintenance, please use the PayPal info noted below.
Christian Theology of Public Policy: Highlighting the American Experience (2006)
Bible and Government: Public Policy from a Christian Perspective (2003)
A Primer on Modern Themes in Free Market Economics and Policy (2009)
