Compliance with the law, and even paying taxes, is not among the priorities. The economy stops growing between 1% and 2% a year due to the lack of public faith.
The Ecuadorians they have the distrust recorded in each of their daily acts.
According to a latest study and survey conducted by the Inter-American Development Bank (IDB), under the title of ‘Trust: The key to social cohesion and growth in Latin America and the Caribbean’, less than 10% of the inhabitants of Ecuador trust in their peers.
In this case, the trust is defined as the belief that others will not act opportunistically. They won’t make promises they can’t keep, renege on promises they can keep, or break the rules to take advantage of others. Simply put, it all comes down to faith in others: in their honesty, reliability, and goodwill.
Mistrust affects the economy
Yes that public faith does not exist, not only coexistence it becomes a dialogue of deaf ears and full of actions of “every man for himself”; but, according to the IDB, “there is less and less willingness to carry out commercial transactions, hire unknown people, pay taxes and hold the State to account for the management of public resources (because it is assumed that corruption is normal). At the same time, however, citizens are more likely to ask governments to provide them with immediate personal benefits in the form of subsidies and transfers rather than demanding more efficient and effective investments in public goods.
In other words, a vicious circle is set up where everyone complains; but nobody, or very few take the step to really change the situation. The result, according to María Rocío Mejía, an economist and international development consultant, is that the economy it does not have solid foundations to grow and evasion has all the justifications.
“If everyone steals from me, starting with the government, because I’m going to pay taxes or comply with the law. This mentality is present throughout the region, but in Ecuador it has reached levels that take away between 1% and 2% of economic growth every year. Years of impunity and little transparency have destroyed the national psyche,” he explained.
Lack of opportunities and social frustration
Even the red tape and obstacles to entrepreneurship are behind this mentality where, “if strong controls and requirements are not put in place”, nobody does the right thing. In addition, at the political level, the myth is created that only a strong figure, “with a strong hand” can bring order.
in a society distrustful, an entrepreneur, or even a technological innovator is 70% less likely to find the necessary support, not only from the credit level, but also from the purchase of their goods and services by their closest circles of friends and family.
This lack of opportunities, and its consequent social frustration, in a significant percentage is vented through growing illicit activities, and in the worst scenario, in openly violent and criminal activities.
In the most innovative countries, with more productivity and technological advances, faith in others exceeds 45%.
Justice and transparency are key
Among the member countries of the Organization for Economic Cooperation and Development (OECD), which are the ones with the best social indicators and access to information, more than 60% of people have trust fully in the institutions of Justice.
In societies such as Ecuador, the percentage does not even reach 30%; while the most prestigious institution is the army, “with all the connotations that if it is not imposed by force, nothing is achieved”
For this reason, one of the main challenges to reverse the lack of public faith is the reconstruction of a judicial function that it really works; and where the basic precept of equality before the law is applied.
Another important aspect is that the transparency is absent in all spaces. Thus, for example, less than 50% of the information from public institutions, and even from companies, is easily available to citizens and the media.
More and better entrepreneurs
The feeling anti business is another edge of the distrust in Ecuadorian society. According to the IDB study, around 55% of citizens they believe that they overcharge, earn too much, evade taxes, and even raise ill-gotten fortunes in the case of the largest economic groups.
Patricio Mendoza, a medium-sized entrepreneur in the textile sector, assured that this scenario is combated with the impulse of greater competition, that is, that more people can open businesses without so many obstacles.
Also, the only recipe to generate public faith is more and better quality in production. “Ecuador does have a majority of good Business. Not everything is exploitation, but if there are abuses there must be real sanctions. Not everything should be sales per se, but also seek the development of our employees. If there is no money to pay better salaries, there are also other incentives such as opportunities for preparation, rest and recognition”, he pointed out. (JS)
La confianza también es baja entre los mismos funcionarios públicos. Menos del 40% de los burócratas ecuatorianos tiene fe en sus pares.
