Ecuador spends the most on public purchases

Ecuadornews:

The first on the list. Ecuador is the country that spends the most in public purchases among 21 nations of Latin America and the Caribbean, according to a study published yesterday by the Inter-American Development Bank (IDB).

According to the research ‘Better spending for better lives: How can Latin America and the Caribbean do more with less’, in 2016 Ecuador allocated almost 16% of the Gross Domestic Product (GDP) in public purchases. That is, more than 15,000 million dollars. Approximately one third is allocated to goods and services and the rest to capital expenditures (infrastructure, buildings, cars, etc.).

In relation to Ecuador’s total public expenditure, public purchases represent close to 40%. The country is surpassed only by Bolivia and Peru.

That percentage exceeds even 32.5% of the members of the Organization for Economic Cooperation and Development (OECD), considered as the club of the rich countries.

However, the IDB figure differs from the data of the National Public Procurement Service (Sercop). In 2016, public purchases reached 7% of GDP. Last year they represented 5.7% and from January to July of this year, 5.9%.

According to the multilateral organization, in 2016 the governments of Latin America and the Caribbean spent nearly 450,000 million dollars on public purchases, which include the acquisition of goods and services and capital equipment.

For example, purchase of computers for elementary schools, the supply of drinking water, gas and electricity, or the construction of a highway or an airport.

The IDB asks if public purchases in the region are efficient and effective. The agency warns that acquisitions are a magnet for inefficiencies in management and corruption.

What is the impact of corruption and bribes on public procurement in the region? The waste of public funds in bribes and bulky budgets seems to be enormous, according to the IDB, since it reaches approximately 26% of the cost of the projects. Therefore, losses are in a range of 7% to 25% of procurement contracts.

Within the latest economic measures, the Government announced improvements in public procurement processes, which have generated losses due to the figure of ‘special regime’. With the changes, the authorities foresee a saving of 400 million dollars. (I)

Source: https://www.expreso.ec/economia/ecuador-gasto-banco-interamericano-desarrollo-pib-EA2389107