Ecuador: Strengthening Financial Resilience

Ecuador faces a convergence of vulnerabilities that severely constrain its resilience to shocks, both economic and climatic. Despite its dollarized economy and oil-exporting status, the country’s overreliance on primary exports, fragmented financial inclusion, and exposure to seismic and climate-induced disasters have heightened fiscal stress and increased inequality. Nearly 25% of the population lives in income poverty, with rural areas disproportionately affected. In this context, the UNDP’s Insurance and Risk Finance Facility (IRFF) launched a Country Diagnostic to assess Ecuador’s readiness and gaps in disaster risk financing and inclusive insurance. The diagnostic, initially prepared by local experts, required an independent international review to ensure its strategic robustness and policy relevance prior to formal adoption.

To validate and enhance the diagnostic, UNDP engaged GG International, appointing its Insurance, Finance and Risk team leader, Russell Leith, to conduct a comprehensive expert review. He was supported by international legal specialist Shaan Stevens, who focused on ensuring regulatory coherence and international best practice alignment. Their intervention aimed to:

The review strengthened the Diagnostic Report by clarifying conceptual linkages between macro-fiscal risk, inclusive insurance systems, and governance reform needs. It brought attention to Ecuador’s institutional fragmentation in disaster response, the absence of an operational sovereign risk finance strategy, and the limited reach of current insurance offerings, particularly for vulnerable and informal sectors. The final recommendations endorsed by GG International emphasized: