TABLE OF CONTENTS

INTRODUCTION
I.

II.

DESCRIPTION OF THE REALITY

1. The global level

2. The national level

3. The local level

Description

Actors and networks

PROPOSED POLICIES AND STRATEGIES

1. Selecting a strategy

2. Strategic plan

11

3. Analyzing policies

12

III.

EXPECTED RESULTS AND CONCLUSIONS

13

IV.

ANNEXES

V.

BIBLIOGRAPHY

POLICIES TO PROMOTE LOCAL DEVELOPMENT IN LETAMENDI PARISH

INTRODUCTION
Organizational, human and physical resources of most of developing countries seem not enough to
succeed local development in the short and medium term. But not just resources are important. There
are also processes in the global, national and local level which shape development in those regions. It is
important to identify them in order to understand the reality and to formulate possible strategies and
policies to overcome poverty and to acomplish local (economic, social and culturalhuman- and
political) development.
The process of globalization and internationalization
Currently, with the emergence of a new geo-economy there are coexisting processes of
internationalization and globalization among urban and rural areas. Internationalization involves the
simple extension of economic activities across national boundaries. It is esentially a quantitative process
which leads to more extensive geographical pattern of economic activity. Globalization is qualitatevily
different from it. It involves also and more importantly the functional integration of such internationally
dispersed activities (Dicken 1998: 5).
Globalization reflects the fact that the world is in a process of transformation into one place, a single
social system (Giddens 1989: 519). Local, regional and national development is increasingly shaped
by forces that transcend the national context. This process has several dimensions such as economic,
technological, political, ideological, cultural and environmental aspects. And this process is also
happening in an uneven way, where there are some few people (or countries) which benefit from it,
while most of the rest of the world suffer from it (Berner and Conyers 2001).
Internationally called developing countries among which is Ecuador are located among the loosers
of globalization, and in that way, most of the processes developed within the country respond to this
reality, depending economically and politically as well as ideologically- on others countries and
realities, and on international processes.
The importance of Urbanization and Cities
Urbanization occurs because of massive shifts of labor and capital from predominantly rural to
predominantly urban activities in the course of economic development (Mills and Becker 1986: 14).
Urbanization is one the typical processes of modernization, especially in universally called developing
countries where the increase of urban population has been accelerated drastically.
Cities and towns are vital for the development of economic systems and social organizations. However,
cities face tremendous challenges. They have to simultaneously attract business, provide a good
livelihood for their inhabitants, generate enough resources to finance infrastructure and social needs
and take care of their poor (World Bank 2001). Talking about social needs and the poor, it is necessary
to refer to poverty as a concept and in a causal relationship, especially within the cities.
Urban poverty is a reflection of rural poverty in most developing countries. Cities offer rural migrants
a possible escape from joblessness, underemployment, oppressive agrarian structures or low
productivity subsistence work. But the number of potential migrantsis too great for urban economies
to readily absorb them all. The existence of a rural labour reserve then intensifies competition in the
urban labour market, and permits urban producers to maintain an insecure, unorganized and low-paid
workforce (Rodgers: 2).

The importance of Local Economic Development

With some drafts of reality described above, it is important to remark possibilities of Local Economic
Development, understanding it with all the spheres of the society. In that way, besides the processes of
Internationalization and Globalization on which countries are immersed, it has been proved that place
matters, and in that way, Local Development turns as the key of economic and social growth.
With a rapid growth of urbanization due to migration and increase of population, there is also a
declining of productivity, where LED becomes essential. Besides that, applying Structural Adjustment
programmes in developing countries, it has been shown that market institutions and private sector
investment do not emerge spontaneously, so it is urgent to propose specific policies to stimulate
development and growth (Helmsing 2001).
Referring to Local Economic Development LED is important to conceive it as a process by which local
government and/or community-based groups manage their existing resources and enter into new
partnership arrangements with the private sector, or with each other, to create new jobs and stimulate
economic activity in a well-defined economic zone. The central feature is in the emphasis on
endogenous development policies using the potential of local human, institutional, and physical
resources (Blakely 1989: 58).
The importance of small and micro enterprises in Latin America
The strong arguments in favour of small enterprises, such as labour intensiveness, adaptability,
advantageous utilization of local production factors, reduced dependence on imports and their role of
providing a seed-bed for indigenous entrepreneurship development, had already been confirmed(Spath
1993: 1)
Decades ago the focus of Economic Development was on big enterprises due supposedly- to its
support to local development in terms of employment and so on. This formulation is not coherent with
the current reality in Latin America, where small and micro enterprises holds the majority of economic
activities within the countries and the region, with very positive consequences. In that way, the role of
small firms in Latin American countries differs from the one they play in advanced industrialized
countriesit has several characteristics that have consequences for the structures of firms(Schmitz
1990).

I. DESCRIPTION OF THE REALITY: LETAMENDI PARISH

In order to analyze an area where resources seem not enough to succeed development, it was chose
Letamendi parish, an urban locality of Guayaquil City, in Ecuador, Latin America. To describe and
understand the reality of this place, one may pay attention to processes at global, national and local
level.
1. The Global Level
As part of Latin America, Ecuador has suffered some situation of economic and political crises and
deprivation since the origins of its constitution, but intensively in last two decades. The economic
slowdown in Latin Americans countries that began in 1998 continued through most of 1999, although
by 2000 recovery was under way in most countries (it is not the case of Ecuador). Its major problems
have been external shocks in terms of trade and difficult to access to capital markets, but in the last
years it has been added by natural disasters in some of the countries of the region (The World Bank
Group 2001).
Even with growth, deep inequalities of income persist, as poverty does with a 35% of the population. In
that way, Latin America has probably the most inequitable income distribution of all the regions in the
world. Among the consequences of this reality, one may find unemployment as seen the major problem,
inadequate infrastructure, high and deep levels of corruption, violence and crime and some others (The
World Bank Group 2001).
2. The National Level
The small size of Ecuadors economy has meant that historically its development and growth have
come from external markets. Periods of high economic growth have therefore mainly resulted from
export booms. This development pattern, with inadequate export diversification, has left the economy
vulnerable to terms-of-trade shocks. Such shocks, together with the rigidities of the domestic economy,
lagging structural reform in the public and financial sector, and the inadequate policy responses, have
negatively affected economic and social development in the country (The World Bank Group 2000).
From 1998 up to 2000, Ecuador has been indeed in a terrible situation, which has not overcome yet. Its
economy was imploding. GDP shrank by 7,3% in 1999. Much of the financial system collapsed, as the
sucre (its currency) did. And the government did not pay some of its debts. The adoption of the dollar as
national currency was took by the President, Jamil Mahuad, in a desperate attempt to stop
hyperinflation, which causes he was forced out from the Government by a coalition of the armed forces,
Indian movements, political parties and civil society. Pressed by the United States, the (at that time)
vice-president, Gustavo Noboa, got the power of the country. (Ortiz 2000: 77)
By that time (as currently), Ecuador had one of Latin Americans heaviest public external-debt burdens
(The World Bank Group 2000). It had an International Debt of $1,311.9 per capita, whose service
represented 48% of its Gross National Product GNP. With a devaluation of 116% in 1999, it was
duplicated by 246% the next year (Banco Central del Ecuador 2000).
Besides that, Structural Adjustment programmes have declined the reality of most of the people,
especially the middle class and the poor. Even with a slight growth of some Ecuadors economic
indicators, living conditions have been reduced and poverty has increased.
Currently Ecuadors economic structure is focused on the third sector of the economy, the Services
Sector, with a 44% of their total economic activity. Within it, Commerce has more relevance (14%),

followed by Social services (12%), Transportation (9%) and Financing services (8%). The Industrial
Sector holds the 33% of the national activities, with their major leverage in Petroleum exploitation (14%)
and Manufacturing (16%). Agriculture holds a 19% of the total of economic activities of the country
(INEC 1999).
Focusing on the reality of enterprises, there can be differentiated a diversity of actors and groups, where
the weight is stressed in survival groups, micro and small enterprises. It is difficult to analyze the
situation of these three economic groups due to a lack of unity of definition of these enterprises, a lack
of updated data, and some other factors. Indeed, there is a coexistence of definitions that are focused
on one or another aspect of economic activities, but not single definition of a micro enterprise. Thus, is
the main issue is employment, the micro enterprise is defined as micro-establishments operating in the
urban informal sector, in which the number of workers of each economic unit must not exceed 5 and
is defined as carrying out activities of production, commerce and services and whose capital for each
job does not exceed the amount of fifty minimum wageswhose ownership is a partnership type of
workers,(Rosero 1992 quoted by Tokman and Klein 1996: 112). Even that, an important effort was
made in order to analyze the situation of these enterprises in the locality of Letamendi parish.
In term of political (but also economically responsible) actors, Central Government has developed in the
last year some initiatives to reactivate the economy of the country, especially production and
commercialization. Among them, Banco Nacional de Fomento BNFs capitalization was one of the most
positive in terms of stopping decline of more firms especially small and medium enterprises -,
decreasing the reduction of number of workers in those places and so on. BNF is in charge of giving
loans to farmers, survival groups, micro, small and medium enterprises, in order to promote economic
growth.
In terms of income and distribution of Ecuadors population, the real GDP per capita of the households
of the first quintile of the population1 in 1999 was US$3.316 per year, which mean an average of $46
per person per month (considering an average of 6 members per family in the country)(Banco Central
del Ecuador 2000). Indeed, there are a 52% of people below the poverty line2 and a Gini coefficient of
0,46 (in 1996), which measures inequality of income. Measured between 0 to 1, as higher is the Ginis
value as more inequality exists in the country. In the case of Ecuador, this value means high levels of
income inequality among the households.
In terms of Human Development, Ecuador holds a Human Development Index HDI of 76% (Human
Development Report 1996). In terms of poverty, following the Unsatisfied Basic Needs UBN index there
is a 53% of the population of the country with at least one unsatisfied basic need (INEC 1999).
Even with some efforts made lately by the Government, there are not responsive Social Policies in the
country, especially for children and the youth. Governments social programmes have tried to target the
weakest and poorest sector of the population with some positive results, but with a relatively high
undercoverage (Pablo de la Vega 1998). Implemented by the previous president, Jamil Mahuad, these
programmes have pursued poverty alleviation, especially in urban areas (due to its mechanism of
delivery of the service, through the private financing system). Following transfer principles, some taxes
were created, others were enlarged their tax payers base, and with anothers, collecting mechanisms
were improved in order to create new revenues to finance the social initiatives. Among the latter, the
Bono Solidario (Solidarity Bonus) and the Bono de la Vivienda (Housing Bonus) were the most
appreciated by the people, even though there were some other subsidies as the cooking gas and
others.
3. The Local Level

To measure a more accurate income distribution, population has been classified in 5 quintiles, where the first
one represents the poorest people of the country, and the fifth one, the richest one.
2 Poverty line is fixed at $2 per day per person.
1

Guayaquil is the main city of Ecuador in terms of population, industrialization and economic productivity
and international relations. It has been the center for banking, commercial and export-import activities
since the early 1900s There are linkages to the international system, and the cultural outlook is
Western rather than Indian. There is a spirit of independence and individual freedom, which encourages
social mobility, economic activity, and political volatility(Martz 1998:463).
The main challenges of Guayaquil as most of the cities in the world are how to create a new city
structure over the existing one to incorporate all stakeholders in the local economic, social, political and
cultural processes in order to promote development. Historically, as the main port of the country and the
Latin Americans Pacific Coast since the Spanish Colonization, the city has received thousand of
migrants from European (Spain, Italy, France, England) and Asian countries (Turkey, Lebanon, Arabia,
Japan, China) through the decades.
As a result of this long-term process, the city has become the most populated and industrialized locality
of the country, and because of that has received thousands of migrants from rural areas of the Coast,
and from other cities of the Highlands of the country. This has resulted in a cultural diversity of the
place, which sometimes become an obstacle hard to manage when Local Government is trying to
handle economic, social and political development. But, in the other way around, all this national and
international migration has increased the capacity of internationalization of the city, in terms of
commerce, political independence and cultural manifestations.
From the Local Government of the city, the Municipality is playing an important role in improving basic
services delivery and developing collective initiatives. Some of the programs that have been developed
in the city and also in the parish, are Mas Salud (More Health), Mas Seguridad (More Security), Mas
Ciudad (More City) and so forth.
The other local government, the Gobernacion of Guayas, has not made any input to improve services or
living conditions and/or reactivating the economy or the facilities to produce or commercialize. The
Gobernacion is in charge of some basic services and infrastructure of the province, not just the city,
such as constructing and maintaining roads, sewage services, and so on.
Description of Letamendi parish
Within the city, there are 19 urban civil parishes, one of which is Letamendi parish. Located at the south
west of the city, it holds a population of almost six thousands (6,000) people, conforming approximately
one thousand families. Initiated as a squatter settlement more than 30 years ago, currently it can be
categorized as a poor neighborhood between some shantytowns of the west part of the city and middle
class vicinities. With all the basic services (electricity, piped water, sewage system), it also holds
educational and health public and private infrastructure.
Analysis of the economic base should consider determining which sectors play a dominant role in the
local economy in terms of jobs, sales, taxes paid, and linkages to other local industries; assessing the
local potential for economic growth(Blakely 1989: 123). In that way, Letamendi parishs population is
dedicated basically to the third sector of the economy (Services), formed by survival groups and micro
and small enterprises.
The Survival group might be called pre-entrepreneurial, which have to engage in some form of incomegenerating activities to survive. The under-employed, overly abundant hawkers and vendors of most
developing countries, subsistence farmers and many womens household activities would fit in this
category (Farbman and Lessik 1989:108).
Among the survival groups one may find approximately 85% in trading (500 street vendors, 200 families
selling row food in the 2 markets of the sector, 60 mostly women managed shops, and others), 6% in
garment production (50 sewers and some others) and 8% in diverse services (40 beauty services

shops, 18 video games rent, and others cleaning and repair services) and some initiatives of food
processing.
In order to analyze micro enterprises, it is necessary to create a concept built on the definition of these
units in the national level (quoted above by Rosero) and understanding them as units that are usually
located in the home. The technology used is often traditional, based on widely existing technical
knowledge, existing labour skills and existing raw materials supplies. Markets served typically are local
(Farbman and Lessik 1989: 109).
Among the micro enterprises in the locality, the biggest and most important (in term of number of
employees) are a 85% in charge of selling things in small shops (25 small markets, 9 garment shops, 6
restaurants), 11% producing garment and furniture and a 4% of services (2 discotheques).
Small-scale Enterprises are defined as businesses with roughly ten to fifty workers [less in
Ecuador]they use some non-traditional or modern technology in some aspect of the transformation
processThe marketing patterns may be somewhat more complex, reflecting innovation in raw
material procurement or in output sales. Small-scale enterprises may be more economically efficient
than micro enterprises (Farbman and Lessik 1989: 109). Among the small enterprises, in the parish are
10 private schools, 2 electromechanical industrial workshops, 2 mechanic workshops for cars and 4
pubs.
In the parish there are also very few industrial initiatives (medium enterprises), and they are leading to a
slow but consistent economic growth of the sector; but they are part of another kind of analysis.
Actors and Networks
The main social actors, groups and networks present in Letamendi parish coexist in a almost horizontal
hierarchical system, where organizations of the public sphere have some power in relation to the private
ones, but where Don Bosco Church plays a main role in terms of organization and development. In
general, there are stakeholders from the private, public and civil society sector.
Non Government Organizations NGOs are non-profit as well as non-governmental organizations,
including clubs, work teams, associations, cooperatives, charities, campaigning groups and so on
(Thomas 1992:122). These organizations have been developed through successive stages, among
them is the second generation of NGOs, the Small-scale Self-reliant development. There, NGOs are in
charge of integrating community in order to reach development. This basic step is community organizing
through a network of people and organizations, increasing communities bargaining power with the
central and local government. They include community development projects in areas such as
preventive health, improved farming practices and so on (Korten 1987).
The group leader in the locality is Don Bosco Church, which with a religious perspective has developed
a network of services, groups and institutions in the locality, among which are the Primary School and
Technical School, the Vocational Center, the Health Services Unity, the production and consumption
Communities Cooperatives, and of course the Catholic Church. It is the leading organization because
around it the community was born and organized many years ago and it still has the leadership to
mobilize especially women, old people and the youth. Don Bosco Church has always applied the
pedagogy of the oppressed (Thomas 1992: 135) formulated by Freire, in order to promote
conscientization and empowerment.
Besides Don Bosco Church, there are some other organizations as Non Government Organizations
NGOs and Community Based Organizations CBOs. Among the NGOs, in Letamendi parish are two
important group: INNFA (National Institute for children and family) and a female religious community:
The marianitas. The former is in charge of developing activities for kids in order to improve family
relationships, and the latter, besides running a private primary school they offer cheap lunches in a
Popular Restaurant for the community.

Community Based Organizations CBOs in the parish are developed through the Comunidades
Eclesiales de Base CEB (Eclesiastic-based Communities), which develop processes of political
concientization, religious formation and social assistance.
Currently, Local government plays some incipient role in the locality, but a definitely active role in the
city, so in this way, could be analyzed as a possible parternship in a process of Local Development in
the future.

II. PROPOSED POLICIES AND STRATEGIES

1. DESIGNING A STRATEGY
After a brief description of the context of Letamendi parish, it is time to build a strategy to pursue Local
Economic (and Socio-cultural political development) Development among the peep. Therefore, it is
important to design specific strategies which respond to the diversity and specificity of the place. In that
way, these strategies should consider the following aspects:
a. Based on existing localized capabilities
The capabilities of a region may be perceived as consisting of four main elements: institutional
endowment (all the rules, practices, routines, habits, traditions, etc associated with the supply of
capital, land and labour and the market of goods and services), built structures, natural resources
and knowledge and skills (Maskell 1998: 53). Maximizing local capabilities would be the best way
to formulate any strategy in Letamendi parish. Hence, the first step should be to identify them to
build on them.
As local capabilities, Letamendi parish holds some natural resources and built structures, which
can be described as conventional sources of Competitive Advantages (Helmsing 2001) as the
following:
Is physically located as a natural border between middle class neighborhoods and poor
settlements of the southeastern part of the city.
In Don Bosco church, the Technical School holds a quite number of technical specialized
equipment for production of industrial spare parts, which has been seen as an important
resource. Besides that, the German Adveniat foundation is every other year supplying new
equipment in order to update technology in the School, so it is easy to get more equipment to
furbish a new firm.
Adult population have developed through the years, and always supported by Don Bosco
Church, some collective initiatives as engaging in mutual support and assisting in case of
failure. These have been Cooperatives of loans, production and consumption.
But there are also some characteristics as part of the institutional endowment and knowledge and
skills, which can be identified also as sources of the new competition (Bests typology of
dimensions of the new competition), and are the following ones:
In term of trade associations, the Don Boscos Cooperative of Consumption works with a
national trade organization called Maquita Cushunchic MC, which follows principles of equity,
social justice and empowerment among their stakeholders. Networking with MC, allows to
trade goods with higher in relation with the level of the market - levels of profits, and also to
sell goods at lower costs.
A small group (100 students per year) of well-educated specialized (in mechanic technology)
young male labour force is given to the market every year, which is often insufficient for the
local demand. In Guayaquil, the most industrialized city of the country, are just 3 centers of
high quality technical education and training, which do not cover the demand of the city market.
In that way, it is often the import of labour force from other cities (especially from inner cities as
Machala, Los Rios, etc) of the country, and for very specialized jobs, from outside of the
country.
Don Bosco Church has created a network of groups, organizations and services in the parish.
This has been utilized to increase income, to improve living conditions, to improve (or start)

delivery of services and to rely on each other with a catholic perspective. This has resulted in a
high CONVOCATORIA and confidence of people from the locality but also from other places of
the city, country and from the donors.
Besides that, there is a Parish Census accomplished in 1999, which contains social, economic and
cultural indicators of the population and organizations of the place. It has been used for obtaining
data and formulating alternatives during this essay, and it has been seen as one resource of the
community in term of information and planning processes which were required to collect all that
data in the place.
b. With a Triple C approach: Custom oriented, cumulative and collective
The strategies need to be formulated trying to achieve the Triple C approach: custom oriented,
cumulative and collective. In terms of custom oriented (especially with the Industrial
electromechanical project), the idea is to develop a personalized customs needs system, where
the production responds to orders of the clients. In terms of Cumulative, since the cumulative
causation theory which affirms economies of scale give rise to increasing returns to scale, allow
agglomeration of economies (externalities) to converge, and provoke spread effects (Helmsing
2001). In terms of collective action, to involve all stakeholders of this process, creating or pushing
networking in the locality.
c.

Integrating all the stakeholders of the locality

A complete and integral set of policies which cover the main types of firms of the locality and
promote socioeconomic and political development. In that sense, it will focus on 3 main approaches
(Blakely 1989): Business, Community and Locality Development.
Business development: Is an important component of local economic planning since the
attraction, creation, or retention of business activities is the best way to establish a healthy
local economy. (Blakely 1989:160) Focused on Small and Medium Enterprises of the locality,
its goals is to increase employment generation and income growth through promoting
businesses into a sustainable growth dynamicprovides its beneficiaries a concentrated,
individualized package of technical assistance, training and credit resourcesto overcome
particular problems of that enterprise or subsector of enterprises (Farbman and Lessik 1989:
113).
Strategies should be based on supply and demand of the locality (currently there are a lot of
small workshops): building on existing networks, new products should be traded through
Maquita Cushunchic (national level), and pursuing the strengthening of small cluster of
technical products and services for the same locality and around them (low cost and good
quality). Because its strategic position (in the middle of the middle class and lower class) it is
possible to get both kind of clients.
In other way, Local Economic Development has been developed through 3 main generations
of policy perspectives. Currently, in some countries of the world, firms are engaged in a new
competition (Helmsing 1999). Ecuadors firms, and specifically Guayaquils ones, can be
located between the second and third generation. Second generation of policies, to work with
the number of micro, small and medium firms that operate in the city; and third generation of
policies, to big firms deal with the international globalized context of the city and the country.
Locality Development: Focused on improving the environment (natural and institutional) in
order to allow or facilitate the formation and growth of economic activities. This will pursue
others than just economic factors, but which have a close relationship with economic
structures.

10

These strategies are the result of a process of selection, which followed 4 basic considerations
(Blakely 1989: 123): determining sectors which play a dominant role in the local economy,
identifying important linkages between the local economy and the external economy,
assessing the local potential for economic growth, and identifying contingencies important to
the economic development of the locality.
Community development: Focused on Survival groups as the main stakeholders of this
approach, also is trying to pursue development of networks and collective initiatives. In fact,
the goal of the community development approach is poverty alleviation and community
growth. It is concerned with issues of broad social and economic development,is a key focus
in dealing with this groups economic needs it comprises integrated programmes of social
infrastructure development, credit, low-level technical assistance, and education
inputsinclude efforts specifically addressed to meeting basic human need requirements
(Farbman and Lessik 1989: 111).
d. With a Human Development approach (as leaded by Don Bosco Church, with a catholic
perspective).
All this main characteristics will be complemented with a Human Development perspective, with
emphasis in the people more than in the economic indicators and processes, trying to respect the
diversity of the community. This also means executing especially among survival groupsunproductive projects if they result positive in participation, income generation and other terms.

11

2. STRATEGIC PLAN
Based on all the conditions mentioned above, the strategic plan for developing Letamendi parish will be
as following (See Annex # 1):
a. Based on Business development approach.- The strategies proposed following new firm formation
goal must be identified as a second category of entrepreneurial event, the allocating one, where
new combination of resources will be arranged in order to fill the needs of the industrial market of
the city (Binks and Vale 1994: 43). In this sense, all the initiatives are trying to build new firms in
preexisting ones, stimulating emergence of agglomeration, and based on local capabilities (Bennett
and McCoshan 1993:204).
Among this goal, there are four possible projects formulated:
1. Industrial electromechanical production center: Targeted for students of Don Bosco Technical
School and male adults of sector, will pursue the formation of a new Small scale firm based on al
the institutional and physical resources existing in Don Bosco School, with the cooperation of
Adveniat, a German donor. The location of this firm within the locality is intentional, due to its near
connection with the main highway (Avenida Perimetral) of the city, which connect to the two main
poles of industrialization: the South (with the port) and the North.
2. Daily care center: To employ a small number of adult females (especially mothers) of the sector,
with the assistance of Maria Guare foundation. This service will be offer basically to the middle
class neighbourhoods of the sector.
3. Social events firms: Similar than the previous one, but also giving the opportunity to young
women to incorporate to the project.
4. Skill bank: To connect unemployed youth of the sector (supply) with firms and households from
the city (demand), in an effort to increase possibilities of employment and income generation. It will
be in charge of Don Bosco Church.
As Donors or for funding the projects of microenterprises, regarding credit aimed at
microenterprises, (in Ecuador) there are two government entities able to grant such credits;
CONAUPE and UNEPROM. In the case of microenterprises rated as artisans operations, the state
credit institutes increase to four with the addition of credit lines made available by the Banco
Nacional de Fomento BNF (Tokman and Klein 1996: 117).
In order to deliver Financing support services, there will be a project of Small Credit Schemes,
which will be supported by BNF (Banco Nacional de Fomento) in terms of delivery of credit, and
Fundacion Esquel, in terms of training and technical assistance.
b. Based on Locality development approach.- Pursuing 3 different goals, there are several projects,
focused as it is described as follow:
Increasing the value of the labour force: Project of training in computer skills (young people
between 18-30 years, working with Don Bosco School), Project of training in domestic issues
(Fundacion Maria Guare: for women between 18 45 in order to access domestic jobs, and Project
of adult literacy (Ministry of Education, through national program, directed to illiterate).
Settlement improvement: Accessing to house and improving housing situation project, focalized in
2 slums of the sector: one of black people and the other one, in the poorest zone, with the support

12

of an international NGO (Houses home Christs) and a Governmental program called Housing
Bonus.
Providing services: Civil security project to employ male adults of the sector, with the financial
support of the Local Government.
c.

Based Community development approach.- This approach is trying to support survival economic
activities and improve networking, working with 60 (mostly) female owners of small shops, with the
support of Huancavilca Foundation and Maquita Cushunchic.

At the beginning of the formulation of strategies, there was thought to rehabilitate or create
Cooperatives, following the community perspective that has always been applied in the parish. After all,
it was decided not to pursue them due to an important individualistic character of the people of the city,
cultural attribute that has destroyed most of the collective initiatives in the Coast of the country, and
specifically in the city.
All this initiatives have been seen to be worked as a network, which could be flexible task or matrix.
Probably the best one is the matrix, so each actor could be described by its role according to specific
projects or activities. To create (or ampliate) this network, it will become necessary a Coordinator Team,
which can be leading the development of Letamendi parish. In this team should be participate at least
one representative from the public (local government), private (small enterprises) and civil society
(NGOs: Don Bosco Church and somebody from the CBOs).
3. Analyzing policies of local development promotion
Trying to succeed local development goals is not enough for dealing with the situation and problems of
Letamendi parish. That is way there were formulated also Human Poverty Alleviation projects, because
basic human needs can not wait, and should be attended in all kind of projects. These initiatives should
be encouraged and understood as an important part of Local Development Project.
In the case of Letamendi parish these projects could be:
a. Children Nutrition Project: Directed to children in public schools and in from the black sector of the
parish, with the financial support of the Central Government through Nutritional Programmes, of
international NGOs, CEBs and CBOs of the locality, and the Junta de Beneficencia de Guayaquil
(another urban NGO).
b. Third age assistance project: Working with abandoned old people of the sector, with the same actors
than the previous project.

III. EXPECTED RESULTS AND CONCLUSIONS

13

As Scott and Storper say the viability of contemporary flexible production agglomerations depends to a
high degree upon effective institution-building at the regional level...and there remains... an open
question about how to marry economic efficiency and social justice. In this way, the main suggestion
applying these strategies and to succeed them is networking and participation. Building on existing
organizations, groups and institutions can result in highly positive changes in terms of increasing
employment and living conditions with most of the population of the parish.
It is expected also some positive responsiveness from the local and central government. The former
due to its activate participation in other localities of the city, with can assure a positive support with
Letamendi parish. From the central government, because currently it is supporting new initiatives to
empower people and organizations, especially if they respond to economic development and growth.
From the industrial sector of the city, all this business initiatives will be highly welcomed, due to the low
supply of small parts (pieces) in the city, which increase costs of production and delay its process. A
different situation will be the response from the other firms in charge of the production of technical parts,
which will see increased the competition, and their demand will be reduced.
In terms of people, it is easy to expect a active participation in all the projects formulated in this paper,
as well as always has been a massively response to the different initiatives of Don Bosco Church.
Different situation could be the black sector of the parish, who normally do not participate and
sometimes, interrupt activities.
Talking about human poverty alleviation, it is possible to state there can be a sensitive increase of levels
of nutrition in children of the projects, and in quality of housing, but the real positive change will be in the
security of income of the people engaged in the new economic projects of the locality.
Finally, besides all these conclusions and expected results, it is important to remark, once again, that
place matters, and Local Development Promotion policies are urgent to be apply in all the context of
localities and cities in developing countries, as it was seen in Letamendi parish.

14

BIBLIOGRAPHY
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Dicken, P. (1998) GLOBAL SHIFT. London: Paul Chapman. Chapter 1.
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GROWTH. World Bank.

16

ANNEX # 1
LETAMENDI PARISHS STRATEGIC PLAN
GOALS

STRATEGIES / PROJECTS

TARGET

ACTORS

New firm formation

Industrial electromechanical

Students of Don Bosco

-Don Bosco School

and stimulating

production center

School and

-Adveniat (German

male adults of sector

donor)*

Daily care center

Unemployed female adult

Maria Guare

Social events firm

of the sector

foundation*

Skill bank

Skilled unemployed youth

Don Bosco Church

emergence of
agglomeration

of the sector
Financing support

Small credit schemes

Small enterprises

services

BNF*
Fundacion Esquel

Supporting survival

Training and micro credits

60 (mostly) female owners

Huancavilca Fund*

economic activities

project

of small shops

Maquita Cushunchic

Increasing the value

Project of training in computer

The youth (18 30)

Don Bosco School

of the labour force

skills
Project of training in domestic

Young and adult women

Maria Guare

issues

(18 45)

Foundation*

Project of adult literacy

Illiterate adults

Ministry of education*

Accessing to house project

2 slums of the sector: one

Settlement

and improving housing

of black people, and the

improvement

situation

other one, in the poorest

zone

Providing services

Civil security project

Unemployed male adults of

Houses Christs
home*

Housing Gov.
Bonus

Local Gov.

the sector
Poverty alleviation

Primary public schools

Central Gov.

Children Nutrition Project

The black sector of parish

NGO donors

Third age assistance project

Abandoned old people

CEBs, CBOs
Junta de Beneficencia

17

ANNEX # 2
SOCIAL AND ECONOMIC INDICATORS OF ECUADOR
Source
Guayaquil
INDICATORS
DEMOGRAPHIC FACTS
INEC 90
Esperanza de vida al nacer
67 years
UNDP 96
HDI index3
-HEALTH INDICATORS
LCS 99
Infant cronic desnutricion (up to 6 years)(1x1000)
32%
INEC 90
IMR Infant Mortality Rate (up to 1 year) (1x1000)
30%
EDUCATIONAL INDICATORS
INEC
Adult Illiteracy (people more than 15 years)
4%
1999
Enrollment rate (primary level: 6 11 years)
90%
Enrollment rate (secondary level: 12 17 years)
68%
Enrollment rate (superior level: 18 24 years)
30%
Schooling years
8,8 years
WB 97
Repeaters
-ECONOMIC INDICATORS
BCE
Structure of Economy
1999
1st Sector (Agriculture and cattle)
4%
2nd Sector (Industry)
21%
Petroleum and minning
0%
Manufacturing
13%
Electricity
1%
Construction
7%
3rd Sector (Services)
60%
Commerce
23%
Transportation
5%
Financing services
5%
Personal and social services
27%
Others activities
15%
WD 98
GNP per capita
-INEC
Gross Labour participation
35%
1999
Unemployment4
17%
Worker Children without studying (8 17 years)
6%
Poverty: UBN index5
50%
UNDP 97
Poverty: HPI index6
-WDI 95
Poverty: People below the poverty line7
-BCE: Banco Central del Ecuador
HDP: Human Development Report
INEC: Instituto Nacional de Estadisticas y Censos - Ecuador
LCS: Living Conditions Survey
UNDP: United Nations Development Program, New York
WB:
World Bank
WDI: World Development Indicators Database, Washington

Ecuador

64 years
76%
45%
40%
12%
94%
82%
38%
6,7 years
3,5%

19%
33%
14%
16%
1,5%
2,5%
44%
14%
9%
8%
12%
4%
$1,310
35%
17%
12%
53%
15%
52%

3 HDI Human Development Index is an international measure of Development based on a calculation of Life
Expectancy, Adult Literacy and real GDP per capita of the country, made by the United Nations.
4 Unemployment is people who havent worked at least 1 hour during the week before of the survey.
5 UBN Unsatisfied Basic Needs index considers all the people who have at least one unsatisfied basic needs, as
an international measure.
6 HPI Human Poverty Index is an international measure of poverty, which follows the indicators of Human
Development described by the United Nations.
7 Measure of income poverty: People who earn less than $2 per day per person.

18

19