Economic outlook of Ecuador today – and what are the future prospects for the country?

Ecuador is a country open for business, and we are pursuing a strong trade agenda worldwide to show it. In late 2016, Ecuador finalized the adhesion protocol to the Multiparty Trade Agreement between the European Union and Colombia, Peru and Ecuador, and starting on 2017, this agreement has provided Ecuadorian companies with preferred access to the EU market, which Finland is a member of. Not only we have increased our trade ties with the EU, but with other countries and trade regional blocs worldwide. During the summertime of this year, Ecuador signed a Comprehensive Trade agreement with the European Free Trade Association EFTA, which will most likely enter into effect in 2019, bringing further market access to Europe. Our Ministry of Trade has also started negotiations with the Eurasian Economic Commission to explore a trade agreement between the trading bloc and our country.

One of the advantages of being a dollarized economy, is the stability we provide to foreign companies -and domestic companies for that matter - regarding currency fluctuation risk as well as being able to have one of the lowest inflation rate of the region. When companies know their investments in our country won’t change radically in value due to currency fluctuation, and that the country has a strong currency, it provides a long term stability, which investors value when looking for a new market to expand. Though Latin America has experience single digit growth rates in the past few years, Ecuador’s GDP growth rate has been one of the highest in the region. In the past ten years (2007-2017) the average GDP growth rate per year has been 7.3%. While there is plenty of work to do still, our economy is a growing one, and we’ll continue to work for increasing our growth on the years to come.

As we look into the future of our country, we are working to strengthen our already strong domestic infrastructure to provide additional competitive advantages to our people and companies. Not only does Ecuador has the second best highway system of the region -as mentioned by a recent infrastructure publication by the UN Economic Commission for Latin America and the Caribbean ECLAC – but we have renovated in the past decade our airport and port infrastructure. We understand that if companies want to become more competitive in our country, they need to have access to good infrastructure that allows them to reduce their logistic costs and connect them effortlessly to the world. Our country also places a great emphasis in the social and environmental aspects of our growth, making sure we have and excellent health care and education system for our population, so they can become active members of the economy. Our future growth also takes into consideration the rights of the environment and its protection, making sure our production is more sustainable every day and that we not only reduce our carbon footprint but also protect the diverse ecosystems located in Ecuador that are invaluable to the world. Above all, we want to promote this symbiotic relationship between the human being, the environment and the growth of our economy.

Which kinds of business opportunities are there for Finnish companies in Ecuador?

Finland has a immense know-how on diverse areas like forestry, ITC, industrial machinery, and logistics, which are areas we want to strengthen in Ecuador, were Finnish companies can be of great contribution. The importance in quality and sustainability is something that distinguishes Finnish companies, and our country strives for quality and sustainability as well, so there is a good potential for work in different areas.

We believe Ecuador can offer Finnish companies a broad range of high quality food products, both for final consumers and the food processing industry, due to our expertise and know-how in the agroindustry sector. In Finland and the Nordics we’ve seen an exponential growth of the healthy food segment, where we can play an important role due to our offer of superfoods like quinoa, chia and amaranth; dried and freeze-dried fruits; snacks that use plantain chips, cassava chips or coconut chips; and many other foods and ingredients that complements the Finnish food diet. Our Ministry of Trade recently launched a catalogue of our certified food industry, as the markets now required more products that are organic, fair trade and sustainable produced. Ecuador is also a producer of high-quality coffee, and as Finland is the bigger consumer of coffee per capita in the world, we can definitely bring the exotic flavors and aromas of Ecuadorian coffee to the Finnish market.

Please, also explain us which kinds of investment opportunities there are for Finnish companies in Ecuador?

Ecuador is a republic of opportunities, were companies can explore different investment areas depending on their interests, ranging from the food sector to tourism and strategic sectors like mining and paper pulp.

One of the prioritized sectors in Ecuador is the forestry sector, and we have a growing cluster of companies that work in the particle board industry, wooden-furniture industry, the paper and soft-fiber industry, and now companies are exploring the paper mill industry and the paper pulp industry. This is an area where we have actively been working to attract Finnish companies to explore Ecuador for an investment destination, due to their extensive experience in the forestry industry.

The food sector is very attractive as well, due to our availability of high-quality raw materials produced in Ecuador; qualified labor in the field, and cluster expertise for producing diverse food products. Ecuadorian companies have an assorted portfolio of products like snacks, chocolate, frozen food products, dried and freeze-dried fruits, preserved vegetables, frozen seafood, canned tuna, just to mention a few, and they are always looking for international partners interested in investing in their industries.

Our Ministry of Trade has a live catalogue of investment projects in Ecuador that is updated constantly, which provides a good insight of the diverse opportunities our country offers. Above all we can offer Finnish companies specific advice and tailor-made agendas to visit Ecuador to find these opportunities though our Commercial Office in Stockholm, which are open and available to answer any inquiries Finnish companies might have when exploring investment opportunities in our country.

There is a new law on investments, isn’t there?

There is. In August of this year, the National Assembly of Ecuador passed a new organic law to promote production and employment in Ecuador, which includes among other things new incentives to attract foreign and domestic investment. Our country understand the importance Foreign Direct Investment plays in the economic development of a country, and that is why these new incentives – additional to the ones already in place by our Organic Code of Production - can help companies take that leap to explore Ecuador for new investments or to keep growing their current investments.

The main incentive introduced by this law is the no payment income tax for up to 12 years for new investments in prioritized sectors or 15 years for basic industries sectors. Our Ministry of Trade has published a summary of these incentives in their website, which can be found in the following link:

https://www.comercioexterior.gob.ec/ley-organica-para-el-fomento-productivo-atraccion-de-inversiones-generacion-de-empleo-y-estabilidad-y-equilibrio-fiscal/

It is important to mention that our Organic Code of Production allows companies to sign an investment contract with the Ecuadorian government, which freezes over time the incentives in the law, and provide additional legal security to foreign investments with clauses of international arbitration.

Ecuador and free trade agreements – how Ecuador has benefited from them?

Our economy, but most importantly our people, have benefitted by having new markets or existing markets with preferred access to position Ecuadorian products. As exports are one of the main drivers of our economy, there is a direct correlation between new exports to employment generations, innovation, company expansions, and the growth of new clusters. Now only it contributes with new direct employment but with indirect employment in support areas as logistics, packaging, marketing, design, etc.

To talk more specifically about the trade agreement between Ecuador and the European Union, the agreement has brought advantages to both sides. After its entry into effect (January 1 of 2017), the bilateral trade grew 20% for the period 2016-2017, which is an extraordinary result for the first year of the agreement. More importantly, thanks to the agreement 450 new Ecuadorian companies began to export to the EU, and we introduced as well 200 new products that were previously not exported to the European market. In the period 2016-2017, the Ecuadorian exports to the EU grew at 11%, generating an income of approximately USD 3.2 billion dollars to the Ecuadorian economy. The exports of the EU to Ecuador in the same period grew at 35%.

Which regions or places you would recommend tourist to visit and which kinds of leisure activities you have to offer in Ecuador?

Ecuador, with a relative small territory compared with other South American countries, offers an enormous variety of touristic and cultural places, cities and natural landscapes. From the wonders of the unique Galapagos Islands, to the Amazonian rain forest, there are locations and towns of an unparalleled beauty and deep heritage. Cloud forests, colored markets, wildlife and colonial historic cities can be visited in few days or in weeks.

Quito, the capital city, was the first city in the world to be inscribed in the Cultural Heritage list of UNESCO in 1978. Our capital has the most well-preserved historical downtown of all South America and offers a good variety of restaurants and cultural activities. From there, the visitors can go north to Otavalo and be delighted with its colorful indigenous market and enjoy the view of the Cuicocha and Mojanda lagunas (lakes), can go south to the astonishing highlands of Cotopaxi and Chimborazo volcanoes and the breathtaking town of Baños de Agua Santa on the skirts of Tungurahua volcano, can go west to the magnificent cloud forest of Mindo and go east to the Amazon region where the exuberant rainforest evolves the visitor while the more daring can practice rafting or cannoning. The Amazon offers several lodgings in the middle of the jungle, an ideal place to see the local wildlife.

There are places in the Ecuadorian Andes that nature and cultural connoisseurs should not miss: exploring the city of Riobamba, riding the train through the engineering-marvel of the Nariz del Diablo railroad, hiking the mountainous landscape of the Quilotoa Loop, climbing the Chimborazo volcano (the farthest point of the world from the center of earth), or the Altar mountain, relaxing at the lake of Colta, adventuring in the Sangay and Podocarpus National Park, just to mention a few. Cuenca -the cultural city of southern Ecuador- as well as Cajas National Park and Ingapirca ruins, constitutes places of unique beauty.

For the lovers of beaches and beach sports, Ecuador offers a wide range of seaside places and extraordinary seafood restaurants. There are whale watching tours during several months of the year.

The Ecuadorian Amazon is worth visiting too: the Wildlife reserve of Cuyabeno and the lower Rio Napo where jungle lodges can be found, offers visitors wildlife-watching on hikes, canoe adventures and jungle canopy.

The Galapagos Island is a place, inscribed in the World Natural Heritage List of UNESCO, with unique wildlife, extraordinary views and astonishing geological volcanic islands.

Ecuador is a true jewel for tourism. In few hours a visitor can go from the warm rainforest or the coast area, to the cold highlands of the Andes and in the way observe the infinites changes of plants, animals and climate.

As we look into the future of our country, we are working to strengthen our already strong domestic infrastructure to provide additional competitive advantages to our people and companies. Not only does Ecuador has the second best highway system of the region -as mentioned by a recent infrastructure publication by the UN Economic Commission for Latin America and the Caribbean ECLAC – but we have renovated in the past decade our airport and port infrastructure. We understand that if companies want to become more competitive in our country, they need to have access to good infrastructure that allows them to reduce their logistic costs and connect them effortlessly to the world. Our country also places a great emphasis in the social and environmental aspects of our growth, making sure we have and excellent health care and education system for our population, so they can become active members of the economy. Our future growth also takes into consideration the rights of the environment and its protection, making sure our production is more sustainable every day and that we not only reduce our carbon footprint but also protect the diverse ecosystems located in Ecuador that are invaluable to the world. Above all, we want to promote this symbiotic relationship between the human being, the environment and the growth of our economy.

Which kinds of business opportunities are there for Finnish companies in Ecuador?

Finland has a immense know-how on diverse areas like forestry, ITC, industrial machinery, and logistics, which are areas we want to strengthen in Ecuador, were Finnish companies can be of great contribution. The importance in quality and sustainability is something that distinguishes Finnish companies, and our country strives for quality and sustainability as well, so there is a good potential for work in different areas.

We believe Ecuador can offer Finnish companies a broad range of high quality food products, both for final consumers and the food processing industry, due to our expertise and know-how in the agroindustry sector. In Finland and the Nordics we’ve seen an exponential growth of the healthy food segment, where we can play an important role due to our offer of superfoods like quinoa, chia and amaranth; dried and freeze-dried fruits; snacks that use plantain chips, cassava chips or coconut chips; and many other foods and ingredients that complements the Finnish food diet. Our Ministry of Trade recently launched a catalogue of our certified food industry, as the markets now required more products that are organic, fair trade and sustainable produced. Ecuador is also a producer of high-quality coffee, and as Finland is the bigger consumer of coffee per capita in the world, we can definitely bring the exotic flavors and aromas of Ecuadorian coffee to the Finnish market.

Please, also explain us which kinds of investment opportunities there are for Finnish companies in Ecuador?

Ecuador is a republic of opportunities, were companies can explore different investment areas depending on their interests, ranging from the food sector to tourism and strategic sectors like mining and paper pulp.

One of the prioritized sectors in Ecuador is the forestry sector, and we have a growing cluster of companies that work in the particle board industry, wooden-furniture industry, the paper and soft-fiber industry, and now companies are exploring the paper mill industry and the paper pulp industry. This is an area where we have actively been working to attract Finnish companies to explore Ecuador for an investment destination, due to their extensive experience in the forestry industry.

The food sector is very attractive as well, due to our availability of high-quality raw materials produced in Ecuador; qualified labor in the field, and cluster expertise for producing diverse food products. Ecuadorian companies have an assorted portfolio of products like snacks, chocolate, frozen food products, dried and freeze-dried fruits, preserved vegetables, frozen seafood, canned tuna, just to mention a few, and they are always looking for international partners interested in investing in their industries.

Our Ministry of Trade has a live catalogue of investment projects in Ecuador that is updated constantly, which provides a good insight of the diverse opportunities our country offers. Above all we can offer Finnish companies specific advice and tailor-made agendas to visit Ecuador to find these opportunities though our Commercial Office in Stockholm, which are open and available to answer any inquiries Finnish companies might have when exploring investment opportunities in our country.

There is a new law on investments, isn’t there?

There is. In August of this year, the National Assembly of Ecuador passed a new organic law to promote production and employment in Ecuador, which includes among other things new incentives to attract foreign and domestic investment. Our country understand the importance Foreign Direct Investment plays in the economic development of a country, and that is why these new incentives – additional to the ones already in place by our Organic Code of Production - can help companies take that leap to explore Ecuador for new investments or to keep growing their current investments.

The main incentive introduced by this law is the no payment income tax for up to 12 years for new investments in prioritized sectors or 15 years for basic industries sectors. Our Ministry of Trade has published a summary of these incentives in their website, which can be found in the following link:
https://www.comercioexterior.gob.ec/ley-organica-para-el-fomento-productivo-atraccion-de-inversiones-generacion-de-empleo-y-estabilidad-y-equilibrio-fiscal/

It is important to mention that our Organic Code of Production allows companies to sign an investment contract with the Ecuadorian government, which freezes over time the incentives in the law, and provide additional legal security to foreign investments with clauses of international arbitration.

Ecuador and free trade agreements – how Ecuador has benefited from them?

Our economy, but most importantly our people, have benefitted by having new markets or existing markets with preferred access to position Ecuadorian products. As exports are one of the main drivers of our economy, there is a direct correlation between new exports to employment generations, innovation, company expansions, and the growth of new clusters. Now only it contributes with new direct employment but with indirect employment in support areas as logistics, packaging, marketing, design, etc.

To talk more specifically about the trade agreement between Ecuador and the European Union, the agreement has brought advantages to both sides. After its entry into effect (January 1 of 2017), the bilateral trade grew 20% for the period 2016-2017, which is an extraordinary result for the first year of the agreement. More importantly, thanks to the agreement 450 new Ecuadorian companies began to export to the EU, and we introduced as well 200 new products that were previously not exported to the European market. In the period 2016-2017, the Ecuadorian exports to the EU grew at 11%, generating an income of approximately USD 3.2 billion dollars to the Ecuadorian economy. The exports of the EU to Ecuador in the same period grew at 35%.