The Economy of Ecuador

Ecuador is beginning to recover from the aftermath of recent natural disasters which included a large earthquake, floods and landslides.

Ecuador was named after the equator which runs through the country, the only country in the world named after a geographical feature. Its official name, República del Ecuador, literally means “the Republic of the Equator”.

Currently, European operators are eyeing Ecuador’s tourism potential as they consider investing up to $850 million in Ecuador’s hotel infrastructure.

Ecuador Business News:

Banco FINCA Ecuador receives Smart Certification for its commitment to client protection

QUITO, Ecuador and WASHINGTON
April 18, 2018 /PRNewswire
Banco FINCA Ecuador, FINCA Impact Finance’s subsidiary in Ecuador, announced it received Smart Certification. The certification comes after a rigorous independent review process found the bank has consistently upheld the highest client protection standards in providing financial products and services. Banco FINCA Ecuador joins FINCA subsidiaries in Georgia, Kosovo, Kyrgyzstan, Nicaragua and Pakistan in receiving Smart Certification for its ongoing commitment to client protection.

The Smart Campaign is a global initiative to promote stronger client protection standards in the microfinance industry.

The Smart Campaign, an initiative of The Center for Financial Inclusion at Accion, is a global effort to unite microfinance leaders around a common goal: to keep clients as the driving force of the industry.

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April 3, 2018

Ecuador’s Lenín Moreno opens country to Private Enterprise
Ecuador’s president Lenín Moreno calls for ‘private sector to invest’ is a further departure from his socialist roots.

Ecuador’s president Lenín Moreno has announced a package of economic measures that aims to pare back the country’s bloated state apparatus and promote private enterprise, in a further departure from his socialist roots.

Mr Moreno said his government would embark on a programme of public-private partnerships in the infrastructure, oil, energy, mining and telecoms sectors that would generate $7bn of investment by 2021, raising $1.6bn for state coffers.

Seven of Ecuador’s 22 state companies would be liquidated and the others may be opened up to private investment, he said. All of which is positive news for investment firms and companies wanting to do business with Ecuador.

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Feb. 6, 2018

Ecuador Vote Paints Mixed Picture For Business, Extractives Sector
President Lenín Moreno was recently elected as the new president of Ecuador. But while the government is perhaps more committed than ever to improving the overall business environment, investors will continue to face challenges in Ecuador going forward.

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Mining: Ecuador gets Best Country of the Year award
Ecuador was awarded the Mining and Money America’s Outstanding Achievement Awards in Toronto, Canada.  This comes as the government embarks on a rigorous plan to encourage $4.6 billion (US) in investment in the mining industry during the next four years. Most of this will come from direct foreign investment in three mines: Mirador, Fruta del Norte and Rio Blanco, supported by newer projects.

Mining: Ecuador gets Best Country of the Year award

Oil Industry Transparency
Ecuadorean President Lenín Moreno’s administration in late August said it is commissioning a foreign auditing firm to look over the technical and financial terms for five oil-sector projects that have had serious operational failures despite large investments.
Santiago Mosquera, professor at USFQ Business School:
News in the oil sector is positive. From the appointment of Hydrocarbons Minister Carlos Pérez to the most recent results of a bidding process for small oil fields, there is plenty of evidence that the sector is likely to improve under the administration of President Lenín Moreno.

http://www.latinvex.com/app/article.aspx?id=3421

The economy of Ecuador is based mostly on exports of oil, bananas, shrimp, gold, other primary agricultural products and money transfers from nearly a million Ecuadorian emigrants employed abroad. In 2002, oil accounted for about one-third of public-sector revenue and 40% of export earnings. Ecuador is the world’s largest exporter of bananas ($936.5 million in 2002) and a major exporter of shrimp ($251 million in 2002). Exports of non-traditional products such as flowers ($291 million in 2002) and canned fish ($333 million in 2002) have grown in recent years. Industry is largely oriented to servicing the domestic market.

https://en.wikipedia.org/wiki/Economy_of_Ecuador

Between 2006 and 2014, GDP growth averaged 4.3 percent, driven by high oil prices and substantial external financing. This stimulus enabled increased social spending and important investments, especially in the energy and transportation sectors. During that period, poverty declined from 37.6 percent to 22.5 percent.

A more robust, flexible private sector will allow the economy to be diversified, increase productivity and create quality jobs, which will in turn promote development and continue to reduce poverty.

http://www.worldbank.org/en/country/ecuador/overview

Ecuador borders Colombia and Peru by land and Costa Rica by sea and is a favorite stop for tourists seeing natural beauty.

Ecuador is a country with vast natural resources, beauty and cultural wealth. Ecuador is teeming with an abundance of hundreds of thousands of species of flora and fauna. Ecuador is a country straddling the equator on South America’s west coast. Its diverse landscape encompasses Amazon jungle, Andean highlands and the wildlife-rich Galápagos Islands. Besides visiting the Andean mountains, the Amazon and the Galapagos Islands you can visit Mitad del Mundo which is call the “Center of the World”. This site was inaccurately marked since according to readings based on the World Geodetic System WGS84, used in modern GPS systems and GIS products, the equator actually lies about 240 meters north of the marked line.

centeroftheworld

Products

  • Coffee
  • Flowers
  • Oil
  • Fish
  • Bananas
  • Shrimp
Currency: United States Dollar
GDP per capita: 5,968.98 USD (2016) World Bank
Gross domestic product: 97.8 billion USD (2016) World Bank
GNI per capita: 11,070 PPP dollars (2016) World Bank
GDP growth rate: -1.5% annual change (2016) World Bank
Gross national income: 181.4 billion PPP dollars (2016) World Bank
Internet users: 31.4% of the population (2011) World Bank

The Ecuadorian economy accelerated in the first quarter of the year, recording a second consecutive quarter of growth in annual terms. The acceleration was largely fueled by stronger domestic demand, thanks to healthy private consumption and total investment growth. While positive at first glance, the acceleration was actually largely due to a favorable base effect following 2016’s GDP contraction. Indeed, in sequential terms the economy contracted in Q1, reflecting the difficulties the government is having in addressing the economy’s lingering vulnerabilities. In light of the economy’s fragile performance and given the government’s heavy reliance on expensive external financing to fund its current spending, S&P Global Ratings downgraded Ecuador’s credit rating to B- with a stable outlook, down from B.

http://www.focus-economics.com/countries/ecuador

The Fall of Oil Prices has hurt the Economy

50% of its exports and 30% of its government revenues come from oil but the dramatic fall in oil prices in recent years has hurt the government Ecuador and its economy.

Ecuador is the 69th largest export economy in the world and the 96th most complex economy according to the Economic Complexity Index (ECI). In 2015, Ecuador exported $19.5B and imported $21.1B, resulting in a negative trade balance of $1.64B. In 2015 the GDP of Ecuador was $100B and its GDP per capita was $11.5k.

http://atlas.media.mit.edu/en/profile/country/ecu/

Helping to Fight Poverty through Micro Financing

With low default rates, micro financing has gathered attention and positive momentum as a new way to help poor families and businesses in Ecuador and South America grow their business and put food on the table. Strategic Global Capital is focusing on empowering partner Micro Finance Instituions to grow quickly while providing individuals in their community the financial opportunities to develop and contribute to global prosperity. Micro Financing helps individuals obtain the financial resources they need to live and prosper.

> Learn More about Micro Finance