Ladies and gentlemen, distinguished members of the audience, friends of the Harvard Club, I am here today to reframe your perception about Ecuador as a country, and tell you, show you, the reality of a government that working to shape a new country paradygm. KEY WORDS: REAL TIME – YOU DECIDE – IMAGINE -
Alusion al centro del planeta – epicenter of business
The Ecuadorian Economy has expanded at an average of 4.5% over the past ten yearas, while the non oil economy grew 5% annually during the same period
Ecuador has a high growth potential thanks to high investment rates. Above 21% average of Latin America. Gross fixed capital formation ( GFCF)
Agregar un comparativo con unemployment in other latin american countries.
Noticeable drop in poverty rate within rural areas, especially for afro-Ecuadorians, women, and the sub-employed
The poorest now have access to credit and other financial instruments to get out of poverty
Stimulating productive transformation
4 new regional aiports: Tena, Santa Rosa, Macas, Lago Agrio, renovation of 1 international (Latacunga). Delegation of Baltra in Galapagos Island. USD.208 ’ 000.000 invertidos en: Rehabilitación de 10 aeropuertos. Construcción Integral de los aeropuertos Santa Rosa y Tena. Nuevos sistemas de navegación aérea. Concesión del aeropuerto ecológico de Baltr
AHORA: entre 2007 y junio 2011:133 Puentes, 7.530 m. Inversión: USD 401 millones MEGAPUENTES: 1.- Puente Segmental Sobre el Río Babahoyo 1.975m. 2.- Bahía San Vicente 1.980m. 3.- Estuario sobre el Río Esmeraldas 434m. 4.- Napo 590m.
Presentación de la Ministra Nathalie Cely en el Simposio Global de Inversiones “Caminos a la Prosperidad”, organizado por el Club Harvard de Nueva York. 20 de septiembre de 2011
Ecuador, The Center of Great Opportunities for Ethical Investment New York City- Harvard 4 th . Annual Global Investment Symposium “ Pathways to Prosperity ” September 20th, 2011
<ul><li>Developing an improved model for the quality of life of our people is at the core of all public policy. </li></ul><ul><li>Ecuador takes care of its people. We believe that the economy should be at the service of its citizen. </li></ul><ul><li>Ecuador respects the rights of all: citizens, investors and nature. We are working to create a balance that allows for all ecuadorians to reap the benefits from social and economic development. </li></ul><ul><li>Ecuador fosters social cohesion as an essential element for stability. </li></ul>Ecuador´s unique development model
Ecuador is at the center of great business opportunities
Ecuador is at the center of great business opportunities
<ul><li>Strong internal demand </li></ul><ul><li>Growth of exports: 15% </li></ul><ul><li>Transformation of energy matrix will save an estimated USD $4 billion per year (6% of GDP). </li></ul><ul><li>Productive Transformation Agenda is fostering value added production. </li></ul><ul><li>Wealth of natural resources will generate estimated investments of USD $5 billion. </li></ul><ul><ul><li>Copper and Gold and other metal´s exports will increase an estimated USD $2 billion annually . </li></ul></ul>Ecuador: a vibrant Economy
Diversified export markets Index of concentration of total exports
<ul><li>Ecuador Results: </li></ul><ul><ul><li>Non-petroleum exports: -2.7% </li></ul></ul><ul><ul><li>Total exports: -26% </li></ul></ul><ul><ul><li>Fall in remittances: -11% </li></ul></ul><ul><ul><li>Foreign investment: No change </li></ul></ul>Ecuador performed better than regional average during 2009 crisis 4 contagion channels of the international crisis for Latin America Source: ECLAD
<ul><li>Sound macroeconomic policies with public debt of only 24% of GDP. </li></ul><ul><li>Low degree of financial leverage and solid and liquid financial system. </li></ul><ul><ul><li>Deposits exceeds receivables </li></ul></ul><ul><li>Lower dependence (25%) of oil revenues as a total of government public spending budget thanks to the increase of more than 4% of GDP in fiscal revenues. </li></ul><ul><li>Dollarized economy with sustained macroeconomic stability and low inflation rate. </li></ul><ul><li>A secure environment in which to conduct business, thanks to economic stability, social cohesion and clear rules, all endorsed by the Production Code. </li></ul>Ecuador: a stable and safe country for private investment
Low level of financial leverage – Not a highly leveraged economy Source: CBE
Ecuador offers a solid and reliable economy, with low levels of public and private debt. Not a highly leveraged economy Source: CBE
Fiscal Income as a % of GDP grew 4% during the last four years. Progressive tax system. Source: CBE
Reduced dependence on oil revenues: 24% Contribution to fiscal budget 2011 by type of income
<ul><li>One of the lowest unemployment rate of the region: 5% </li></ul><ul><li>Ecuadorians have a higher quality of life through higher purchase power and improved public services. </li></ul><ul><li>Reduction of poverty and inequality. </li></ul><ul><li>An educated and healthy population furthers social cohesion, stability and labor productivity. </li></ul><ul><li>Over the past four years: </li></ul><ul><ul><li>College enrollment rate has increased form 22.9% to 28.3% </li></ul></ul><ul><ul><li>2010: 1,070 scholarships granted for international MBA and PH.D in technical fields. Goal in 2013 is 7,000 scholarships. </li></ul></ul><ul><li>Between 2006 and 2011, Government has tripled public health investment. </li></ul>Great Social Cohesion and Human Talent
One of the lowest unemployment rates in Latin America Monthly Unemployment urban rates, several countries Source: INEC
Significant investment in human talent 6X Fair and equal scholarship opportunities for MBA and Ph.D´s abroad Increased financial support and greater access to education Source: SENPLADES Investment in graduate scholarships More time to pay loans (number of years)
Countrywide telecommunications and information technology coverage. Expansion of telecommunication services Sources: Ministry of Telecommunications and Informational Society STA. ELENA SALINAS PUERTO LOPEZ MANTA PORTOVIEJO STO DOMINGO QUEVEDO MACHALA HUAQUILLAS ESMERALDAS EL PANGUI S.P. COFANES SHUSHUFINDI MACAS PUYO TENA COCA NUEVA LOJA GRAL. L. PLAZA SUCUA MENDEZ YANZATZA GUALACEO CUMBARATZA TOTORAS GUAYAQUIL TULCÁN IBARRA QUITO LATACUNGA AMBATO RIOBAMBA AZOGUES CUENCA GUARANDA BABAHOYO 2006:1,413 km of fiber optics 2011: 6,780 km of fiber optics 23 provinces
General Investment Incentives Reduction of Income Tax (IT) rate: Reduction from 25% to 22%. 1% each year beginning in 2011. Exemption from the minimum Income Tax calculation for incremental expenses for new jobs or salary increases, purchases of new assets for productivity and technology improvements, cleaner production . For new companies: exemption from the minimum tax payment for the first 5 years. Exemption from Currency Outflow Tax (ISD) for payments sent overseas to pay foreign loans, with a term of over one year and at a rate not higher than that authorized by the Ecuadorean Central Bank (BCE).
Incentives for New Investment in Priority Sectors Tax Holiday for first 5 years Fresh and Processed food Metal Works Petrochemical <ul><ul><li>Tourism </li></ul></ul>Strategic import substitution and export -fostering sectors are also beneficiaries of this incentive. www.mcpec.gob.ec <ul><ul><li>Pharmaceuticals </li></ul></ul><ul><ul><li>Renewable </li></ul></ul><ul><ul><li>energy </li></ul></ul>Logistics Services Biotechnology and Applied software Forestry and Agroforestry chain, and resulting manufactured products
Incentives for SME National Guarantees Fund for SME. Benefits to access the stock market. Co-financing programs for development of SME´s (innovation, quality, entrepreneurship). Support programmes to encourage exports from SME´s.
Incentives to foster SME productivity Extra income tax deductions for expenditure and investments in the following items: Technical training geared towards R&D and innovative technology (up to 1% of the annual wage and salary expense s ). Expenditures toward improving productivity (up to 1% of sales). Expenditures on the international promotion of the company and its products (up to 50% of promotional and advertising expenses).
Green Production For Income Tax calculation purposes, there will be an additional deduction of 100% from the expense of purchasing machinery and equipment for cleaner production and for the implementation of renewable energy systems (solar, Aeolic, or similar).
Special Economic Development Zones A further reduction of 5 percentage points on Income Tax for managers and operators of ZEDE on a permanent basis (17% total). If said managers and operators are in a Preferential Sector and it is new investment, 0% income tax applies for 5 years. The import of goods will have a 0% VAT rate. Foreign goods, while they remain in said territory, will have no tariff payments. Managers and operators will have tax credit on the VAT paid on their local purchases of services, supplies, and raw materials for their production processes. Exemption from the Currency Outflow Tax (ISD in Spanish) for payment of imports and payments sent overseas to pay foreign financing.
Incentives for private companies to offer employees stock ownership programs Companies choosing to open up their capital structure and offer shares to their workers, will have the following benefits: <ul><ul><li>Deferment of 5 years on Income Tax and IT Anticipated payments. </li></ul></ul><ul><ul><li>Interest exemption on loans taken for financing the purchase of shares </li></ul></ul>
Incentives for investing in depressed areas Companies making investments in economically depressed areas may take advantage, for the first 5 years, of the additional 100% deduction on expenditure for new jobs created in the area. Priority given to productive investment. A “ depressed area ” will be defined by indicators, such as lower human, economic, and social development.
Private investment protection Incentives Agreed arbitration Investment contracts Safe Investment All these instruments of Ecuadorean Law work together to protect private investment
Public and Private Partnership towards competitiveness: Productive Transformation Agenda
<ul><li>Production Transformation Agenda 2010-2015 </li></ul><ul><li>Production Code 2011 </li></ul><ul><li>25 Provincial Productive Agendas </li></ul><ul><li>Logistic National Agenda </li></ul><ul><li>Innovation National Agenda </li></ul><ul><li>21 Competitiveness Sectorial Plan </li></ul>Public and Private Partnership geared toward fostering competitiveness
The most mega-diverse compact country of the world
<ul><li>Ecuador is the most mega-diverse compact country of the world and earths eco-center. </li></ul><ul><li>When you visit Ecuador for a week, it is like exploring all Latin America in 7 days. </li></ul><ul><li>Because of its location, Ecuador has strong comparative advantages. </li></ul><ul><ul><li>Its geography and luminosity allows for high-yielding productivity and the potential to grow crops year around. </li></ul></ul><ul><ul><ul><li>International reputation for the worlds finest roses, cacao ¨fino de aroma¨, shrimp and bananas among others. </li></ul></ul></ul><ul><li>It is a natural biodiversity laboratory with great potential for biotechnology applications. </li></ul>Ecuador's´ unique mega-diversity
Cuenca and Quito: Cultural World Heritage Cities Sangay National Park
For several consecutive years, Ecuador has been ranked in First Place as a best place to retire Source: International Living magazine
USD $5 BILLION ENERGY AND OIL REFINERY INVESTMENT OPPORTUNITIES
<ul><li>Installed capacity </li></ul><ul><li>2016 </li></ul><ul><li>3.770MW 6.779MW </li></ul>Significant investment opportunities for energy generation projects In 2016, we expect to double the country´s installed capacity, with an investment of USD $5 billion.
Energy Matrix Change <ul><li>Amistad Field-Term gas El Oro </li></ul><ul><li>Liquefying plant </li></ul><ul><li>LPG storage at Monteverde </li></ul><ul><li>Substitution of diesel for natural gas. </li></ul>
Benefits: Import reduction: USD $3 Billion per year Construction jobs: Direct 25,000 Operations jobs: Direct: 2,500 Indirect: 10,000 Source: Ministry of Electricity and Renewable Energy Pacific Refinery
Job generation: Direct: 7,200 Indirect: 25,000 Estimated investment: US.$ 5,1 billion The Mining Sector is being responsibly reactivated under the principles of sustainability and efficiency. Source: Ministry of Electricity and Renewable Energy Mining
USD $6 BILLION INFRASTRUCTURE DEVELOPMENT PLAN 2011-2013
Sto. Domingo-Quevedo Manta-Guayaquil-Sta. Elena Naranjal-Huaquillas Highways available for concession Puerto Marítimo
Ports and Airports Seaports: 2011- 2012 Manta Esmeraldas 2013 Puerto Bolívar Airports: 2011 Baltra: already granted 2012 – 2013 Manta Latacunga Tena Santa Rosa
Investment US$1,527 millions Irrigation and Flood Control Projects The national government is investing in public works projects with an focus to will ensure the vital cycle of water, its quality and fair distribution, human consumption, its responsible use, and return to its sources. By 2013, construction of 9 projects will start