26-27 October Paper submitted by. Econ. Eva García Fabre Minister of Industry and Productivity of Ecuador
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1 Multi-year Expert Meeting Enhancing the Enabling Economic Environment at all Levels in Support of Inclusive and Sustainable Development, and the Promotion of Economic Integration and Cooperation October 2017 Enhancing the Enabling Economic Environment at All Levels in Support of Inclusive and Sustainable Development, and the Promotion of Economic Integration and Cooperation Paper submitted by Econ. Eva García Fabre Minister of Industry and Productivity of Ecuador. This expert paper is reproduced by the UNCTAD secretariat in the form and language in which it has been received. The views expressed are those of the author and do not necessarily reflect the view of the United Nations.
2 Enhancing the Enabling Economic Environment at All Levels in Support of Inclusive and Sustainable Development, and the Promotion of Economic Integration and Cooperation Econ. Eva García Fabre Minister of Industry and Productivity of Ecuador 1
3 Ecuador: Advantages Geographical conditions Unique place for diverse and permanent resources supply. Mega environmental, climate and ethnic diversity. Strategic Infrastructure High level, connected and in the middle of the world Development model Aligned to the Millennium development goals. Focus on the development of talent and knowledge. Economic growth with significant reduction of poverty and social inequity. Productive Ethics Occupational and environment Investment opportunities Constitutional and institutional security. One of the lower tax rates for businesses in the region. Investment attraction regulations 2
4 Ecuador: General information Population of Ecuador: 16,6 million people. Economic and active population: 8,2 million people. GDP: USD in 2016 (World Bank) Human development Index : High position, place 89 (UN) 3
5 Ecuador: Poverty and Inequality indicators 0.60 dic Dec-07 0,553 Gini Index for National income Dec-15 0,476 dic dic dic-07 jun-08 dic-08 dic-09 jun-10 dic-10 jun-11 dic-11 jun-12 dic-12 jun-13 dic-13 mar-14 jun-14 sep-14 dic-14 mar-15 jun-15 sep-15 dic-15 jun-16 dic-16 jun-17 Gini idex - National Dec-16 0,4660
6 Ecuador: Productive structure (year 2016) Others; [VALUE] Agriculture and fishing; [VALUE] Other services; [VALUE] Oil and mines ; [VALUE] Manufacturin g with Oil Refining; [VALUE] Total GDP: USD 69.3 thousand millions (base year 2007) Finance services; [VALUE] Transport; [VALUE] Commerce; [VALUE] Building; [VALUE] Fuente: BCE 5
7 Ecuador: Export structure (year 2016) Total exports: USD Millions Manufactured from coffee [PERCENTAGE ] Others (Non traditional exports) [PERCENTAGE ] Crude Oil [PERCENTAGE ] Tuna and fish [PERCENTAGE ] Cocoa and manufactured from cocoa [PERCENTAGE ] Shrimp [PERCENTAGE ] Banana and plantain [PERCENTAGE ] Fuente: BCE 6
8 Ecuador: New platform for systematic competitiveness Multi-purpose Project 182 thousand hectares for water irrigation 142 thousand hectares for floods control Telecommunications Conectivity forty times faster than the year Optical fiber (public-private) extended from 2174 miles (3500 km) to miles (59861 km). 1 from each 2 ecuadorians has access to Internet Human capital Logistic Investment of 2% from GDP for higher education. Improvement of quality in universities 20 thousands scholarships given to ecuadorians for studies in foreing countries. 94% the road network in good condition New ports, airports and craft Markets Force and negotiating trade agreements correspond to 57% of exports of industrial goods. Creation of PROECUADOR for promotion of exportable goods and services, and attraction of investments. Energy Ecuador has incremented twice its installed capacity in generating clean energies for the industries, from MW to MW (from 2006 to 2017). 7
9 Ecuador: Global Competitiveness Index Score Ecuador: Global Competitiveness Index (Score & ranking) Ranking Score ICG : Comparison Ecuador against to the region Sophistication of business Size of the market Available Technology Ecuador Innovaion Institutions Latin american & Caribbean Infrastructure Macroeconomic environment Health and primary school High education and capacitation Puntuación Score Ranking Finance market Market efficiency and development goods Market efficiency and occupatinal Fuente: Global Competitiviness Report Source: World Economic Forum - Global Competitiveness Report
10 Ecuador: Insertion into global value chains Gourmet Coffe Chocolate TOAK Shrimp Software 9
11 Industrial Policy of Ecuador VISION: In 2025, Ecuadorian production diversifies, differentiates and is inserted into the world with higher value-added manufacturing and services, through innovative, competitive companies with world-class standards and maximizing the platform for systemic competitiveness generated. Entrepreneurship and innovation Quality Productivity Investment Market Promoting Ecuadorian production 10 10
12 Ecuador: Ranking between Global innovation Index components (127 contries) Institutions Production of technology and knowledge Business Sophistication Human Capital and Research Infrastructure Market Sophistication Creative Production Source: Global Innovation Index Report, Entrepreneurship and Innovation Latin America and the Caribbean: Ranking of the Global Innovation index* Ecuador is located at the 92 position between 127 countries according to the Global Innovation Index Bolivia Honduras El Salvador Guatemala Ecuador Ecuador Trinidad y Tobago Paraguay Jamaica Rep. Dominicana Argentina Perú Brasil Uruguay Colombia Panamá México Costa Rica Chile Its main weaknesses lie in the dimensions of institutions and production of technology and knowledge. Source: Global Innovation Index Report, * With respect to 127 countries
13 Investment Private and investment have increased in recent years. However, public investment grew in greater magnitude than private investment specially for the years 2013 and Ecuador: Public-private Gross fixed-capital formation (in millions of USD) % % 118% 140% 120% % % 88% 79% 75% 87% 83% 79% 80% % % 44% 38% 41% 37% 46% 48% 40% % 25% 20% 0 0% GFCF FBKF Public Pública sd 2015 p FBKF GFCF Privada Private Relation GFCF Public / GFCF Privada 2016 prel 2017(prev) Fuente: Banco Central del Ecuador Source: BCE 12
14 Productivity Evolution of Average Labor Productivity The Average Labor Productivity of the industry has decreased since the year The Average Labor Productivity of the economy registers two consecutive years of degrowth. Miles de USD ,1 7, (prev.) Average Labor Productivity of the industry Productividad media laboral de la industria Productividad Average Labor Productivity media laboral of the economy de la economía Source: Monthly Statistics Report, BCE. National Employment and Unemployment Survey, INEC 13
15 Quality 36% of the Ecuadorian technical regulations have a conformity assessment organizations that ensures compliance. National producers who must demonstrate the quality of their products must send abroad to carry out the required tests which raises their costs Accreditations of conformity assessment organizations LABS Certifications organizations Assessment organizations LABORATORIOS ORGANISMOS DE CERTIFICACIÓN ORGANISMOS DE INSPECCIÓN Source:SAE 14
16 Market: Non-oil exports by destination and product type (year 2016) Exports mainly from primary and natural resource-based products. Technology products are exported almost entirely towards CAN, MERCOSUR and other ALADI % 90.0% 80.0% 70.0% 60.0% 50.0% 40.0% 30.0% 2.5% 10.3% 8.0% 14.8% 5.9% 7.9% 4.9% 8.8% 15.4% 51.2% 48.0% 35.4% 16.7% 76.9% 10,000 9,000 8,000 7,000 6,000 5,000 4,000 3, % 39.3% 2, % 10.0% 12.3% 1, % 0 CAN MERCOSUR Rest of ALADI Rest of the world Primary Based on natural resources Low technology Medium technology High technology Others Exports USD USD millions Source: BCE 15
17 Industrial development intends to achieve: In the economy: Strengthen dollarization Increase investment Generate employment of quality In the region: Promote economic integration Promote productive complementarity In public private relations: To promote a leading role in the private sector (Productive Dialogue). Strengthen academia-business-state relationship towards production In the production: Improve quality Diversify goods and services Generate innovation in the sectors Strengthen product chains In a framework of trust, stability and permanent dialogue 16 16
18 Citizen Business Development Centers (CBDc) To promote the territorial business development through the provision of specialized services Implementing a national network of citizen Business Development centers in coordination with the private and academic sector Business Incubation Productive innovation SIGHT MISSION APPROACH Business sustainability Business aceleration STRATEGIC AXES 1.- Joint 2.- Service delivery 3.- Specialization Public Private Academy Business development Innovation Productive vocations 17
19 Dialogue as an instrument: The Consultative Council Productive and Tax 18
20 Dialogue as an instrument: The National Agreement for the production and employment 19
21 Dialogue as an instrument: Provincial competitiveness Workshops 20
22 Thank you very much Econ. Eva García Fabre Minister of Industry and Productivity of Ecuador 21
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