Julio José Prado: We want to put Ecuador back into the international investment circle

“Today Ecuador has become a light in Latin America”, said this Friday in Madrid the Minister of Production, Foreign Trade and Investments of Ecuador, Julio José Prado, who framed that statement in a context of “openness towards investment foreign ”that the new Ecuadorian Executive is pursuing in the midst of a period of political and economic upheaval in the region.

“We want to put Ecuador back into the international investment circle, from which we left almost ten years ago” and take advantage “in the short term” of the opportunity presented by Latin America, a region in which “there is a shift towards governments that are not so favorable to international investment or private companies, ”said the minister.

Prado ends today his official trip to Spain with the president of Ecuador, Guillermo Lasso, with the aim of encouraging investments in his country, and in which the head of the Ecuadorian Executive has met with the King of Spain, Felipe VI, and the President of the Spanish Government, the Socialist, Pedro Sánchez.

Bilateral relations Ecuador and Spain

The Latin American country organizes the forum “Ecuador Open for Business” (Ecuador open to business) on November 19 and 20, with the aim of attracting foreign capital to finance “strategic projects” for the Ecuadorian economy, in which companies Spanish companies will compete to reach public-private collaboration agreements with the Ecuadorian Government.

“We have met with medium-sized Spanish renewable energy companies, investment banks, and infrastructure and logistics companies for civil works,” explained the minister, who also mentioned the possibility of two large Spanish banks acquiring the Ecuadorian public bank Pacific, “which is for sale.”

As priority sectors to attract foreign private financing, Prado also highlighted the oil industry and mining.

The minister defends himself against the criticism his government has received for focusing on extractive activities in the midst of a climate awareness campaign, and assured that the Ecuadorian Executive “is highly committed to the ecological transition”, and only wishes to welcome “companies that are social and environmentally responsible ”, among which he highlighted the Spanish renewable energy companies for their“ enormous competitiveness ”.

Prado also referred to the meetings they have held with the mayor of the capital of Spain, with which they are studying agreements on “technical cooperation for infrastructure and sewerage in several (Ecuadorian) cities”, and advice on smart cities, ” in which Spain is very advanced, especially Madrid. “

The minister reiterated the objective that Spanish investments “double” in the next four years, and announced that the Spanish renewable energy companies Solar Pack and Cobra will soon start their activities in Ecuador.

In 2019, Spain had an investment position in Ecuador of some 2,362 million dollars, in a range of sectors that included crude oil extraction, commercial distribution, non-metallic mineral product manufacturing, telecommunications and the food industry, among others.

And according to the Bank of Ecuador, in 2020 it remained the second foreign investor with 230.9 million dollars that year, 20% of the total, behind Canada.

In addition, Spain was the fourth supplier and fifth client in the world of Ecuador in 2020 according to the IMF.

On the other hand, Prado praised the economic and diplomatic relations between the two countries, and highlighted the help that Spain provided to Ecuador to reach the bilateral trade agreement between his country and the European Union, which has facilitated foreign direct investment by European companies.

Labour reform

Regarding the labor reform that the Ecuadorian Executive intends to approve soon, and which unions and other social agents have opposed in various protests against the Lasso executive in recent weeks, Prado argued that it seeks to “gain competitiveness in order to generate greater conditions of employability for the six million Ecuadorians who do not have a job ”.

The Ecuadorian minister referred to the “high informality rate” in the economy, which together with the unemployed “hovers around 65%” of the workload. “For these people it is for whom we have to make this change in the economic model,” he clarified.

“The only way to create such an amount of employment is through the private sector (…) with much more flexible working conditions,” Prado explained, although it also happens “to create a social protection network through the Government,” he clarified.

To undertake these ambitious measures, the minister thanked the International Monetary Fund (IMF) for the release of 4,500 million euros announced in September, which will guarantee the bank deposits of companies and individuals, and will help to generate “a more conducive climate for investments.” .

The arrival of these funds may prevent Ecuador from having to go to the Chinese government as a lender of last resort, which has greatly increased investments in Latin America in recent years, and whose financing is often linked to the construction of works with its state companies or with the sale of crude oil as a counterpart.

Prado did mention that companies from the Asian giant are investing in Ecuador, and “that they comply with the standards” of social and environmental inclusion that the Latin American country demands. (I)