Insecurity, power outages and legal instability, the ‘top 3’ impacts on companies that made 2023 difficult for production

Editor’s note: Dear reader, this information is part of our premium content prepared at the end of 2023. In its content, you will find significant events of this year, and that is why we have left your access open.

For companies, 2023 was not the year they expected. Power restrictions that began on Oct. 27 and leave more than $1,000 million in lost hours just from power outages complicate production in the country, where insecurity and extortion are already the No. 1 problem for business. This is what Gabriela Uquillas, executive director of the Ecuadorian Business Committee, which brings together 149 unions, says.

How does the year 2023 end from the perspective of the business sector?

If we can look for a characteristic of this year, we can determine it by instability, and we see instability as a lack of stability of circumstances. We found a year that even brought us to a politically unprecedented event, which is the death of the cross, early elections, the results of which, without a doubt, many of us are aware today that they were a surprise. We also have many disappointments because of the results we expected from public policy or efforts that would have been different, we find ourselves again at an unserved table, with new announcements by the Minister of Economy about the financial difficulties that we hoped would eventually help to overcome and what we see is that the ball was simply passed from hand to hand.

Are there other aspects that come from political or economic?

It was a year in which we were all with the horror of insecurity, which is perhaps the biggest problem that penetrates the deepest part of a human being, his peace.

Companies and workers change their routines, schedules and even their clothes to avoid theft and extortion

In what monetary value are these impacts translated?

It is impossible to quantify the lack of security, what we can say is that it is evident how much companies dedicate their budget to security today and we see that it has already become everyday, not a luxury, not an exaggeration, not an extravagance. car protection, reducing working hours, changing routes, even changing habits, limiting yourself in your lifestyle undoubtedly leads to an impact on the economy, because you no longer go out because you have no money to spend or because you have other things to do, no. , you don’t go out because you’re afraid. There are businesses whose nature or raison d’etre is in other times, bars, restaurants, entertainment centers, all are affected by this situation.

Businesses are not only affected by the insecurity of their customers, but also themselves.

If we do the purification, when we talk to the business community, the number of companies that are vaccinated (forced) or at risk of vaccines is very large, with threats, with threats, that the letter has already arrived and that they do not present to them because they live in panic, very is high, what is the impact of that? It is not economically measurable. Various numbers are released, it cannot be measured, it is not reported, how much money do we give for vaccination? We do not know. There are sectors where travel is paid for, how many people have been kidnapped and who succumbed to the pretensions of crime and who are not known and who even prefer not to be known?

Do you have figures for power outages?

We have a quantified number there, we found that more than $1000 million was lost just for the hours we lost without power, but that value could triple when we talk about the dry season or the lack of basic service could extend until February or March 2024.

Power outage in swing and at the expense of rain

Shortages happen precisely at the time of year when the sales are the biggest.

This is unacceptable in the time we live in and in the conditions that Ecuador deserves, but if I have to choose the season when this unfortunate and unjustified event will happen, it cannot be the last quarter of the year, the last quarter is an even quarter, where when things are here were a little bad, there are more meetings, there are more acquisitions, there is a tithe that helps me move more money in the economy.

The sector has also suffered withdrawal of night price subsidy for industrialists, how will this affect them?

There is a misconception that it was a subsidy, here there was a differentiated rate of energy consumption and there was a reason for it: production at night does not cost the same as production during the day because you have to pay extra hours due to the conditions of uncertainty, but we also have to take into account that the supply conditions energy at night is higher, i.e. we have a surplus, we have energy that is wasted because logically most people are asleep and the lights are off. So it was a mechanism, which the government of Lenín Moreno found, to promote some companies that can do it to produce at night, thus creating certain jobs and in one way or another consuming the energy that was being wasted.

So why was that differentiated rate withdrawn?

They tell us that not enough jobs are being created. How will I ask companies to achieve the same results when conditions have changed, such as security. I don’t think we can measure things with such coldness that we don’t analyze all the circumstances… But it’s not a subsidy and we continue the fight, we talked several times with the Minister of Energy, because the idea is to recover. this concept, which was one of the last moves of the previous government, which, it seems, never understood the business sector.

Unemployment was 3.5 percent in November 2023: 293,581 Ecuadorians are unemployed

After this review, if I had to settle in ua ranking How would you classify these influences in 2023?

Undoubtedly, the first is uncertainty, hand in hand with something that is happening right now I would talk about the blackout, because it takes away a productive day, and as a third point, but no less important, legal uncertainty, we cannot continue to change the rules of the game. The fourth problem is the search for jobs and opportunities.