Guayaquil has almost equaled Quito as the main economy of Ecuador: is the main port the economic capital of the country again?

The economy of the city of Guayaquil grew faster than that of Quito, the capital of the Republic, in the period 2018-2022, according to the latest data from the National Accounts of the Central Bank of Ecuador (BCE) published in December 2023. They detail the production of final goods and services by canton.

The country’s main port is closing the gap and almost reaching the gross value added (GVA) generated by Quito.

He Guayaquil’s GVA increased from $22,680.4 million in 2018 to $25,528.8 million in 2022.And an increase of 12.6 percent in that time period.

He the capital of the Republic increased from 25,615 million dollars in 2018 to 25,764.3 million dollars in 2022.And an increase of 0.6 percent.

Which city offers the most opportunities for employment in formal jobs? Quito or Guayaquil?

Quito is the headquarters of the country’s main banks and also concentrates oil revenues, but the ECB already attributes that production to the eastern cantons where this wealth is created. Therefore, Orellana, Shushufindi and La Joya de los Sachas are the third, seventh and ninth cantons with the highest realized GDP.

The ECB calculates these figures using the GDP indicator, which is the subtraction of the total production of goods and services and intermediate consumption, the latter being the value of the goods and services used as inputs in the production process (how much it costs to produce). From there, the created wealth is determined, which is reflected in the GDP.

GVA is the main component of gross domestic product (GDP), which is an indicator that expresses the monetary value of production of goods and services for final demand, in this case of each canton.

During the 20th century, Guayaquil positioned itself as the country's economic capital with a private sector creating wealth, but an epidemic of shrimp white spot and a financial crisis in the late 1990s brought down its economy.

Since then, for example, financial activity has been concentrated in Quito, as has most of the public administration because it is the capital. With a statist model of Koreanism (2007/2017) and a high level of public debt, Quito's economy flourished, surpassing Guayaquil during the first decades of the 21st century.

However, a change is seen starting in 2018 with the rise of the private sector and the state economy in agony. The Estimates show that Guayaquil will surpass Quito in 2023 as the wealthiest cantonthe consulted analysts agree.

According to the ECB, GVA is one of the most important indicators for evaluating economic activity.

What happened to the economies of the two capital cities of Ecuador?

The wealth generated by the production of goods and services grew annually by an average of 3.2% in the period 2018-2022. in Guayaquil, while in Quito the increase was 0.6%.

The The strongest sectors of Guayaquil's economy and those in which it outperforms Quito are the commercial sector. ($5,379.4 million), Manufacturing ($4.455 million), Agriculture and fishing ($1,336.3 million), teaching ($944.1 million), water and electricity supply ($434.6 million) i exploitation of mines and quarries ($68.3 million).

These are the ten business activities that create the most jobs in Guayaquil and its catchment area

The Quito's strengths and where Guayaquil excels are professional and real estate activities ($5,885.3 million), accommodation and catering services ($3.013 million),financial activities ($2,089.8 million), Public administration ($1.502 million), health ($1,492.6 million) i construction ($1353.4 million).

Analyst and urban planner Fernando Carrión confirms that the economic logic of the two cities is very different. “Guayaquil has plantations around it, such as bananas, coffee, cocoa, plus shrimp, export products that support its development. In the case of Quito, there is no such contribution, but banking has a much greater weight, stemming from the crisis at the turn of the century with the bankruptcy of the banks of Guayaquil.

If the GVA generated by the Guayaquil urban conglomerate, which includes that city plus Durán, Samborondón, Yaguachi and Nobol, is added, it reaches $31,045.7 million. That Quito, plus Rumiñahui, Mejía, Cayambe and Pedro Moncayo, which make up its area of ​​influence, amounts to $28,461.6 million.

These are the business activities that create the most formal jobs in Quito and its area of ​​influence

One of the obstacles to the pace of growth is the level of insecurity that has worsened starting in 2022 with an increase in the number of intentional killings. Zone 8, which includes Guayaquil, Durán and Samborondón, is the most conflicted at the national level with a total of 2,752 crimes during 2023.

In addition to violent deaths, which are mainly related to disputes between organized crime and drug trafficking, the police say, there are also other crimes that affect the development of business, such as extortion of companies, robberies and kidnappings.

This is claimed by analyst and mathematician Juan José Illingworth Following the GDP growth trend, Guayaquil has already surpassed Quito in 2023.

"When Rafael Correa took power (2007-2017), the external debt was 10 billion dollars. After they renegotiated it, it amounted to 13 billion, and in ten years they expanded it to 60 billion dollars. All this money is public and definitely went to Quito, the ecological and Collas routes towards Tababel, the metro, the new government buildings, all the public works that were concentrated in the capital."

In short, the public debt changed the regional balance, since its use was concentrated around Quito: "The reversal of recent years is explained by the fact that there is no longer such a rhythm of borrowing, now maturities are paid and that money goes abroad. , is no longer in investment projects,” adds Illingworth.

Private investment and business development is what supports growth in Guayaquil, but this would be greater, adds the expert, if there is a complement of state investment, such as the construction of infrastructure that is needed, among them, the South Viaduct (the fifth bridge) to facilitate port access.

Most of the roads in Guayas, however, have been concessioned to private companies since 1998. The question is the quality of public spending. A key growth factor is investment in facilitating the flow of cargo and increasing production.

"The shrimp sector should have received investment in the electrical part to avoid diesel consumption, which would have led to much higher growth, but the preferred policy was to change the production matrix, which meant negotiating the sale of induction cookers to enrich the few," he says. Illingworth.

These are the average salaries of formally employed people in each of Ecuador's 221 cantons

A Korean consulting firm conducted a study at the beginning of Correa's tenure and concluded that the country should do better at what it is already doing, which is agricultural production, adding: "Korean experts said that money should be injected to help produce more domestically , however, the Senplades (National Secretariat for Planning and Development) people at the time said no and created the Good Life Plan.”

Ecuador bases its development without giving added value to production

Guayaquil has closed the gap with Quito in recent years, Carrión says, because the economic model from 2007 to 2017 was largely statist. "In which the weight of the state was fundamental and as the state has its capital in Quito, its growth went hand in hand with that, not only in terms of production but also consumption."

From 2018 to the present, the logic of the minimal state enters the governments of Lenín Moreno (2017-2021) and Guillermo Lasso (2021-2022). "All this makes the micro-economy have more weight, in this sense it is clearly seen that from 2018 Guayaquil starts to grow, which allows it to be tied to Quito," adds Carrión.

If we add what Durán and Samborondón produce, it already goes beyond Quito and its area of ​​influence. "The case of Durán is interesting because it is strategic for the integration of the economy of the coast with the economy of the Sierra, which is why the train started from there at its historical moment."

Durán is the fifth canton that contributes the most to the national GDP, that is, it is the fifth cantonal economy in the country. "The problem is that insecurity and vaccines cause the closure of businesses, but on the other hand, there is also the laundering of economic resources in these sectors. This is a very large amount that enables the growth of certain sectors of the economy, such as the real estate sector, tourism and the financial sector. This is happening in Guayaquil and Durán, which means an influx of fresh resources that want to become legal.”

In which cantons of Ecuador are the best salaries and in which jobs?

ECB figures show the concentration of wealth in the country's two main urban conglomerates: Guayaquil and Quito, which also have the largest number of consumers because they are the most populated.

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He The VAT of the two cities represents 46.2% of the total national amount. If the wealth realized in the areas of influence of both cantons is added, the weighting reaches 53.6%.

Hence the need for policies to encourage investment so that it goes to the rest of the country, achieving a more even development of the territory.

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