Revista ROE - A look at Ecuador today

WHYINVESTIN ECUADOR

Natural wealth and culture, State incentives, economic, social, environmental and educational development… they are just few reasons.

CLEAN ENERGY

Ecuador, at the forefront of renewable energy production in Latin America.

N.1- 2016

A LOOK AT E C UA D O R TO DAY

2 A NEAR FUTURE

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3 A NEAR FUTURE

MANDURIACU HYDROELECTRIC PLANT

Manduriacu Hydroelectric Plant, 65MW power, uses the waters of the Guayllabamba River, which has an average annual volume of 168.9 m3/s, for generation. Since it starting operating in October 2015, CO2 emissions dropped in approximately 0.14 million tons/year. ROE

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4 EDITORIAL

E

cuador is living a new stage where it is harvesting the fruits of the changes generated in the last years. It is no longer only about a country with great touristic, economic, and social potential derived from its natural diversity and vast cultures; we are now looking at a flowering a Republic of Opportunities that takes most advantage of its strengths and is administered in a solvent way. The country at present is focusing on its people, on the benefits generated by a change of perspective that privileges human wellbeing through processes of equity and social inclusion. And the figures ratify this: according to the Human Development Index published by United Nations, Ecuador is one of the three countries in the world with significant improvement in the field of development. Additionally, together with the different touristic awards received in past years, it is one of the planet’s most important destinations for living or retiring abroad.

Ecuador is also an investment option. Progress made in infrastructure and services, together with the new proposals related to the Production Code and the Law on Public-Private Alliance, that are included in the country’s productive vision, provide opportunities to investors, as you will see on the interviews published on this issue.

In this first issue, you will find a multifaceted analysis of today’s Ecuador, based on the assessment of the main attributes that turn the country into a leading destination to live. You will also read on the progress made in the fields of labor, educational, road infrastructure, and electrical generation.

Republic of Opportunities is, ultimately, an invitation for you to get to know the alternatives that Ecuador offers to the world for both investors and people looking for a destination to live or visit. ROE

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QUILOTOA LAKE

According to Twistedsifter, this volcanic lake is considered one of the world’s 15 most beautiful lakes. ROE www.ecuadortravel/es

6 STRATEGIC SECTORS

CONTENTS NEWS

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TIME MACHINERY SPACE MACHINERY

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7 STRATEGIC SECTORS

MAGNIFICENT BRIDGE ON THE NAPO RIVER

The highest bridge in Ecuador is found in the Amazon and crosses the Napo River, an affluent of the Amazonas River. The bridge includes a pedestrian walkway and a bicycle path for alternative mobilization. An efficient connection to the Amazon is now possible. ROE

SOCIONAUTS

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INTO THE FUTURE POCKET SLANG

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INTELLIGENT

!NVES TMENT FOR SHARED GROWTH

AFTER EXECUTING AN AGREEMENT WITH ONE OF THE WORLD’S MOST IMPORTANT COMPANIES IN SERVICE PROVISION, TECHNOLOGY, AND SOLUTIONS FOR OIL COMPANIES, THE COUNTRY WILL INCREASE ITS CRUDE PRODUCTION WITH ENVIRONMENTAL RESPONSIBILITY AND EFFICIENCY.

Ecuador is aware that development is a joint task and, thus, promotes national and international investment in favor of the industry and the wellbeing of its people. Last December the country reached and agreement with Schlumberger, a multinational corporation that will contribute to the Ecuadorian hydrocarbons sector and will generate significant income for the French company.

The Specific Service Contract has a 20-year term and includes the investment of Shaya Ecuador S.A. (Schlumberger affiliate in the country) for around USD 4,900 million in the fields of Block 61 of the Ecuadorian Amazon. With this, sector’s production will increase up to 20,000 barrels per day in the next years, which means earnings of around USD 1.8 billion for Ecuador and USD 236 billion for the company.

In this sense, Carlos Sarmiento, Chairman of Schlumberger Ecuador, said: “Concluding a goal like this one fills me with pride… I am fully thankful for this commitment to the country, to the Government, for the country to continue growing and using natural resources in a responsible way. That is what we are here for – we are only doing our bit.” ROE •

AUCA FIELD (BLOCK 61) HAS A 25% NATURAL PRODUCTION DECLINATION PER YEAR AND, THUS, NEEDS TECHNIQUES TO INCREASE THE DEPOSITS’ POTENTIAL, EFFICIENCY, AND CRUDE VOLUME.

•

AROUND 11% OF THE PROFIT EXPECTED FROM THIS INVESTMENT WILL GO TO SCHLUMBERGER AND 89% TO THE ECUADORIAN STATE.

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10 NEWS ROE

LET’S LOOK FOR A

PLASTIC PARTNER! A MUSHROOM THAT GROWS IN THE ECUADORIAN FOREST AND DEGRADES POLYURETHANE OPENS THE POSSIBILITY OF ESTABLISHING AN UNPARALLELED BIO REMEDIAL PROGRAM A group of investigators of the Biophysics and Biochemistry Department of Yale University found in Yasuni National Park, in the Ecuadorian Amazon, a mushroom that decomposes the chemical links of polyurethane, a material that can remain in nature for generations and which demand increases at a rate of 4.5 % per year. This investigation, which is now continued by the Catholic University of Ecuador, could be the seed of one of the region’s most important bio remedial projects.

It’s not the first time that a live organism is able to decompose this type of plastic; nevertheless, the great deed of Pestalotipsis micropsora, an endophytic fungi that lives in plant tissue, is its capacity of obtaining the carbon it needs to develop in this plastic, without the presence of oxygen and at a metabolic speed that is much faster than the rest of organisms. The purpose of creating IKIAM University in the Ecuadorian Amazon and the National Biodiversity Institute is to generate new knowledge of global importance by taking advantage of this and other natural resources to diversify the production matrix and, hence, foster the generation of goods and services derived from one of Ecuador’s largest source of wealth: biodiversity. ROE

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11 NEWS ROE

COOK!NG NOW USING CLEAN ENERGY

3.5

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MILLION ECUADORIAN HOMES WILL USE INDUCTION STOVES IN 2017, WHICH WORK WITH ELECTRICITY, REDUCE POLLUTION, AND ELIMINATE THE USE OF LIQUEFIED PETROLEUM GAS (LPG)

THE COUNTRY’S ENERGY PRODUCTION CAPACITY WILL DOUBLE FROM 3.770 TO 6.779 MEGAWATTS, WITH WHICH THE COUNTRY WILL LEAD THE REGION’S RENEWABLE ENERGY PRODUCTION.

NEW CLEAN ENERGYGENERATING HYDROELECTRIC STATIONS AND SOURCES WILL START OPERATING IN 2016. THIS WILL REDUCE CARBON EMISSIONS AND THE DEPENDENCE ON FOSSIL FUELS.

BY BECOMING A CLEAN AND CHEAP ENERGY PRODUCER ECUADOR ENCOURAGES THE PEOPLE TO CHANGE THE WAY HOW THEY PERFORM A BASIC ACTIVITY: COOKING With eight new hydroelectric stations operating, Ecuador will double its energy generation from 3.770 to 6.779 megawatts, and will become one of the region’s countries with the main renewable energy generation. According to this work, the State encourages the people to change the way how they cook their food, which was traditionally made with liquefied petroleum gas (LPG), to modern electric stoves that work with clean low-cost energy produced in the country. Induction stoves use energy

more efficiently, reduce the risk of burnings and accidents, and are environmentally friendly. The Ecuadorian State’s incentives for people who change their way of cooking include free 80 KWh per month until 2017, which is equivalent to one LPG cylinder. As of January 2018, the KWh will cost 4 cents. Induction stove producers and traders, on the other hand, have high tax privileges, which allows promoting an attractive offer to their clients. ROE

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12 NEW S ROE

BUILDING A COUNTRY OF

EQUALITY THE POLICIES ENFORCED IN THE LAST YEARS HAVE CHANGED ECUADORIAN WAY OF THINKING. ACCORDING TO STUDIES PERFORMED BY LATINOBARÓMETRO, CITIZENS IN TODAY’S ECUADOR PERCEIVE SOCIAL AND ECONOMIC PROGRESS. Progress achieved in Ecuador upon public policies in favor of the majority of the population has borne fruit and is reflected in public opinion studies such as those performed every year by Latinobarómetro (with more than 20,000 interviews in 18 countries in Latin America.) In a recent report on the region’s economic situation and development in the last two decades, Ecuador headed the list of countries where 49% of the people deem there is a fair distribution of wealth. The submitted result is the percentage of people who think this is a “highly fair” and “fair” situation, which places Ecuador above the Latin American average, with 22%. In spite of the recent global crisis and oil price drop, Ecuador’s economic development in the last years is based on fair policies that have not reduced wages, created unemployment or increased the price of basic needs.

This has placed the country in the second ranking with the highest satisfaction with the economy (44%.). ROE

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13 NEWS ROE

BACK TO

SCH OOL! 144,900 APPOINTED TEACHERS WILL BE TRAINED AT UNAE

HOW CAN WE CHANGE THE ENTIRE TEACHING SYSTEM? BY TRAINING TEACHERS WITH HIGH ACADEMIC STANDARDS IN A UNIVERSITY SPECIALIZED IN EDUCATION. In this university professors remember how it is to sit behind a student’s desk. The goal is to create a new educational system. The National University of Education (UNAE) believes that a true educational reform demands professors constantly devoted to research and training. Ecuador’s 144,900 appointed professors are now able to study post-graduate studies and specializations to improve their performance in this university – an opportunity they did not have before. UNAE is also devoted to high school graduates who wish to become teachers. This university project started in 2014 and up to date 80 foreign and 23 national professors have been contracted. UNAE will work with new teaching centers (please see page 34) to articulate a new national higher educational model. ROE

2,854 439 SQUARED FT IS THE SIZE OF THE CAMPUS LOCATED IN AZOGUES

MILLION DOLLARS IS THE TOTAL INVESTMENT IN THIS PROJECT

80

FOREIGN AND 23 NATIONAL PROFESSORS WILL BE PART OF UNAE’S STAFF

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CLASSROOMS & 16 STUDENT RESIDENCES IN THE CAMPUS TO THIS DATE

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14 NEWS ROE

BASED ON ITS FLORA AND FAUNA, ITS PRIVILEGED LOCATION, AND NATURAL REGIONS, ECUADOR IS THE WORLD’S MOST MEGADIVERSE COUNTRY PER SQ. KM.

THE COLOR THAT ATTRACTS CROWDS

IN A BLINK A 40K HECTARE FOREST CHANGES COLOR TO AN INTENSE YELLOW AND ENCHANTS THE SCENERY. THIS NATURAL MIRACLE, HAPPENS EVERY YEAR IN THE SOUTH OF ECUADOR AND ATTRACTS THOUSAND OF NATIONAL AND FOREIGN TOURISTS..

The Yellow Ipê (Guayacan) is a patient tree. It takes them around two centuries to reach 50 ft. At the beginning of every year, this native American species awaits the first rains that open the season in the Coast to sprout their bulbs which open and drench the dry forest located on the Ecuadorian southern border. However, besides being patient, the Yello Ipê can also rush – in less than one week it drops the flowers and dyes the floor of yellow. This event is unique on the planet. It takes place at the beginning of every year (usually between the last days of January and first of February) in the Zapotillo Canton, province of Loja, and is attended by thousands of national foreign tourists. The Ecuadorian State turned this marvelous natural even, which happens in

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a forest of 100k acres (the largest of the kind in Ecuador), into an international happening. As of 2014, the flowering of guayacanes (Guaiacum) was broadcasted during four days in the United States, Europe, and several countries of the region. More than 5,000 visitors travelled to this part of Ecuador to see it and the number grows every year. The dissemination and acceptance of this gift from nature is, of course, supported on the work of the local people for whom the guayacan yellow flourishing has also become a synonym of prosperity representing tourism growth for the sector, the offer of typical dishes (goat, corn goods, beverages) and work as guides, organizes horseback riding, cycling routes, and camping areas. ROE

• THE GUAYACANES BLOOMING WAS BROADCASTED IN 2014, DURING FOUR DAYS, IN THE UNITED STATES, EUROPE AND SEVERAL COUNTRIES OF THE REGION. MORE THAN 5,000 VISITORS VISITED THE SOUTH OF ECUADOR (PROVINCE OF LOJA) TO WITNESS IT.

BLOOMING OF GUAYACANES MANGAHURCO LOJA – DOCUMENTARY

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NATURE’S RIGHTS

IN 2008 ECUADOR STARTED A NEW ERA – IT WAS THE WORLD’S FIRST COUNTRY TO ACKNOWLEDGE THE RIGHTS OF NATURE IN ITS CONSTITUTION. THIS WAS A GREAT LEAP IN STRUGGLING AGAINST THE EFFECTS OF CLIMATE CHANGE. Based on the ancestral philosophy of Good Living, the Ecuadorian Constitution became the first in the world to acknowledge nature as a subject of rights. It is a different perspective from the current development model as it gives priority to protecting life and the different ecosystems of the country’s four regions – Coast, Sierra, Amazon, and Galapagos. Integral respect to existence, efficient restoration mechanisms in case of environment impact, precaution measures, restrictions to harmful activities, the rights of the communities and the people to benefit from natural wealth are set forth in the Constitution that rules in Ecuador since 2008. This historic achievement is made clear in the development of public policies and a new productive matrix aimed to generating renewable energy and sustainable industrial production. As a way of acknowledging this initiative, the country has been chosen for several important international events, including the Seminar on Environment, Biodiversity, and Climate Change organized by the Union of South American Nations (Unasur), the symposium Strategies After Rio+20, the 2015 International Conference on Ecotourism and Sustainable Tourism, the Convention on the Conservation of Migratory Species of Wild Animals organized by United Nations, etc. ROE

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PART I

TIME MAC HINE RY REPUBLIC OF OPPORTUNITIES I THE CENTER OF THE WORLD

18 TODAY’S ECUADOR

AFTER TEN YEARS OF DEEP TRANSFORMATIONS, PUBLIC POLICIES, DEVELOPMENT PLANS, NEW DIRECTIONS AND INVESTMENTS THAT FAVOR THE WELLBEING OF ALL CITIZENS, TODAY’S ECUADOR IS A RENEWED COUNTRY COMMITTED TO ITS PEOPLE’S PROGRESS.

TODAY’S ECUADOR

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#EcuadorYaCambió

Ecuador is carrying out productive strengthening in the following axes: exports increase, selective import substitution, growth of tourism, and increasing attraction of foreign investment.

19 TODAY’S ECUADOR

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rogress is undeniable. The deep transformation project assumed by Ecuador since 2007 has now given fruits and, regardless of the world economic situation caused by oil prices, the country continues its sound process of national development and goals. It is being projected to the world as a Republic of Opportunities based on precepts of justice and equality, that respects individual rights with emphasis on the wellbeing of all citizens. It is a country that gives priority to equal opportunities, the access to quality education, health services, employment, and essential productive goods, such as housing or land, and credit for investment.

In an increasingly competitive world interconnected through technology, the country acknowledges productivity and entrepreneurship as essential factors for its development. This is why it has bet on strengthening its people’s capacities and, particularly its youngsters through 10k scholarships granted to the world’s best universities, many of whom are back home and contribute to the main national goals. In this line, Ecuador has enhanced the entire education standards and has invested in new centers of excellence, such as Ikiam and Yachay universities, focused on knowledge generation.

We are aware that a society’s progress is based on the sum of its individual capacities interrelated in favor of collective wellbeing.

Ecuador has made efforts in generating the best conditions for the performance of small, medium, and large producers, as well as exporters, importers, artisans, professionals, merchants, and consumers, but always having in mind the country’s sustainability, internal conditions and its relation with the world.

Today’s Ecuador, hence, is an actual productive power – a Republic of Opportunities focused on competitiveness, export increase, selective import substitution, tourism growth, and enhanced foreign investment. Emblematic products such as bananas, shrimps, chocolate, tourism are only some of the elements that contribute to this compromise and seek to generate wealth translated into wellbeing, security, and employment; more infrastructure, innovation, investigation, and technology development; and, finally, in raw material for the change that Ecuador started in 2007. ROE

TODAY’S ECUADOR INVESTS 4.2 TIMES MORE IN EDUCATION THAN THE 3 FORMER ADMINISTRATIONS. IN 2015 IT INVESTED 2.12% OF ITS GDP (US 9,445 MILLION) IN HIGHER EDUCATION.

BETWEEN 2007 AND 2015, ECUADOR HAS DELIVERED MORE THAN 10,000 SCHOLARSHIPS FOR THE WORLD’S BEST UNIVERSITIES. 58 EDUCATIONAL MILLENIUM UNITS WERE BUILT AND 5 EMBLEMATIC UNITS HAVE BEEN RENEWED.

ECUADOR HAS INVESTED USD 13,000 MILLION IN ITS PUBLIC HEALTH SYSTEM BETWEEN 2007 AND 2015 – 11 NEW HOSPITALS WERE INAUGURATED AND OTHER 11 WERE RENEWED.

THE NUMBER OF HEALTH PROFESSIONALS INCREASED FROM 11,201 IN 2008 TO 33,644 IN 2015. MORE THAN 800,000 CHILDREN RECEIVED MICRONUTRIENTS TO COMBAT MALNUTRITION.

TODAY’S ECUADOR HAS A PUBLIC INVESTMENT THREE TIMES HIGHER THAN IN FORMER ADMINISTRATIONS. IN 2015, THIS AMOUNT REACHED 8,000 MILLION.

LEADING DESTINATION FOR LIVING ABROAD

“Ecuador offers something for everyone – the pace of life of a sophisticated city or a serene life in the country. For such a small country (the size of the State of Colorado), Ecuador offers a diverse ecological world.” I International Living

21 ECUADOR THE BEST PLACE TO LIVE OVERSEAS

BASED ON THE QUALITY OF LIFE, COSTS, AND NATURAL BENEFITS, INTERNATIONAL LIVING CHOSE ECUADOR AS THE BEST COUNTRY TO LIVE AFTER RETIREMENT.

THE BEST PLACE TO MIGRATE ¡ECUADOR DRIVES MIGRANTS CRAZY! TODAY IT’S A LEADING DESTINATION FOR LIVING ABROAD.

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“

arrived in 2004 hired by an Ecuadorian mobile telephony company. I remember that it was a oneyear contract but, since life is like a box of chocolates, I’m still here ten years later.” Fabio Michelotti, an Italian citizen who lives in Ecuador, found in Quito a place where he feels very well. Fabio’s story is no exception; on the contrary, it is about to become a rule. A survey performed to 14,000 people on InterNations’ webpage – a virtual expats community that is present in more than 390 cities around the world – and published by British newspaper The Telegraph, determined that in 2014 Ecuador was the best place when it came to choose where to live abroad.

But it’s not the first time Ecuador is deemed one of the best places in the world to live. North American retired migrant Jen Adams, who is now living in Cuenca, decided to visit this city as a tourist.

“My three-month visit was extended to six. Then one year elapsed and I still hadn’t left.” This is what she tells us in an article called Why I never left this Ecuadorian colonial city published in International Living’s web page, which is a magazine that selects the best destination to retire in the world each year.

In the last seven years, including this one, Ecuador has been ranked as the world’s leading destination.

What has made this country become the favorite among expatriates? According to the experts, it’s a combination of great weather, affordable cost of living, the people’s charm, natural beauty, and the possibility of finding good quality services at good prices. According to our interviewees, it is all this and more. ROE

www.internations.org

QUALITY OF LIFE, WORK, ROMANCE & FUN ACCORDING TO INTERNATIONS, THESE FACTORS WERE TAKEN INTO CONSIDERATION TO ESTABLISH THE BEST COUNTRY TO LIVE AS A MIGRANT.

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22 ECUADOR THE BEST PLACE TO LIVE OVERSEAS

NADINE HOLANDA ANTHROPOLOGIST “I’ve lived here since May. The original idea was to go back to the Netherlands in September to show the results of my research, but I decided to stay longer. Fortunately I found a job. I love Ecuadorian people Ecuador; they are warm and nice people. Life is more social than in the Netherlands – they like company more and life is more relaxed.”

A DOLLAR IS NOT THE SAME AS A DOLLAR In Ecuador one dollar is worth around 1.80 dollars. Although this statement initially sounds unreasonable, it means that money in the country is worth more as compared to other countries in the region (see graph.) The purchase power in the region’s countries may be established through the purchasing power parity (PPP) and currency quote. The PPP allows determining several values of a common comparable currency. If we take exchange rates of October 2014 and the International Monetary Fund-estimated PPP, we determine one dollar’s purchase power in different Latin American countries. This formula explains why the monthly budget established by expatriates retired in the country — US$ 1,500 per couple— allows them to live quite comfortably;

although, as published in International Living, there are testimonies of people who easily live with up to US$ 800 per month. “Utilities like gas, water, and electricity are much more expensive over there (Colombia.) Here I fill my small car tank with 10 dollars, which would be impossible there.”

Victor, Colombian resident in Ecuador, believes the country is a great advantage in term of utilities. “Restaurants are much cheaper,” says Nadine, a Dutch migrant. And although not everything is cheaper – “wine is too expensive!” cried German visitor Imke, many choose to live in Ecuador due to the cost of living, but this is not the only factor that persuades migrants to stay.

HOW MUCH DOES IT COST TO LIVE IN ECUADOR ACCORDING TO INTERNATIONAL LIVING WEBPAGE?

IMKE GERMAN STUDENT

EMERIC MARTINIQUE POLITICAL SCIENCES GRADUATE

“I originally planned my trip with the intention to learn Spanish. However, as soon as I started investigating about the country, it attracted me immediately. I am a very curious person; I am highly attracted to other cultures and nature. My purpose was to visit many sites in Ecuador and taste the food. I love, for example, the combination of blackberry and soursop (guanabana). It is something completely new to me.”

“I like this city very much. I visited another Latin American country and I love it. I wish there were more relations between Latin America and Martinique, because deep down we are quite similar. I would like to stay here. I just finished by political science studies and in France it is hard to find a job with no experience.”

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23 ECUADOR THE BEST PLACE TO LIVE OVERSEAS

THE PURCHASE POWER OF ONE DOLLAR IN EACH COUNTRY (2014) 1,6

COLOMBIA PPP: 1176.95 PESOS EXCHANGE RATE: 2388.92 PESOS EQUIVALENCE: USD 2.03

1,4

MEXICO PPP: 7.99 PESOS EXCHANGE RATE: 14.73 PESOS EQUIVALENCE: USD 1.84

1,8

1,2

BRAZIL PPP: 1.69 REALES EXCHANGE RATE: 2.66 REALES EQUIVALENCE: USD 1.58

PERU PPP: 1.54 SOLES EXCHANGE RATE: 2.99 SOLES EQUIVALENCE: USD 1.94

ECUADOR PPP: USD 0.56 EXCHANGE RATE: USD 1 EQUIVALENCE: USD 1.80

CHILE PPP: 358.20 PESOS EXCHANGE RATE: 604.49 PESOS EQUIVALENCE: USD 1.69

2

1 0

0,8 0,2

0,6

ARGENTINA PPP: 4.64 PESOS TIPO DE CAMBIO: 8.55 PESOS EQUIVALENCE: USD 1.84

PANAMA PPP: USD 0.57 EXCHANGE RATE: USD 1 EQUIVALENCE: USD 1.75

VENEZUELA PPP: 5.82 BOLIVARES EXCHANGE RATE: 6.29 BOLIVARES EQUIVALENCE: USD 1.08

0,4

Source: IMF, Central Bank of Ecuador

In Ecuador the dollar has an important purchasing power, and this strengthens the interest of migrating to this country.

Due to devaluation of their currencies the dollar has a higher purchasing power in other countries such as Colombia, Brazil, Peru, and Mexico; nevertheless, this generates other issues in those countries.

PPP Establishes the value of comparable common currency to compare purchasing power in countries with different currencies.

EXCHANGE RATE: Establishes currency values versus the base currency (dollar.)

EQUIVALENCE: Results from the PPP value transformed into the equivalent value in dollars.

VICTOR COLOMBIA CONSULTANT

FABIO ITALY ENTREPRENEUR

“I always say that Ecuador has been a paradise to me. When I arrived there was something my own country couldn’t offer: safety.

As a Colombian resident, one of my most cherished qualities is safety. I also see Ecuador as a country of opportunities; it was and continues being an opportunity for me. I didn’t have trouble finding a job; I’ve never been unemployed; and I’m not alone here: many people could also confirm it.”

“Basically, I stayed because I felt well. I found the opportunities to stay. The hardest question I must answer from my Ecuadorian friends who would like to live in Italy is why I came here and stayed. Well, there are many things I like of Ecuador and Quito.

People are cool. I lived several years in Milan and never met my front door neighbor. That’s quite shocking. Here, instead, one week after I arrived I already had 200 friends!”

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24 ECUADOR THE BEST PLACE TO LIVE OVERSEAS

7

MEGADIVERSE COUNTRIES IN THE AMERICAN CONTINENT

Ecuador is the smallest but has the largest amount of species per area unit.

DIVERSITY IS CALLED ECUADOR “You travel a few miles from Quito and you will find yourself in the middle of the Amazon forest, with lakes and national parks. You move in another direction and suddenly you’re looking at the Pacific Ocean.” This marvels Fabio and many other visitors. “Although Ecuador is not very big, it has huge cultural, landscape, animal diversity to see,” added Emeric, who settled in Ecuador, while explaining what he likes best. Different indigenous nationalities and peoples encourage those who seek contact with other realities. As the world’s smallest mega diverse country, it has 1600 bird species, 4500 butterfly

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species, 405 reptile species, 440 amphibian species, and 382 mammal species, not to mention the plant world. Although Imke does not live in Ecuador, she will spend here six months. She can’t wait to visit all the natural sites, so different from her native Germany, which also attracted her fellow-citizen Alexander von Humboldt more than 200 years ago. “I study geology in Germany; I’m interested in ocean currents and the wind. I am attracted by the warm El Niño current or walking through the Andes.”

25 ECUADOR THE BEST PLACE TO LIVE OVERSEAS

THE MIRACLE OF ETERNAL SPRING Ecuador’s geography is like nothing else in the world.

Although nearly 5,000 miles cross the Equator, no other place in this latitude has such climate floor variety. In such small territory —110,000 sq. miles— the Andes and the Pacific Ocean generate a broad range of environments from tropical to paramo weathers. It has two seasons (rainy and dry seasons) that help keeping temperatures away from extreme conditions. With twelve hours of sun

every day of the year, days are almost the same. Cities in the Sierra (Quito or Cuenca, for example) boast of having spring weather all year round, ranging from an average of 50°F to 77°F during the day. Cities in the Coast, such as Guayaquil, have wet tropical weather ranging from 77°F to 83°F. Besides these cities there are others with infinite microclimates that adjust to each visitor’s preferences.

There are infinite options to choose from! ROE

CUENCA THE BEST SITE TO LIVE ACCORDING TO VIVA TROPICAL

This site is specialized in real estate in Latin America and chose Ecuador as the region’s best destination to live.

TEN REASONS TO MIGRATE TO ECUADOR Based on our interviewees’ testimonies and publications on Ecuador as a place to migrate, below we present ten reasons that make the country the best place to live abroad.

1. COST OF LIVING

2. EVERYTHING CLOSE TO YOU

3. KIND PEOPLE

4. IDEAL WEATHER

In many aspects Ecuador is a country with an affordable cost of living. The price of utilities (water, electricity) of transportation, housing —particularly in small cities— offer great quality of life at affordable prices.

Ecuador is a small but diverse country. No matter where you are, the sea, the mountains, the jungle, as well as a broad variety of tourist sites are close and accessible through great roads. All this is stimulating for foreigners who are eager to get to know a country with great natural wealth.

“I lived several years in Milan and never met my front door neighbor. That’s quite shocking. Here, instead, one week after I arrived I already had 200 friends!” Many migrants share Fabio’s testimony and have found open arms in the country.

Some of the most popular cities include Cuenca, Vilcabamba, Quito, Guayaquil, and Salinas.

The scarce variation of temperatures and diverse climate floors offer a selection of sites according to expatriates’ needs.

Ecuador’s dollarization stabilized the country’s conditions in terms of inflation, which is highly beneficial, particularly for migrants from North America who can better appreciate the difference in cost of living.

6. EMPLOYMENT OPPORTUNITIES

7. BENEFITS TO THE ELDER

8. ETHNIC DIVERSITY

9. QUALITY HEALTH SERVICES

10. ENTERTAINMENT

Ecuador and Mexico recorded the region’s lowest unemployment rates in 2014. Additionally, the domestic legislation offers opportunities without many difficulties for foreign workers and entrepreneurs.

The Elder Law applies both for nationals and foreign residents as well.

This results in a series of benefits: transportation rate discounts, real-estate tax discounts (Cuenca), and other similar benefits.

The opportunity of getting to know and relate to other cultures is a great incentive for migrants who decide to live in Ecuador, like Emeric, who seeks to approach the Latin American culture and create links with Maritnique, his place of origin.

Both private and public health services are very attractive for foreign residents in Ecuador. As testified in International Living, they find high quality health services at proportionally reasonable prices.

Ecuador also offers a powerful variety of sites both for lovers of tranquility, country trips, nature, and for urban-life lovers with night entertainment, museums and much more.

5. DOLLARIZATION

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26 LABOR CONDITIONS

YEARS OF LABOR RENEWAL

DUE TO ITS UNIQUE NATURAL WEALTH, 16% OF ECUADORIAN TERRITORY IS CONSIDERED PROTECTED AREAS.

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27 LABOR CONDITIONS

In 2015, the workers’ minimum wage rose to 354 dollars. In the last eight years this amount has increased according to inflation and, thus, year after year has improved the people’s purchase power. Likewise, labor outsourcing was prohibited and, with it, the percentage of people working in these conditions was largely reduced. With one of Latin America’s lowest unemployment rates —only exceeded by Mexico and Bolivia— according to the International Monetary Fund, Ecuador has currently become one of the best countries to work in the region. The International Labor Organization recognized the country for having favored public and private workers’ labor conditions through a series of institutional changes and clear labor policies performed in the last years. But this story of eight years of amendments does not end today. There are many ambitious plans aimed to improve the quality of life of Ecuadorians. ROE

GREAT CHANGES NOW

32.7

I

n 2006, survival for the average Ecuadorians was a challenge to common sense.

Ecuador’s minimum wage was barely 160 dollars, excluding legal benefits. This amount hardly covered 60% of minimum monthly expenses calculated at the time for an Ecuadorian family—and assuming that the person who earned this amount each month was not part of the 50% of the people of working age in the country’s main cities (Quito, Guayaquil & Cuenca) who worked in even worse conditions due to outsourcing contracts, which were legal at the time. Figures didn’t match, but the people managed to get by.

%

ECUADOR NEVER HAD BETTER LIFE CONDITIONS AS IT HAS NOW. THE NEW LABOR RULES AND POLICIES HAVE BROUGHT UNEMPLOYMENT LEVELS TO THEIR LOWEST

OF THE POPULATION ACQUIRED SOCIAL SECURITY COVERAGE As of 2013, social security paid by workers in accordance with the law not only covers their health but also their spouses’ and minor children’s health as well.

With one of the region’s lowest unemployment rates and a minimum wage that was doubled in less than ten years, labor conditions in Ecuador are an essential progress meant to improve the people’s life conditions.

REPUBLIC OF OPPORTUNITIES I THE CENTER OF THE WORLD

28 LABOR CONDITIONS

DIFFERENCES BEFORE

NOW

Outsourcing and other contracting forms without any stability assurance in 2006: legal.

Outsourcing 2008: Illegal.

Good jobs Economically Active Population June 2015: 45.9%.

Economically Active Population 2007: 43.20%.

In 2006 25% of the EAP was affiliated to Social Security.

In 2015, 45% of EAP is affiliated to social security.

In 2015, a woman’s average income was US$ 418.20.

In 2004 a woman’s average income was US$ 125.

In September 2015, 66.13% of people with good jobs were affiliated to social security IESS.

In September 2007, 42.16% of people with a good job were affiliated to social security IESS.

GOOD JOB

COMPLIES WITH A LEGAL WORKING DAY AND OFFERS AT LEAST ECUADOR’S MINIMUM WAGE PLUS LEGAL BENEFITS.

POOR JOB

FAILS TO COMPLY WITH A LEGAL WORKING DAY AND/OR DOES NOT OFFER COMPENSATION ABOVE ECUADOR’S MINIMUM WAGE.

REPUBLIC OF OPPORTUNITIES I THE CENTER OF THE WORLD

UNDEREMPLOYMENT

A CATEGORY THAT BELONGS TO THE POOR JOBS, INADECUATE EMPLOYMENT, PEOPLE WHO DO NOT WORK LEGAL BUSINESS HOURS AND/OR DO NOT EARN THE MINIMUM WAGE AND WISH TO EARN IT.

29 LABOR CONDITIONS

%

CURRENTCONDITIONS

4.5

Although changes have been made gradually, the progress made is historically relevant. Between 2012 and 2015, unemployment remained under 5%. Today in Ecuador both unemployment and underemployment rates represent minimum percentages, that is, underemployment in June 2015 was 12.1% and unemployment dropped to barely 4.5%. This last figure is very close to what is known as structural unemployment, which is the usual rate due to structural changes made to the economy and for which employment offers cannot be adjusted immediately.

Likewise, minor unemployment levels also result in higher income levels for the population in general, which has improved the quality of life. Factors like improved employment levels, such as higher wages, have been decisive in the population’s enhanced purchase power Significant progress has been made in Ecuador’s labor conditions and now the country has one of the world’s lowest unemployment rates. The current approach is to place humans above capital, and great changes have taken place with this philosophy. The new Constitution seeks equal labor conditions between men and women; unpaid household work is deemed productive work and all kinds of work discrimination are prohibited. Additionally, a forgotten segment of the population has been included — disabled people.

UNEMPLOYMENT IN ECUADOR IN 2015

60 48.1%

50 40

46.5%

% GOOD JOBS % POOR JOBS

30 20

14.0%

10

4.8%

% UNDEREMPLOYMENT % UNEMPLOYMENT

DEC-15

DEC-14

DEC-13

DEC-12

DEC-11

DEC-10

DEC-09

DEC-08

DEC-07

0

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30 LABOR CONDITIONS

06

01

03

02

04

07

08

05

5 6 25 5

UNEMPLOYMENT RATES

4,7

ECUADOR PERU CHILE BRAZIL ARGENTINA COLOMBIA

4.

4. 0 6. .

5 6 6 91 0 99 .0 2

MEXICO

Significant progress has been made in Ecuador’s labor conditions and now the country has one of the world’s lowest unemployment rates. The IMF estimates the country’s rate in 2015 will be around 5%. In the region, only Mexico has a lower rate, although labor conditions in that country are more flexible than in Ecuador. The average regional rate exceeds 7%, which places Ecuador in a highly favorable situation.

Source: International Monetary Fund

6 .

6 .

6 .

8 4 1

nd

2

VENEZUELA

PLACE

AMONG THE LOWEST UNEMPLOYMENT RATES IN LATIN AMERICA.

CLEAR RULES: WORKING TODAY IN ECUADOR

Significant innovations have been made in the field of labor legislation to generate such increased wellbeing for Ecuadorians. The first great change came with Constituent Mandate N° 8 —the elimination of outsourcing, middlemen, and hourly contracts because these were mechanisms used to skirt legal benefits that, as established later, must be universal for all workers in Ecuador. Ecuador has a new Labor Code that, among other things, seeks to generate more job stability, expand the social security coverage, and close the gap of people with no social coverage with the Universal Sanitary Assistance. ROE

REPUBLIC OF OPPORTUNITIES I THE CENTER OF THE WORLD

HEALTH SERVICES

Health is a priority in Ecuador since 2007; 46 health centers and 12 hospitals have been built throughout the country. ROE

32 EDUCATION

UNIVERSITY TETRALOGY

REPUBLIC OF OPPORTUNITIES I THE CENTER OF THE WORLD

The hubs potentiated in the new Ecuadorian college system will be experimental technology, bioknowledge, innovating education, and art. Unheard of elsewhere, it is supported by members of the world’s highest academic spheres.

33 EDUCATION

EDUCATION: THE FIRST COMMITMENT ECUADOR IS ON ITS WAY TO BECOMING A SOCIETY OF KNOWLEDGE. TODAY, ACHIEVING THIS TRANSFORMATION IS THE COUNTRY’S FIRST MOVE.

T

oday something is clear in Ecuador: nothing is more important than education. In the last years investment in this sector has been doubled and no other area receives a higher amount from the State budget. This is a clear reflect of what is happening. But we need a deeper analysis in order to understand the ongoing renewal and to get a good grasp of what the figure of 2.12% of the GDP in higher education means, i.e., more than twice the average figure invested by the rest of Latin American countries. How do you

build a society which economy is based on knowledge? By generating conditions for it to become part of social and economic relations at all spheres. By having educational units with state-of-the-art infrastructure; a research university devoted to permanent improvement of education; a city planned to generate strategic knowledge, educator assessment and training; a higher education entity that turns the forest into a source of wisdom. These are only examples that show that when we talk about education, the country has only one answer: all in. ROE

BETWEEN 2007 AND 2015, ECUADOR’S AVERAGE ECONOMIC GROWTH WAS 3.9%, ONE POINT ABOVE THE LATIN AMERICAN AVERAGE (2.9%.)

REPUBLIC OF OPPORTUNITIES I THE CENTER OF THE WORLD

34 EDUCATION

academic area, the Experimental Technology Research University, with public and private research institutes, technological development firms, and the country’s agricultural and agroindustrial community.

Four centers scattered throughout Ecuadorian territory are the new pillars of public education. If we only think of them as universities, we would be omitting many of their features. These institutions have been designed to generate knowledge in different areas that range from art to bioknowledge; from technology production to education. In summary, they are articulated centers focused on their immediate surroundings and devoted to generating wealth (knowledge) for their closest reality and society in general. The circuit of the new public higher education teaching centers of Ecuador, which guarantee gratuitous admission and the highest standards, seeks to project the country as a nation that exports wealth in the form of knowledge. Since 2007, the Ecuadorian State’s investments in higher education exceed 7348 million dollars – the highest in the country’s history.

Yachay’s Master Plan is based on new urbanism that will provide its people with integration and development spaces at all levels (housing, employment, trade, services.) It was designed by Korean firm IFEZ (Incheon Free Economic Zone) and was discussed by 30 international experts from institutions like Harvard, Yale, Cambridge, UCL, and others.

YACHAY CITY Yachay is a city built to generate knowledge.

This unprecedented model in Latin America, which places Ecuador at the region’s vanguard in knowledge development, will focus on technological innovation and aims to become an engine for development in the country.

Interaction among the four zones will be of the essence since it is aimed to integrate the

REPUBLIC OF OPPORTUNITIES I THE CENTER OF THE WORLD

IKIAM UNIVERSITY

12

THE INSIDE CHOICE THE CARDINAL POINTS OF HIGHER EDUCATION

The goal of Ikiam University – which in the Amazon local Shuar language means ‘jungle – is to become a live laboratory. This is the reason why the facilities of this higher education institute are located in the Amazon, where thousands of wild forest hectares will be converted in the source of new knowledge with the purpose of using live wisdom.

This project’s first campus is located on the Colonso-Chalupas Reserve, a setting that makes it a project aimed to the smart use of natural resources. Students can explore this natural refuge of 93k hectares from the Andean paramo to the tropical forest – six ecosystems full of knowledge ready to discover. Ikiam will include the schools of phytopharmaceuticals and food, hydric resources management, geology, and agroecology. The first phase was inaugurated in 2014.

TIMES MORE INVESTMENT IN RESEARCH THAN BEFORE

Last year, investment in research went from 1 to 12 million dollars. Until 2017, R&D investments will be increased from 0.35% to 0.78% of the Gross Domestic Product (GDP.) hasta 2017.

35 EDUCATION

INTERNATIONALBACCALAUREATE Ecuador’s ongoing educational revolution envisioned the need for fiscal schools to offer an internationally acknowledged degree in order to facilitate graduate students’ access to universities all over the world. The International Baccalaureate Program is an innovating proposal that was created to prepare national students for a globalized and interconnected world by developing different skills, abilities, and knowledge. Ecuador is currently the only country in the world having made an alliance with International Baccalaureate to certify public high school graduates. The benefits of International Baccalaureate include

quality educational programs and professional development activities that generate qualified educators and collaborating professional learning communities as part of a prestigious World Schools Network that works in a cooperative spirit.

Through this integral project and efforts shared between the Ministry of Education, authorities, teachers, and students from different education centers, around 200 fiscal institutions now include this academic offer, which is part of an ambitious goal that seeks to provide 500 public schools with this certification.

200 ECUADORIAN FISCAL INSTITUTIONS OFFER THE INTERNATIONAL BACCALAUREATE CERTIFICATION TO THEIR STUDENTS

THE OUTSIDE CHOICE: SCHOLARSHIP STUDENTS OUTTO THE BEST UNIVERSITIES (PLEASE SEE PAGE 68) The mission of students who travel abroad with scholarships granted by Ecuador is to continue their studies and import the knowledge and quality standards from the world’s best universities. The program consists in granting full scholarships to outstanding students who need to specialize in certain areas of national interest and, in return, they will bring home and share such knowledge. While studying abroad students act as ambassadors of Ecuador and are entrusted with consolidating ties with prestigious universities to create alliances and development programs.

REPUBLIC OF OPPORTUNITIES I THE CENTER OF THE WORLD

36 EDUCATION

ACCORDING TO THE EXPAT INSIDER SURVEY, IN 2014 & 2015 ECUADOR WAS CHOSEN AS THE BEST PLACE TO LIVE BY EXPATRIATES.

MILLENNIUM SCHOOLS No matter in what region of Ecuador they are located, the purpose of the Millennium Educational Units (UEM) is to assure the highest quality infrastructure on the way to achieve the utopic statement that says that regardless of where children are born, they must all have equal opportunities. From the academic and technical point of view, the UEM’s seek to cover all students’ needs during their 13 years of basic education. The goal is very ambitious but clear – to create the world’s best high school graduates.

When children study in centers that are built considering all their development needs they will have better aspirations and demands from society. The old schools, built without correct planning and with clear deficiencies, will be closed and the resources invested in such schools will be used in the UEM’s. At present, 55 UEM’s operate throughout the country. Ecuador’s current goal is to build 300 by 2017.

31 95 more than

%

of students in the Coast have changed from the private education system to the State education system. In the Sierra, the figure is 26%. Investment in education assures improved gratuitous basic education.

REPUBLIC OF OPPORTUNITIES I THE CENTER OF THE WORLD

%

of children and teenagers are registered in an education institute in the country. This is decisively aiming to a virtual universalization of access to education.

PART II

SPACE MACH INE RY

A ROAD NETWORK THAT UNITES THREE WORLDS COAST/ANDES/AMAZON

39 ROAD CHANGE

BETWEEN 2007 AND 2016, ONE EMBLEMATIC WORK HAS BEEN INAUGURATED IN ECUADOR EVERY TWO WEEKS, WHICH SHOWS ITS COMMITMENT WITH THE NATION.

A STORY ON ROAD EVOLUTION IN 9,736 KM

ONE OF THE COUNTRY’S MOST VISIBLE CHANGES IS THE EMBLEMATIC IMPROVEMENT OF ITS ROAD INFRASTRUCTURE. THE 9,736 KM OF NEW ROADS NOW SHOW THE COUNTRY’S NEW FACE. ALL ECUADOR IS NOW AVAILABLE FOR YOU.

T

%

95

en years later, the roads seemed to have survived years of war. We were unable to visit paradises that were unknown until then, both to nationals and foreigners. Roads were unnecessarily winding and inefficient; to trade their products, peasants were forced to travel impossible paths. That was Ecuador’s road reality. Today, after an investment of around 9 billion dollars since 2007 —the governments in the prior 6 years barely invested 1.5 billion — the change of routes all around is evident: now more than 6,000 miles connect Ecuador in an optimal way. The road system, which is made to last from 30 to 40 years as it is being built

OF THE COUNTRY’S ROAD NETWORK HAS BEEN RECOVERED UP TO DATE

with the best quality materials, rigid and flexible pavement, is considered the second best in South America. The nation’s road reconstruction priority is clear; works must be performed by decree, 24 hours per day, 365 days per year. The renewal of roads has deeply changed the lives of Ecuadorians. The connection of its three regions — Coast, Highlands, and the Amazon— is more efficient than ever; transfer times have been drastically reduced; and new roads have been enabled to integrate all provinces and promote the development of trade and tourism to make the country a unit and develop a new era of opportunities. ROE

REPUBLIC OF OPPORTUNITIES I THE CENTER OF THE WORLD

40 ROAD CHANGE

THE ROUTES OF DIVERSITY

CANADA

In Ecuador you can enjoy a beach on the Pacific Ocean in the morning, the fresh sea breeze and pleasant morning sun; grab a ball of snow from a huge volcano at noon; and finally sail on a river in the middle of a tropical jungle in the evening. This is only one of the several possible routes you can plan to get to know the country. An example of this transversal trip that crosses Ecuador’s three regions is the road axis that will connect the Manta deepwater port to the Providencia River port in the Ecuadorian Amazon.

USA

This strategic road will unite the Pacific countries to the Brazilian jungle and establish a strategic trade route for the entire region. The Pan American Road (E35 Sierra Trunk), which connects Ecuador to its neighbors Colombia and Peru, crosses the Andean Cordillera and the 70 majestic volcanoes that enchanted German scientist Alexander von Humboldt during his visit to the country. Some of the new roads revealed Ecuador and a paradise world, which was impossible to access a few years ago. Perhaps one of the most spectacular beauty journeys is the route from Riobamba, in the central Sierra, to Macas, a beautiful Amazon city.

This journey, which 40 years ago used to take 11 days due to the lack of roads, now can be completed in three hours. The road crosses one of the country’s most beautiful landscapes: the descent from the Sierra to the Oriente through Sangay National Park. Lakes, fauna, and endemic flora, active volcanoes are some of the natural wonders that were concealed by the difficult access to the zone. The same happens with the road that links Quito and Pedernales, the beach on Parallel Zero, the geographically closest beach to the capital. At present it takes three and a half hours to get to this heavenly beach of huge palm trees and wide beaches.

HAITI COSTA RICA

PANAMA

N

4. VENEZUELA

COLOMBIA

ECUADOR

PARAGUAY CHILE S

SCORES, WHERE 7 IS EXCELLENT AND 1 EXTREMELY POOR 3.5

7 BEST

> 3.5

1 < 3.5

WORST

ROAD RANKING Based on a worldwide survey, the Economic World Forum established that Ecuador’s roads are South America’s second best in infrastructure quality.

REPUBLIC OF OPPORTUNITIES I THE CENTER OF THE WORLD

5 TOP ROADS 5.7 1. USA 2. CANADA 5.6 3.CHILE 5.4 4. PANAMA 4.8 5. ECUADOR 4.6

5 WORST ROADS 1. HAITI 2.2 2. PARAGUAY 2.5 3. COLOMBIA 2.6 4. VENEZUELA 2.6 5. COSTA RICA 2.7

41 ROAD CHANGE

CIRCULATION TIMES FOR ECUADOR’S ARTERIAL ROADWAYS N Esmeraldas

300km

PERMANENT SNOW ON THE EQUINOX

Pedernales

236km

CITIES

Quito

STRETCH LENGTH: 582.93 miles (E35) CONNECTION: Crosses Ecuador from North (Colombia) to South (Peru)

Pifo Orellana

Manta

362km

300km Portoviejo

329km

Juján 327km Guayaquil

390km

FORMER TIME

TIME SAVINGS

CURRENT TIME

QUITO - PORTOVIEJO

6:40

5:15

1:25

QUITO MANTA (CHONE ROCAFUERTE)

7:00

5:25

1:35

QUITO - STO DOMINGO JUJÁN - GUAYAQUIL

7:15

5:45

1:30

QUITO - PEDERNALES

4:45

3:30

1:15

PIFO - ORELLANA (EL COCA)

5:40

4:30

1:10

SOURCE: SENPLADES MTOP DISEÑO EDITORIAL MAS Q MENOS

UNSPOILED PACIFIC COAST STRETCH LENGTH: 478 miles (E15) CONNECTION: Ecuadorian Pacific Coast

OTHER RELEVANT PUBLIC-PRIVATE INVESTMENT PROJECTS IN THE COUNTRY RÍO 7 HUAQUILLAS

SANTO D. QUEVEDO

QUEVEDO JUJAN

SANTO D. ESMERALDAS

TOTAL

INITIAL STATE INVESTMENT

$ 151 MM

$ 90 MM

$ 90 MM

$ 189 MM

$ 520 MM

TOTAL PRIVATE INVESTMENT

$ 877 MM

$ 1139 MM

$ 1475 MM

$ 805 MM

$ 4296 MM

CONCESSION TERM

30 years

30 years

30 years

30 years

-

LENGTH

95 km

100.1 +13 km

113.1 + 13 km

170 km

504.2 km

SHORT-TERM INVESTMENT

$ 256 MM (3 years)

$ 530 MM (5 years)

$ 951 MM (5 years)

$ 456 MM (5 years)

$ 2193 MM

TOLLS / RATES

3 / $ 1.50

3 / $ 1.50

3 / $ 1.50

3 / $ 1.50

-

STATE CONTRIB / YEAR

$ 13 MM

$ 15 MM

$ 25 MM

$ 7 MM

$ 60 MM

DIRECT EMPLOYMENT

300 jobs

400 jobs

500 jobs

400 jobs

1600

INDIRECT EMPLOYMENT

750 jobs

1000 jobs

1250 jobs

1000 jobs

4000

DATE AWARD

1/02/2016

1/10/2016

1/10/2016

1/10/2016

-

SUPER HIGHWAYS SOON IN ECUADOR Another great change that came with renewing the roads is timesavings. This incentive to trade and tourism also expands the country by granting more time to enjoy it. One example is the multiple connections between the country’s two main cities —Quito and Guayaquil. Before, both cities were connected through one road and it

took 7-8 hours to get to them. Today it takes six hours and there are two alternatives; one road runs next to Ecuador’s oldest church (Balbanera) and crosses Pallatanga, a subtropical paradise full of wonderful waterfalls and surprising landscapes.

Last year we started building highways that will allow mobilization of 20,000 to 50,000 vehicles

between strategic points of Ecuador. This project is planned to conclude by 2037 with important investments for infrastructure improvement, and the construction of ports, airports, and railroads as well. In these years we have witnessed the results of the road construction to generate new development strategies. ROE

REPUBLIC OF OPPORTUNITIES I THE CENTER OF THE WORLD

REPUBLIC OF OPPORTUNITIES I THE CENTER OF THE WORLD

t present Ecuador uses only 15% of its hydric energy generation potential. n 2016, once the new hydroelectric plants built in the country start operating, this figure will be multiplied and the annual net production value of 21 194 GWh will be reached. This powerful development will allow Ecuador to join the regionâ&#x20AC;&#x2122;s group of countries that generate more than 90% of its power through renewable sources, i.e., Guyana and Paraguay. This project not only includes an increased use of energy in a country where industrial development is being promoted, but also the implementation of large transportation projects and other services. Energy and productive development are, hence, connected in this way, and in two years Ecuador will have energy to continue taking sound steps towards change. ROE

AI

ECUADOR IS CURRENTLY DEVELOPING A HIGH VOLTAGE STRATEGY. WE ARE RENOVATING OUR ENERGY SOURCES IN ORDER TO MAKE THEM SUSTAINABLE THROUGH EIGHT NEW HYDROELECTRIC PLANTS. THE COUNTRY WILL MAKE A LEAP THAT WILL TAKE IT BOTH TO THE LONG-AWAITED ENERGY SOVEREIGNTY AND TO GENERATING CLEAN ENERGY WITH EXPORTING CAPACITY.

CLEAN ENERGY SOURCES

42 ENERGY SECTOR

CHANGING THE WAY HOW WE MAKE ENERGY

This Plan includes energy generation from renewable sources, oil import reduction, eventual byproduct exports, and an increased citizen trend to renewable energies consumption. ROE

44 ENERGY SECTOR

IN 2015, PUBLIC OPINION STUDY LATINOBARÓMETRO APPOINTED ECUADOR AS THE REGION’S COUNTRY WITH THE BEST RATES OF CORRUPTION REDUCTION AND THE FAIREST DISTRIBUTION OF WEALTH.

COCA CODO SINCLAIR PROJECT

2

The symbol of this energy transformation is located in the traditionally farming canton of El Chaco, located in the province of Napo, in the Amazon. Codo Sinclair is located on the Quijos and Coca riverbeds, which is an optimal site to develop the country’s largest hydroelectric plant.

It is indisputably one of the most important constructions in Ecuador – it has generated more than 6,000 direct jobs and 15,000 indirect jobs.) Its construction techniques are unprecedented in the country. In spite of the

engineering challenges, the project will start in the expected year: 2016. This project by itself will generate 1500 MW, i.e., 36% of the current national demand. The project approach includes diverse social responsibility aspects: 30% of the project’s economic surplus will be allocated to the neighboring towns. Additionally, other sensible actions include underground water tunnels with minimum ecological volumes to protect the natural surroundings and river species. ROE

COCA CODO SINCLAIR IS ECUADOR’S LARGEST HYDROELECTRIC PROJECT THAT WILL PRODUCE 36% OF THE ELECTRIC POWER NEEDED IN THE COUNTRY.

REPUBLIC OF OPPORTUNITIES I THE CENTER OF THE WORLD

BILLION DOLLARS WILL BE THE CONSTRUCTION COST OF THE COCA CODO SINCLAIR PROJECT – 70% OF THE WORKS WILL BE FINANCED BY EXPORT IMPORT BANK OF CHINA

2016

AS OF THIS YEAR ECUADOR WILL PRODUCE 90% OF ITS ENERGY FROM RENEWABLE SOURCES AND, THUS, WILL JOIN PARAGUAY AND SURINAM WHICH ENERGY IS MOSTLY DERIVED FROM THIS TYPE OF ENERGY SOURCES.

45 ENERGY SECTOR

OTHER PROJECTS

TOACHI PILATON

PROVINCE: Santo Domingo de los Tsáchilas OPENING: July 2016 GENERATING CAPACITY (MW): 254.4 PROJECT INVESTMENT: 508 USD MILLION DIRECT EMPLOYMENT: 1565

MINAS SAN FRANCISCO

PROVINCE: Azuay y El Oro OPENING: March 2016 GENERATING CAPACITY (MW): 270 PROJECT INVESTMENT: 556 USD MILLION DIRECT EMPLOYMENT: 1.795

MANDURIACU

PROVINCE: Pichincha & Imbabura OPENING: December 2014 GENERATING CAPACITY (MW): 60 PROJECT INVESTMENT: 192 USD MILLION DIRECT EMPLOYMENT: 2450

DELSITANISAGUA

PROVINCE: Zamora Chinchipe OPENING: 2016 GENERATING CAPACITY (MW): 180 PROJECT INVESTMENT: 266 USD MILLION DIRECT EMPLOYMENT: 805

QUIJOSIACU

PROVINCE: Napo OPENING: March 2016 GENERATING CAPACITY (MW): 50 PROJECT INVESTMENT: 138 USD MILLION DIRECT EMPLOYMENT: 436

SOPLADORA

PROVINCE: Azuay-Morona Santiago OPENING: February 2016 GENERATING CAPACITY (MW): 487 PROJECT INVESTMENT: 755 USD MILLION DIRECT EMPLOYMENT: 2655

MANDURIACU

PROVINCE: Cañar OPENING: December 2014 GENERATING CAPACITY (MW): 21 PROJECT INVESTMENT: 51 USD MILLION DIRECT EMPLOYMENT: 1150

Total: GENERATING CAPACITY : 2822 MW PROJECT INVESTMENT: US$ 4413 MILLION DIRECT EMPLOYMENT: 17317

REPUBLIC OF OPPORTUNITIES I THE CENTER OF THE WORLD

46 PRODUCTIVE ECUADOR

FORMER ECUADORIAN VICE PRESIDENT LENIN MORENO WAS NOMINATED PEACE NOBEL PRICE IN 2012 FOR HIS WORK IN FAVOR OF DISABLED PEOPLE.

ECUADOR A PRODUCTIVE COUNTRY OF OPPORTUNITIES A COUNTRY’S PROSPERITY RESULTS FROM THE CONTRIBUTION OF ITS DIFFERENT ACTORS. ECUADOR IS AWARE OF THIS AND HAS DEVELOPED IMPORTANT STRATEGIES AND REGULATIONS THAT CREATE LINKS IN THE PUBLIC AND PRIVATE SECTORS, AND GRANTS MAJOR INCENTIVES AND ASSURANCES FOR NATIONAL AND FOREIGN INVESTORS.

T

he transformation we see in Ecuador would not be complete without the drive and strategic development of its productive engine through policies, actions, plans, and efforts performed from the Public Administration. In this sense, the country’s vision includes a deep renewal based on social justice and equality, observance of individual right and nature’s rights, always having common wellbeing as a priority. In this way, Ecuador becomes a country that allows equal opportunities by granting access, not only to conditions that guarantee a good quality of life, but also through productive goods, credits for investment, training, and support to citizen entrepreneurship. The country is aware of the ups and downs of an increasingly changing world and has bet on education: with more than 10k scholarships granted to students in the world’s best

REPUBLIC OF OPPORTUNITIES I THE CENTER OF THE WORLD

universities, many of whom have already come home and are contributing to the industries and generating knowledge. In the same line, Ecuador has radically increased its educational system by consolidating firstlevel public institutions for all grades (elementary, high school, universities); and by creating two academic milestones, such as The City of Knowledge Yachay and Amazon University Ikiam. Likewise, from the legal sphere, efficient instruments have been developed to allow national industry growth through incentives addressed to the public-private association and, as part of the project that started years ago with the aim of renovating the State, we are working for increasingly agile, transparent, efficient, and organized public institutions and services. ROE

The construction of a Republic of Opportunities is part of an integral proposal that includes drive and strengthening in the areas of productivity, competitiveness, export increase, selective substitution of imports, growth of tourism, and more foreign investment.

AN INTEGRAL PROPOSAL

48 PRODUCTIVE ECUADOR

PROMOTION OF PUBLICPRIVATE INITIATIVES A sound economy sustained on commerce that generates wealth that turns into development for the country and wellbeing for its citizens is only possible with joint work between the private sector and the State. It is precisely with this spirit that the Ecuadorian Government created the Organic Law on Incentives to Public-Private Association and Foreign Investment (APP), with the purpose of stimulating the economy through the generation of entrepreneurship executed under this modality. Such legal body stipulates specific incentives to finance productive projects and national and foreign investments for the provision of the goods, works or services required by the State and local governments. These incentives to the private sector include income tax payment exemption for 10 years, exemption of the import currency outcome taxes, payment of services, financing, profit or dividends, as well as the same exemptions a public company has on foreign trade taxes, as well as legal stability in the essential aspects of investments and incentives.

An Inter-Institutional Committee is in charge of determining general interest projects that may be contracted under the public-private association model and gives priority to areas that include infrastructure, urban development, real-estate projects linked to roads and port and airport. Ecuador, hence, creates links between the public and private sector for national development that boosts the road to the country’s productive transformation. ROE

REPUBLIC OF OPPORTUNITIES I THE CENTER OF THE WORLD

8,077 MILLION DOLLAR INVESTMENTS GENERATED IN INFRASTRUCTURE AND HOUSING – ONE OF THE GOALS STIPULATED BY THE ORGANIC LAW ON INCENTIVES FOR PUBLICPRIVATE ASSOCIATION AND FOREIGN INVESTMENT.

49 PRODUCTIVE ECUADOR

PRODUCTION, COMMERCE, AND INVESTMENT FOR GOOD LIVING

4,971 MILLION DOLLAR IS THE APPROXIMATE TOTAL AMOUNT OF INVESTMENT CONTRACTS APPROVED BY THE ECUADORIAN STATE WHEREBY MORE THAN 6K DIRECT JOBS AND THOUSANDS OF INDIRECT JOBS HAVE BEN GENERATED.

Ecuador, based on the ancestral philosophy of Good Living and the Constitution, which provides the construction of a fair, democratic, productive, solidary, and sustainable economic system, supported on equitable distribution of the benefits of development, Ecuador has issued a document that governs the rules of the productive process as a whole: production, distribution, exchange, trade, consumption, external factor management, and investments. It offers enhanced security and incentives for national and foreign investors, and promotes the transformation of the productive matrix, which was historically based on the exploitation of oil and raw materials. Today it seeks to generate wealth upon activities linked to human talent, technology, and knowledge. The Organic Code on Production, Trade, and Investments (COPCI) became effective in Ecuador in 2010. Its benefits for the investors are protected under the Organic Law on Incentives to Public-Private Association and Foreign Investment, which also are accumulative and, thus, depending on the type of investment, a company or association may access to several incentives at the same time. Also, this regulation grants specific benefits for companies that perform their activities in Special Economic Development Zones and provides a tool called ‘investment contract’ to freeze the benefits granted during the contract’s term. The incentives granted to such companies that believe in the country are the State’s tax efforts and are proof of Ecuador’s reliance on the corporate sector. ROE

WITH AN INVESTMENT THAT EXCEEDED USD 9,000 MILLION ONES AS OF 2007, ACCORDING TO A REPORT FROM THE WORLD ECONOMIC FORUM, ECUADOR HAS THE REGION’S BEST ROAD STRUCTURE.

REPUBLIC OF OPPORTUNITIES I THE CENTER OF THE WORLD

PHOTO VOLTAIC PLANT

This plant is located in Puerto Ayora (Galapagos) and its construction is part of the project that seeks for the use of 0% fossil energy in the Archipelago. ROE

PART III

SO CIO NAU TS

ESTUARDO MAZARIEGO

53 INTERNATIONAL FIGURE

IN 2015 FOREIGN INVESTMENT RECORDED A GROWTH OF 37.1% IN RELATION TO THE FORMER YEAR, MAINLY DUE TO THE PROMOTION OF PUBLIC-PRIVATE INITIATIVES THAT GENERATED 8,077 MILLION DOLLARS OF INVESTMENT FOR INFRASTRUCTURE AND HOUSING.

“ECUADOR WAS THE FIRST SOUTH AMERICAN COUNTRY WE SAW WAS ATTRACTIVE TO INVEST”

E

stuardo Mazariegos is the General Director of Tesalia CBC (Central America Bottling Company) in Ecuador, and Financial Vice President of CBC. He holds an MBA from Incae with emphasis in Economics. He has devoted 15 of his 40 years to this company and, thus, has vast experience in the areas of sales, distribution, operations, finance, and others. In this interview he tells us the reasons why CBC invested in Ecuador – the country’s strengths and the future projections of the country he represents.

How do you see the evolution of beverage production and consumption in the country?

This industry is constantly growing. As a company, we have prepared ourselves to invest in the market for the future to expand our lines’ production capacity. We have invested in machinery thinking of that growth. The country has many opportunities – one of them is the behavior of consumers who assimilate new proposals and innovations very well and are in constant search for new trends. Flavors and colors grant each region in Ecuador with a unique identity and I believe we have exploited very well this feature that allows us to explore consumers’ tastes.

Ecuadorian consumers highly value the introduction of new proposals and Tesalia CBC is a leader in this

REPUBLIC OF OPPORTUNITIES I THE CENTER OF THE WORLD

54 INTERNATIONAL FIGURE

IN ORDER TO COMPLY WITH THE GROWING LOCAL DEMAND WE MADE INVESTMENTS IN 2014 AND 2015. IN THE CASE OF GĂ&#x153;ITIG, INVESTMENTS ALLOWED US TO MEET THE DREAM OF STARTING ITS EXPORTING PLAN TO GUATEMALA SINCE THE SECOND SEMESTER OF 2015.

field since more than 80% of our portfolio has a national component resulting from local products, always thinking in the change of the productive matrix in Ecuador and promoting responsible consumption, which goes hand in hand with the promotion of healthy life styles.

It is also important to continue betting on value added products that adapt to such new trends.

Our sector is bery dynamic and, in our case, the arrival of CBC to Ecuador since 2012, allowed us to invest in integrating national emblematic brands, such as Tropical, Manzana, and Pure Water. Investments have been made in all of these brands to strengthen them and, in some cases, to internationalize them.

In order to comply with the growing local demand we made investments in 2014 and 2015. In the case of GĂźitig, investments allowed us to meet the dream of starting its exporting plan to Guatemala

REPUBLIC OF OPPORTUNITIES I THE CENTER OF THE WORLD

since the second semester of 2015. We will also develop several new projects to start competing in other categories. The production of Jugazzo (fruit nectar) for local consumption and exports to Colombia, by means of an agreement with Colombina, is a goal we set two years ago and we now are looking at a quite significant growth in our exports plans.

What are your production strengths towards the external markets and the main destinations with which you work?

We are convinced that the first step to strengthen national industry is to efficiently meet the growing local demand. Ecuador was the first South American country we saw was attractive to invest because of the professional level of its people, its economic stability, and location. Additionally, it is a highly diverse country that allows us to offer a broad portfolio for each consumption occasion.

55 INTERNATIONAL FIGURE

One of our company’s strengths is that it has brands that are highly appreciated for their quality and evolution. Güitig, Tesalia, 220V, Tropical, and other beverages in our portfolio are clear proof that we can internationalize because we have exportable quality. Investing in our people is a priority for Tesalia CBC. Constant training is vital.

Our sales force and collaborators are ready to assume the new market challenges. We also have technological tools that allow us to compete inside the country and abroad in terms of efficiency; and we can proudly say that several of our Ecuadorian collaborators are now holding leading positions for several of our operations in Latin America.

When we talk about international markets, we talk about valuable opportunities in the amount of countries we operate. Ecuador, in this case, will become an export hub for CBC to other markets in South America. In 2015 we consolidated a new operation in Peru and we are working to meet this great goal by exporting brands that are highly appreciated in that country. Our commercial relation with Colombina for nectar exporting has also been successful and we are sure there are more opportunities that we can explore in the region.

What moved CBC to invest in a traditional Ecuadorian company such as Tesalia?

CBC is PepsiCo’s oldest bottler outside the United States. We were selected as the anchor bottling company that lead us to look for new markets, because we believe in our capacity.

In the beginning our expansions plan to other Latin American countries that have the brand Pepsi was the reason why we came to explore Ecuador. When we arrived Tesalia’s history as a company attracted us, because of Güitig and its unique world-class quality, and because efficiency is a key pillar to reach productivity in the industrial sector.

What potentialities or benefits does the Ecuadorian market offer to foreign investors?

Ecuador has the bases for sustainable growth due to several factors: it is a dollarized country, which allows preserving the value, and stability.

Here we are able to implement international excellence parameters in processes, quality standards, management, distribution, technology, and its people’s professional development. Its dynamic market is another great attraction as well as, undoubtedly, the economic stability that the country has lived in the last year and allows generating confidence to invest. In the last years, 78% of Ecuador’s DGP is explained by consumption. Another interesting datum is that the main home expenditure item is “Food and non-alcoholic beverages”, which accounts for 22.6% of consumption according to 2012 data, a similar participation as in 2004 (22.7%).

Consumption levels have been growing in the last years and this is an excellent area of opportunity for investors in our sector.

Does the Ecuadorian legislation offer adequate conditions to invest

in this country?

We believe that there are always areas of opportunity and reasons to improve conditions.

The Public-Private Alliance Law, the investment contract model that provides investors with stability, the incentives law addressed to the productive sector, inter alia, is clear proof that Ecuador has its arms open to receive foreign entrepreneurs and continue listening to proposals to improve these conditions. This new law will allow many entrepreneurs to see Ecuador, as we saw it from the moment we officially came to this wonderful country in 2012.

What markets are scarcely known in the country and could be an interesting business niche for foreign investors?

The development of local raw materials in the food and beverages sector is undoubtedly one of these markets. Also, Ecuador is on its way to becoming an important touristic power, and this is a sector that must be exploited to search for new investors, like the petrochemical industry and others. Our benefit, in this case, would be the investment return in a shorter period than we had expected.

Regarding CBC growth in Ecuador, in what projects are you working at present?

The exports area is one of our priorities and we will continue working to grow and take our brands farther. In the future we will continue consolidating our comparative advantage of being the company with the region’s broadest portfolio. We adapt our company to the needs of our consumers and continue working in our programs that add value to the communities where we operate. Taking care of and protecting the water sources and education will continue being aggressive projects both inside Ecuador and abroad. To continue investing is the bet we will make on the country. ROE

REPUBLIC OF OPPORTUNITIES I THE CENTER OF THE WORLD

CARLOS LEIRIA

57 INTERNATIONAL FIGURE

WITH AN APPROXIMATE INVESTMENT OF 2.12% FROM ITS GDP, ECUADOR IS ONE OF THE LATIN AMERICAN COUNTRIES THAT INVESTS MORE IN EDUCATION.

“WE BELIEVE WE CAN CONTINUE INVESTING IN ECUADOR IN THE FUTURE”

C

arlos Leiria Pinto is in charge of the Andean Region for the International Finance Corporation, IFC, which is part of the World Bank Group and the largest multilateral development institution exclusively devoted to promoting the private sector. His responsibilities include supervising a broad portfolio in the region and new investments that, in 2014 approached 700 million dollars. In early December 2015, IFC, together with Tonicorp and Coca Cola, signed a credit agreement for 90 million to build a plant in the province of Guayas. The following interview details the entity’s vision on Ecuador and the investment opportunities they are presenting

How does your entity’s financing contribute to the development of nations?

IFC is the World Bank Group’s institution that supports development in the private sector. Our activities in developing countries seek to support sectors that are essential for the country’s social and economic development. This includes a range of sectors, like agroindustry, microfinance, manufacturing, and many more. One of our main goals is to promote employment generation and we have seen microenterprise and SMEs are a drive for employment generation. This is why we are

REPUBLIC OF OPPORTUNITIES I THE CENTER OF THE WORLD

58 INTERNATIONAL FIGURE

WE HAVE SEEN GREAT POTENTIAL IN THE TOURISM SECTOR, WHICH CAN BE A GREAT QUALITY EMPLOYMENT GENERATOR. JOBS IN THE TOURISM SECTOR USUALLY HAVE SIGNIFICANT MULTIPLYING EFFECTS

focused on promoting the access to financing for these companies.

How does the IFC see Ecuador?

IFC’s support to Ecuador is aligned to our strategy for the country that seeks to generate employment and creating a more inclusive surrounding for all economic sectors. IFC’s support to Ecuador started when the country became a member of the Institution in 1956.

Since then IFC has invested around 540 million dollars in the country.

Why do you believe Ecuador is a priority and strategic country?

There are sectors in the economy, like exports and the farming, with huge potential that can promote the country’s economic development.

One of our main goals is to provide financing

REPUBLIC OF OPPORTUNITIES I THE CENTER OF THE WORLD

and technical assistance to companies with positive impact on the exports sector. We also want to support projects that address climate change, generate employment, and benefit the population’s disregarded groups. We are now doubling our efforts in the country. In our last fiscal year 2015, IFC committed to invest 100 million dollars. And for the next fiscal year that ends on June 2016 we expect to duplicate this figure and reach 200 million. This shows our commitment to Ecuador’s development.

What economic sectors do you believe are most interesting to invest in the Ecuadorian economy?

In the financial sectors, for example, we have seen the possibility of supporting local financial entities to help increase loans to

59 INTERNATIONAL FIGURE

SMEs, particularly women-owned businesses.

Another potential sector we have considered is shrimp exporting companies that can help steer exports. In 2014 the shrimp sector reached 10% of Ecuador’s total exports and 37% of nonoil companies. Besides, we have seen companies that are driving this industry’s sustainable growth.

Which sectors that are not internationally widely known could be of interest to foreign investors?

We have seen great potential in the tourism sector, which can be a great quality employment generator. Jobs in the tourism sector usually have significant multiplying effects and generate up to three new indirect jobs per each direct job. This is one of the main reasons for IFC’s support to the hotel sector in developing countries. Hotel projects also stimulate the local economic activity and keep high standards for the workers.

What factors does IFC consider are a priority for funding?

Does Ecuador meet such requirements?

Our allies are private companies and this is why we must be sure there is a demand for our products. We are seeing this in Ecuador because there are companies interested in the integral solutions that IFC provides to our clients. Our services are designed to meet the specific needs of these companies in the different industries with special emphasis on manufacturing, agroindustry, services, and financial markets. Besides this we need for companies to be willing to work under our performance rules and willing that are designed to guide our clients in identifying risks and impacts, in order to help prevent, mitigate, and handle risks and impacts as a way of doing sustainable business. In Ecuador we have

seen there is demand for our products and companies, as well as the disposition to take advantage of IFC’s experience in sustainability topics to improve their operations.

What aspects were analyzed before granting ARCA the credit to invest in Ecuador?

The rural sector is essential for the development of Ecuador and companies like ARCA which, through Tonicorp, work hand in hand with small farmers to get the raw materials for its products, have a huge positive impact on the country’s sustainable development. This initiative is addressed to promote the use of the best global practices in environmental and social topics, and our alliance with Tonicorp will be used as an example for the entire sector nationwide.

Implementing the best environmental and social practices generates enhanced corporate transparency, responsibility, and operative efficiency. This helps companies to have

their suppliers as allies and grow in time in a sustainable way.

The food and beverage sector is increasingly important for the Ecuadorian economy, and this investment will be a strong impulse for this industry. This project is also aligned very well because it generates a value chain in the rural sector, which will enable may small cattle-raisers to benefit from Tonicorp’s increased production capacity.

What other companies or entities have requested investment services in Ecuador?

We have worked with many companies in different sectors. Recently, we granted a loan to Banco Internacional in order to promote credit for SMEs, and a part of the financing is being destined to women-owned SMEs. The purpose of this loan is to encourage access to financing in Ecuador and helps develop SMEs, which play an essential role in the country’s economic development. This investment will have a positive impact for Ecuador since it is estimated that around 57% of formal employment in countries like Ecuador are generated by SMEs.

Are there conditions to continue supporting investments in other sector of Ecuador?

We definitively think we can continue investing in Ecuador in the future. Our recent investments and plans to continue supporting companies in the country are proof of IFC’s commitment to Ecuador’s sustainable development. ROE

REPUBLIC OF OPPORTUNITIES I THE CENTER OF THE WORLD

VILLONACO WIND PARK

This 16.5 MW Plant has 11 air generators and is the first of this type in the world with an average annual speed of 12.7m/s at 2,700 masl. ROE

PART IV

INTO THE FUTU RE

62 INFOGRAPHICS

ENERGY NET ANNUAL ENERGY PRODUCTION (GWh)

25,000 20,000 15,000

2015*

2014

2013

2012

2011

2010

2009

2008

2007

2006

2005

2004

2003

2002

5,000

2001

2000

10,000

0 Source: CENACE â&#x20AC;&#x201C; Transaction Bulletins

One decade ago the country was undergoing several problems with electric power supply, mainly related to the access to electricity, discontinued services, and the need to import energy from our neighbor countries. Nowadays, Ecuador has more than 95.5%

STATISTIC DATA PROJECTED FROM THE NATIONAL INTERCONNECTED SYSTEM

80.49%

GWh - 2016

of electric coverage, continued services, and energy imports have dropped. This was possible due to the investments that have improved electric generation in the country. For this year generation is estimated to increase in around 5%.

21,194.73

80.49% 55.47%

21,194.73

GWh 2013

10,646.82

43.45%

55.47% 8,340.31

10.646,82

43.45% 8,340.31

18,35% 4,832.49

18,35% 4,832.49

HYDROELECTRIC

2013

THERMOELECTRIC

0.80%

0.77%

0.26%

154.08

202.31

49.56

62.55

0.80%

0.77%

0.26%

154,08

202,31

49,56

BIOMASS

0.01%

0.24%

WIND

2.46

0.24% 62,55

MW - 2016

41.66

3.45%

662.34

0.01%

0.16%

2,46

41,66

PHOTOVOLTAIC

2,259.49 5,059.69

2,250.38 2,500.17

REPUBLIC OF OPPORTUNITIES I THE CENTER OF THE WORLD

TOTAL

101.30 144.30

16.50 16.50

3.50 24.46

0.07%

17.41

IMPORTS

2016

EFFECTIVE INSTALLED POWER

MW - 2013

0.16%

4,631.16 7,745.13

3.45%

662.34

0.07%

17,41.

07%

63 INFOGRAPHICS

ENERGY IMPORTS FROM COLOMBIA (MILLIONS OF DOLLARS) Note:

2013 data taken from CENACE’s Annual Report and Liquidations and, for 2016, from CENACE’s 2015-2017 Biannual Operations Plan

160 140 120 100

The 2016-generation projection taken from CENACE’s 2015-2017 Biannual Operations Plan

80 60 40

Installed power detail from SISDAT reports and new generation data according to the contractors’ reports.

20 0 2004

2005 2006 2007

2008 2009 2010

2011 2012 2013

2014

2015

Source: CENACE – Transactions Bulletins)

Increasing the country’s energy production has direct influence on imports. In past years, without this figure the country would have been unable to cover its electricity demand. Energy imports increased up until 2012; however, different

4,000

projects and plants were developed since 2013, which not only helped reduce the dependency on energy from other countries, but also made exports possible. The outcomes of these projects can already be seen in our foreign trade figures.

PER CAPITA ELECTRICITY CONSUMPTION (KWH PER INHABITANT)

3,500 3,000 2,500 2,000 1,500

7,41.

COLOMBIA

ECUADOR

PERU

MEXICO

BRAZIL

ARGENTINA

0

CHILE

500

VENEZULEA

1,000

Source: CENACE – Transactions Bulletins)

In spite of the development in the field of energy supply, in Ecuador per capita consumption is one of the lowest in the region. This is due to lower energy consumption rates as related to other countries in the region, and the fact that Ecuador

largely covers demand with its own production since in 2013 interconnection energy was 2.77% and in 2014 to this date it is 2.4% ROE

REPUBLIC OF OPPORTUNITIES I THE CENTER OF THE WORLD

64 INFOGRAPHICS

WAGE & P U R C H A S E C A PA C I T Y

2015 MINIMUM WAGE (DOLLARS PPP)

GE

B

UEL

1, 7. 0

1, 25

.1 09 1 ,2

VENEZ

486 .0

PAN JA

U

5.12

WAGES EXPRESSED IN DOLLARS WITH A SAME LEVEL OF PRICES.

PER

48

USA

L

5

7

3

ZI

A

21 8.

A

FR

6.9

R

0

6 1 ,8

ICO

2.

.

71

ME X

ANY

43

N

CE

RM

.3

A

M

BI

A

09

650 ADO ECU

.7

R

6

54. 9 CHIL

1,

N TI

LO

2

A

.

CO

54 7

2 AR G

EN

E

Source: Central Bank of Ecuador

The minimum wage can be compared globally in several countries by applying the PPP methodology (Purchasing Power Parity) that allows handling dollars with the same value among countries (one dollar can’t buy the same amount of goods and services in different countries.) According to this measurement, Ecuador has high wages in the region, and this partially influences in better life conditions for the population. Also, this wage is competitive for the country’s investment development.

REPUBLIC OF OPPORTUNITIES I THE CENTER OF THE WORLD

65 INFOGRAPHICS

AVERAGE REAL WAGE (IN DOLLARS)

30

USD 292.8

USD 274.1

USD 263.3

USD 249.1

USD 236.6

USD 198.3

40

USD 199

50

USD 201.1

60

USD 227.2

25%

USD 221.8

70

USD 204.8

30%

USD 201.4

80

USD 206.1

35%

USD 204.6

90

USD 197.7

40%

USD 194.5

100

15% 10% 5%

20 10

20%

-10% 2000

2001

2002

2003

2004

2005

2006

2007

AVERAGE REAL WAGE (IN DOLLARS)

* By October (it is calculated by December 2014 according to the Consumer Price Index CPI (January - December 2004 = 100) every month as of January 2015, it is calculated according to CPI JanuaryDecember 2014=100 of every month)

2008

2009

2010

2011

REAL WAGE VARIATION

2012

2013

2014

2015*

-5%

ANNUAL INFLATION

The real wage is the value of the average nominal wage divided by the consumer price index of the corresponding month.

Source: Central Bank of Ecuador

PURCHASE RESTRICTION (DOLLARS) 700 600 500 400 300 200 100

BASIC BASKET COST

The increase of wages has also reduced the gap between family income and the family basket cost. In Ecuador, it is estimated that the average home includes four members with 1.6 wages. In 2006 family income

2015*

2014

2013

2012

2011

2010

2009

2008

2007

2006

2005

2004

2003

2002

2001

2000

0

FAMILY INCOME

only covered 66.73% of the family basket. At present this value is close to 99%, and this practically closed the gap between both established values.

Source: Central Bank of Ecuador

REPUBLIC OF OPPORTUNITIES I THE CENTER OF THE WORLD

66 INFOGRAPHICS

EVOLUTION A P R O C E S S T H AT I M P R O V E S T H E C O N D I T I O N S O F L I F E

ACCESS TO UTILITIES

98.4% 91.4%

100

83.3%

90 80 70

78% 60%

60 50 40 30

12.7%

20 10

ELECTRICITY

CORRECT ELIMINATION OF BLACK WATER

1995

MUNICIPAL GARBAGE COLLECTION

2006

PUBLIC DRINKING WATER IN HOMES

PUBLIC SEWAGE NETWORK

OVERCROWDING

2014

Access to utilities and good and dignified housing is established as a fundamental axis in measuring the populationâ&#x20AC;&#x2122;s life conditions, and it is a key component in reducing poverty.

public network inside homes, municipal garbage collection, public sewage network, and the correct elimination of black waters has increased in 11.1, 10.6, 10.5, 8.8 percentage points, respectively.

In Ecuador, access to home utilities has proved strong improvement, particularly when we analyze the changes in the last 7 years. In this period, the percentage of crowded homes has reduced in 9.3 points, while the rest of the services, such as water through the

ECV 2013-2014 shows that services with the largest coverage are electricity and the correct elimination of black waters that reached 98% and 91% in the homes.

Source: INEC

REPUBLIC OF OPPORTUNITIES I THE CENTER OF THE WORLD

67 INFOGRAPHICS

ECUADOR CONCENTRATES 10% OF ALL THE PLANET’S PLANT SPECIES IN ITS TERRITORY.

POVERTY DUE TO THE POPULATION’S UNSATISFIED BASIC NEEDS (UBN)

64.9% 1995

52% 2006

35.8%

2014

Poverty is a complex social phenomenon influenced by multiple factors, which makes it hard to measure.

Nevertheless, it may be studied under two methods: direct and indirect methods. The direct method or poverty per unsatisfied basic needs (UBN) analyzes a home’s effective access to satisfying basic needs: education, health, water, electricity, telephone, etc. In the last 7 years poverty due to BUN in the country was reduced to 31.1%, since it dropped from 52% to 35.8, which represents approximately 1.6 million people overcame this type of poverty.

However, there is less reduction in the rural sector (22.2%) than in the urban sector (35.3%). On the other hand, the indirect method or poverty per consumption evaluates a home’s capacity of having minimum expenditure in food and non-food goods.

Between 2006 and 2014, national extreme poverty and poverty per consumption dropped from 55.4% and 32.6%, respectively, which means around 900,000 people who overcame poverty, while 1.3 million people overcame poverty and appeared as the largest reduction recorded in the last 20 years.

Source: INEC

CONSUMPTION INEQUALITY (GINI COEFFICIENT)

45.5% Per capita consumption distribution inequality, measured with the Gini coefficient, states that national inequality has dropped 4.8 points, from 0.455 to 0.408 in the last 7 years.

This trend has been kept both at urban and rural levels, and prove a reduction of the Gini coefficient from 4 and 4.4 points, respectively.

1995

42.5%

2006

2014

Source: INEC

40.8%

REPUBLIC OF OPPORTUNITIES I THE CENTER OF THE WORLD

68 INFOGRAPHICS

EDUCATION 4,856

2011

2

660 2007 - 2010 1,754

1995 - 2006

37

By October 2014, 9864 scholarships have been awarded for undergraduate and postgraduate studies abroad, i.e., 40 times the number awarded by the former administrations.

2012

Source: Knowledge Strengthening & Scholarship Secretariat and Human Skill Promotion Institute Drafted by: Knowledge Strengthening & Scholarship Under Secretariat Cut date: September 30, 2015

REPUBLIC OF OPPORTUNITIES I THE CENTER OF THE WORLD

11,188

UNDERGRADUATE AND POSTGRADUATE SCHOLARSHIPS AWARDED FROM 2007 TO 2015

8,494 2013 10,000

2014

2015

ABROAD

Technical Notes • This information includes English teachers’ data (GO TEACHER)” for TESL master’s degrees.

• It does not include scholarships delivered for training programs or economic aid.

• The information from the period between 1995- 2006 is shown for comparative purposes

69 INFOGRAPHICS

1%

OTHER PROGRAMS

COLLEGE PROFESSORS

1% SCHOLARSHIP PROGRAMS International cooperation and complement: Financial grants to Ecuadorian nationals by governments and/or institutions.

20%

UNIVERSITY EXCELLENCE

Excellence: Scholarships in the world’s 50 best universities and 25 scholarships in priority areas.

47% OPEN INVITATION

31%

College professors: The purpose is to improve Ecuador’s academic quality by granting scholarships to professors.

Go Teacher: Program designed to improve English teaching by sending English professors to the USA. Open Invitation: Finances fourth-level studies after which the students come back to the country to share their knowledge.

INTERNAL COOPERATION

GRANT HOLDERS PER STUDY LEVEL

5%

GRANT HOLDER PER AREA OF KNOWLEDGE

MEDICAL SPECIALTIES POST DOCTORATE

NATURAL RESOURCES SCIENCES

0,3%

ART & CULTURE EDUCATION SCIENCES

13%

9%

UNDER GRADUATE

63% MASTER’S DEGREE

19%

DOCTORATE

Fuente: : Knowledge Strengthening & Scholarship Secretariat and Human Skill Promotion Institute Drafted by: Knowledge Strengthening & Scholarship Under Secretariat Cut date: September 30, 2015 Technical note: *Does not include international cooperation scholarships

3% 2%

40%

16 % SOCIAL

LIFE SCIENCES

SCIENCES

30%

PRODUCTION & INNOVATION SCIENCES

Fuente: Secretaria de Fortalecimiento del Conocimiento y Becas e Instituto de Fomento al Talento Humano Drafted by: Subsecretaría de Fortalecimiento del Conocimiento y Becas Cut date: 30 de septiembre de 2015

REPUBLIC OF OPPORTUNITIES I THE CENTER OF THE WORLD

70 INFOGRAPHICS

BIODIVERSITY IN FIGURES

MEGADIVERSE COUNTRIES

Ecuador is one of the world’s 17 megadiverse countries. These territories shelter 75% of all of the planet’s vertebrates and plants, that is, they shelter 219K species in only 10% of the planet’s territory. Ecuador is geographically the smallest of all biodiverse countries; however, if we take into consideration the figures reported on registered species per area unit, we can conclude that it is the world’s most biodiverse country.

Source: Ministry of the Environment of Ecuador, Fauna Web Ecuador webpage of the Catholic University of Ecuador, Bioconocimiento Ecuador.

FAUNA IN FIGURES Ecuador has a surface of 256,370 km2, equivalent to 0.17% of the total planet’s surface. Nevertheless, this territory shelters more than

11%

of all land vertebrate species. The country holds the world’s first rank related to the number of vertebrate species per every 1000 sq. km.

FLORA IN FIGURES In 25 Ha Yasuni National Park holds more than 1100 tree species, more than all species in USA and Canada together.

Ecuador has approximately 7% of the world’s registered vascular plants. It also has the largest number of orchids, with 2999 species, of which 43% are endemic – 60% of the Latin American orchids live in Ecuador.

PROTECTED AREAS IN SOUTH AMERICA COUNTRY

Argentina Bolivia Brazil Chile Colombia Ecuador Guyana Paraguay Peru Surinam Uruguay Venezuela

NUMBER OF PROTECTED AREAS

37 22 304 99 56 44 2 30 67 23 11 96

PERCENTAGE PROTECTED LAND SURFACE (%)

1.3 15.5 9 19.2 10 19 2 5.9 14 12.9 1.4 27

Source: The protected areas of Latin America: current situation and prospects for the future, Elbers, J. (Editor)..

REPUBLIC OF OPPORTUNITIES I THE CENTER OF THE WORLD

PERCENTAGE PROTECTED MARINE SURFACE (%)

0.9 6.4 28.3 12.8 0.6 2.9 0.4 0.9

71 INFOGRAPHICS

Ecuador also shelter 18% of all the birds recognized in the world, e.g., the country has recorder 124 hummingbird species, i.e., 35% of the total planet’s population.

Amphibians in Ecuador comprise the third most diverse fauna in the world, with a total of 550 formally described species. Only Brazil and Colombia have a larger variety.

Ecuador leads the list of the 10 countries with the world’s most diverse reptiles – approximately three species per every 2000 sq. km.

ECUADOR’S MAIN ECOLOGICAL ZONES PER ELEVATIONAL GRADIENT

Few humans live in the harsh conditions of the glaciers. The condor and the Andean fox can adapt to these climates with scarce heat and oxygen

GLACIERS

5000

4000 SUPER-PARAMO

PARAMO

SUB-PARAMO

The highest percentage of Ecuador’s endemic plants is located above 4500 masl, which comprises only 2000 sq. km of the entire Ecuadorian territory.

3000 ANDEAN FOREST

CLOUD FOREST

2000

In this zone, which humidity comes from the low zones, there is a broad diversity of orchids and bromeliads, besides birds and toads.

SUBTROPICAL FOREST 1000

TROPICAL FOREST

0

4000 - 6300

1000 - 2500

3800 - 4000

0 - 1000

Under 1000 masl we find a large variety of ecosystems, from tropical forests to dry forests, besides Galapagos, with a unique fauna.

2500 - 3800

Source: Biota Maxima Ecuador Land of Biodiversity, O. Dangles, F. Nowicki, B. Mena.

WWW.ZOOLOGIA.PUCE. EDU.EC/VERTEBRADOS/ VERTEBRATA.ASPX

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MANTA PORT

At present there are more than 300 industrial ships with a capacity that exceeds 2000 metric tons, as well as an average of 3,000 craft fibers which, together with dozens of shrimp boats, are the largest fishing fleet of Ecuador. ROE

PART V

POC KET SLA NG

2.8%

PERU

3.2%

2014 2013

MEXICO

2015

74 POCKET SLANG

ECUADOR

41 .

%

INFLATION IN LATIN AMERICA Ecuador has managed to keep annual inflation at 4.1%. It is one of the region’s lowest rate and has stabilized the overall economy. Such an inflation scale reflects, on one hand significant stability, which in its turn has favored the peoples’ life conditions and the capacity of planning projects for the future.

COLOMBIA

4.4%

CHILE

4.4%

BRAZIL

8.9%

ARGENTINA

16.8%

VENEZUELA

159.1%

On the other hand, the country’s inflation levels in the last years are related to the Ecuadorian economy’s dynamics.

Fuente: WEO October 2015

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75 POCKET SLANG

327

USD710

USD

2013 PER CAPITA INVESTMENT IN EDUCATION

One of the main aspects that influence development in a country is the people’s education level. This long-term investment is not only reflected on life conditions, but also on the opportunities of competition and productivity. If we look at each country’s education budget, figures show that in 2013 Ecuador invested 326.61 dollars per person in education. Last year Chile showed the highest investment in education per capita, with 710.03 dollars.

CHILE

USD327

ECUADOR

USD276

COLOMBIA

USD245

VENEZUELA

USD191

ARGENTINA

USD188

MEXICO

USD80

BRAZIL

USD37

PERU

Source: Central Banks & Ministries of Finance.

678.

98%

PERU

327.

BRAZIL

431.

99%

COLOMBIA

91%

262.

52%

VENEZUELA

391.

27%

ARGENTINA

164.

62%

MEXICO

368.

54%

ECUADOR

155.

72%

368.

54%

MOBILE TELEPHONY SUBSCRIBER GROWTH (2004-2014)

Improved access to telecommunications reflects the progress in the last decade. In this regard, mobile telephony development has been one of the sectors with the broadest expansion. In this figure Ecuador shows an increase of 368.54% in the number of lines since 2004. This results both from the people’s higher purchase power and from investments made in this sector.

CHILE

Source United Nations for Information and Communication Technologies

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76 POCKET SLANG

E C U A D O R

789.

45%

MEXICO

INTERNET ACCESS GROWTH (2004-2014) In Ecuador connectivity to Internet has been expanded in such way that in 2014 an estimated 43% of the population used this tool, as compared to 4.83% in 2004. In the last decade this indicator has shown an increase of 789.45%. This growing level of connectivity improves the peopleâ&#x20AC;&#x2122;s life conditions and also allows developing economic activities and entrepreneurships in the country.

214.82

%

201.99

789.45

%

%

BRAZIL

ECUADOR

185. 11

578.21

%

%

VENEZUELA

PERU

476.51

303.45

%

COLOMBIA

%

156.76

%

ARGENTINA

CHILE

Source: United Nations for Information and Communication Technologies

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77 POCKET SLANG

0.881 0.785 0.779 0.761 0.740 0.738 0.734 0.725 0.699 0.698 0.691 0.686 0.683 0.679 0.670

1º ICELAND

11º GERMANY

8º SWITZERLAND

28º U.S.A

15º FRANCE

101ºJAPAN 93º URUGUAY 89º PERU 85º BRAZIL 78º VENEZUELA 73º CHILE 71º MEXICO 42º COLOMBIA 35º ARGENTINA 33º ECUADOR

GLOBAL GENDER GAP INDEX (2015) This index generated by the World Economic Forum shows the magnitude of gender disparities throughout the world; and is developed upon economic, political, and social aspects. The study includes 142 countries. The last results show scarce progress in the indicator’s 9 years of life, and still remains a challenge for humanity. Ecuador holds a good world ranking (33.) In the Andean Region, Peru and Colombia follow Ecuador in positions 42 and 89, respectively.

Source: World Economic Forum

4.6

2003 2013

5

%

INCOME SHARE HELD BY THE POPULATION’S LOWEST 20%

4 3 2 1 0

CHILE

ECUADOR

PERU

COLOMBIA

BRAZIL

Source: World Bank

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78 PHOTOGRAPH

THE ORGANIZATION OF AMERICAN STATES (OAS) RECOGNIZED ECUADOR AS THE HEMISPHEREâ&#x20AC;&#x2122;S LEADER IN IMPLEMENTING EFFICIENT INTEGRAL SECURITY POLICIES.

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79 PHOTOGRAPH

COLLAS ROUTE

One of the alternatives to connect the northern part of the city to the airport. The road has 1.7 km and allows arriving to that destination in 15 minutes. ROE

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