1. A 21st Century Country Paradigm
Hankuk University of Foreign Studies
Seoul, Korea
April 13, 2011
2. Ecuador, South America
Area 284,561 Km2
Population 14.7 million
Labor force 4.5 million
GDP (nominal) 2010 USD$64.119 billion (est.)
Economic Growth 3.6 %
2010
Per capita GDP US$4,928
(nominal)
Ecuador: Posición Geográfica Estratégica
• Panama canal
• 3,5 hours flight time to the USA.
• Direct flight and sea connections with Europe
• Closest port between Asia and South America
3. An ethical economy
An ethical management of our
economy is at the center of our
Hoja para
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country
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extenso
Our government has decided
othe rights of our society and the
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environment, through innovative, clear
regulations that encourage efficient
business operations, while ensuring
respect for nature, our workers and our
society as a whole.
4. the human
being is not
just another
factor in
production,
it is in itself
the reason
for
production
5. Necessary reform of the State
Actions Results
Constituent Assembly Modern institutional framework
Tax amendments Área cuadros
Fiscal stability
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Elimination of extreme
Fair labor relations
outsourcing
Incentives and a clear framework
Production Code
for investment
6. Development model and the role of the State
The Production Code sets out a new, modern legal
framework, encouraging private investment.
The code specifically highlights the Government's model
for economic development and transformation of our
production matrix
Monetary policy based on dollarization.
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General incentives for private investment to make our
country more competitive.
Plus additional Incentives in specific sector with high
potential to serve internal and external markets and to
shift in productive matrix from the export of primary
products to that of added value products. To consult list
of sectors go to www.mcpec.gob.ec
7. Protection for Private Investment
Legal Investment Safe
incentives Agreed
contracts investment
arbitration
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Production and Investment Code allows for the
protection of
private investment with all these instruments.
8. An intelligent investment
7 Strategic reasons
1. Mega-diverse country and
tourism Korea
2. Growing and stable
economy
3. Strategic location and
logistic axis Área cuadros
4. Human talent
5. Access to Andean
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and world’s markets..
6. Protection and Incentives
for the investor.
7. Dollarized economy.
9. ECUADOR: Why invest in Ecuador?
The most megadiverse compact
1 country of the world, rich and diverse
culture and unique tourist attractions
10. Hoja para
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extenso
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The eco-centre of the world: the most compact an mega diverse per m2
11. The eco-centre of the world : multiple peoples of different cultures live in peace
12.
13.
14.
15. The Constitution of Ecuador is the first one that recognizes
the nature’s rights (pacha mama: mother Earth)
20. Ecuador International Living´s Top 1 country to
Retire in 2010
In terms of cost of real state, special benefits, cost of living, culture,
health, infrastructure, safety/stability and weather.
Source: International Living magazine
23. NON OIL GDP GROWTH
Non-Petroleum GDP
Annual Growth Rate (%)
8.03
7.04
5.90
5.05
4.60
3.90 3.95
3.84
3.46
2.98
0.91
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Provisional data
Source: BCE
24. Public Investment Evolution/ Nominal GDP
8000 14.00%
12.59%
12.80% 12.09%
7000
12.00%
6000
10.00%
USD millions
5000
7.44% 8.00%
6.96% 6.81%
4000
6.00%
4.99%
3000
4.00%
2000
2.00%
1000
0 0.00%
1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Estimated data as of 2010
Source: BCE
Formación bruta de capital fijo
Gross fixed capital formation Othersde capital
Otros from capital Capital expenses of SPNF/GDP
Gastos de Capital del SPNF/ PIB (Eje Derecho)
25. Dynamism of Investment: FBKF/Nominal GDP
16,000,000 30.00%
14,000,000
24.22%
25.00%
12,000,000 21.51%
18.72% 20.00%
10,000,000
16.73%
8,000,000 15.00%
6,000,000
10.00%
4,000,000
5.00%
2,000,000
Data in US milions
0 0.00%
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Gross fixed capitalcapital fijo
Formación bruta de formation Capital expenses of SPNF/GDP
Gastos de Capital del SPNF/ PIB (Eje Derecho)
Non-financial public sector
26. Solvency: Debt/GDP
Since 2002, the ratio between public debt to GDP has been decreasing,
placing the DEBT/GDP ratio as favourable compared to the levels of
other countries in the region.
PERCENTAGE RATIO DEBT/GDP 2007-
Ecuador-Public Debt/PIB 2009
30%
65%
25% 4%
23%
20%
23%
19% 15% 34%
25%
27% 61%
14% 11%
19% 17% 11%
8% 22%
7% 7% 5% 8%
6% 10%
3%
2007 2008 2009 2010 ECUADOR PERU COLOMBIA BRASIL CHILE
Deuda Pública Interna / PIB
Internal Public Debt/GDP Deuda Pública Externa/PIB
External Public Debt/GDP
Deuda Pública Interna
Internal Public Debt Deuda Pública Externa
External Public Debt
Source: Central Banks of each country
Source: BCE
27. Manufacturing: Annual growth per quarter
(Excludes petroleum refinement)
Manufacturing: Annual growth per quarter
(Excludes petroleum refinement)
10.0% 8.8% 8.8% 8.5% 8.0%
8.0% 6.4% 7.0%
6.0%
4.0% 3.1%
2.0% 0.67%
0.0%
-2.0% -1.3%
-4.0% -2.9% -2.5%
I II III IV I II III IV I II III
2008 2009 2010
8,0% growth in the first, second, and third quarters of 2010 compared with
2009.
Source: BCE
28. Manufacturing: Annual growth per quarter
(Excludes petroleum refinement)
Commerce: Annual growth per quarter
(Excludes petroleum refinement)
10.0% 8.5% 8.9% 8.7% 8.8%
8.0%
5.5%
6.0% 4.6%
4.0%
3.5%
2.0%
0.0%
-2.0% -0.6% -0.58%
-4.0%
-3.8% -4.3%
-6.0%
I II III IV I II III IV I II III
2008 2009 2010
8,8% growth in the first, second, and third quarters of 2010 compared with
2009.
Source: BCE
29. Export: sustained 10% growth rates since 2000
Non Oil Exports Index
(2000=100)
350
300
250
200
150
100
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
30. Dynamic private consumer activity
Ecuador has a vigorous economy, backed by an increase in disposable
income and by credit growth.
CFH Average/PIB 2007-2009
65.0% 64.2%
63.8% 63.6%
64.0%
63.0%
62.0%
61.0% 60.2%
60.0%
59.0%
57.9%
58.0%
57.0%
56.0%
55.0%
54.0%
ECUADOR PERU COLOMBIA BRASIL CHILE
Source: Central Banks of each country
32. Less leveraged economy: Businesses, households,
Government, IFI’s
Ecuador offers a solid and solvent economy with low levels of public and private
debt. Foreign investment should complement domestic investment, thus
reverting the substitution (crowding out) process.
Evolution DEP/GDP-Credit/GDP
35% 30% 31%
30% 27% 28%
26%
23% 24% 25%
25% 21% 20% 21%
20%
15% 20% 19% 19%
17% 17%
14% 14% 15%
10% 13% 12%
5% 9%
0%
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Deuda Externa Privada / PIB
External Private Debt/GDP Crédito/PIB
Credit /GDP
Source: Superintendence of Banks
33. A healthy financial system
The Ecuadorean financial system is a healthy one with robust growth in capital
formation and credit allocation.
Growth in obligations with the public
Growth in obligations with the public
and financial system loan portfolio
and financial system loan portfolio
Year 2007= 100
Year 2000= 100 180
600
562 160 155
500 479 150
140
400
300 120
200 100 100
100 80
-
60
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
2007 2008 2009 2010
OBLIGACIONES CON EL PUBLICO
OBLIGATIONS WITH THE PUBLIC CARTERA
LOAN PROTFOLIO
OBLIGACIONES CON EL PUBLIC
OBLIGATIONS WITH THE PUBLICO CARTERA
LOAN PROTFOLIO
Source: Superintendent of Banks
34. Big opportunities for ethical and responsible investment.
Indicator- average
2005-2009 COLOMBIA INDONESIA VIETNAM TURQUIA SUDAFRICA ECUADOR
Inflation, consumer prices
(annual %) 5,22 9,27 10,83 9,20 6,76 4,26
GDP growth (annual %) 4,37 5,62 7,35 3,20 3,65 4,0
Per capita GDP (US$ at current
prices) 4.465,57 1.892,96 823,83 8.222,40 5.617,50 3.540,03
Accumulated External debt (%
GDI) * 23,6% 30,2% 32,3% 41,2% 15,1% 23,3%
Commercial Credit balance of
goods and services (% of GDP) (2,45) 3,49 (10,03) (4,07) (1,94) 1,93
Fixed creation of gross capital (%
of GDP) 20,90 26,29 34,73 20,40 20,07 22,99
* Relation between total volume of foreign debt and GNI (information from countries as of 2009)
Source: World Bank
36. ECUADOR
Airport Development Area
Surface : 70 Has.
ECUADOR IS A STRATEGIC LOCATION FOR ASIAN AND MIDDLE EAST
INVESTORS:
37. Infrastructure
Ecuador: Public Investment, by sector 2007-2010
USD$
1,400,000,000
1.398.MM
1,200,000,000
1.103 MM
1,000,000,000
800,000,000
600,000,000 512 MM
400,000,000 354 MM
200,000,000
-
2007 2008 2009 2010
agricultural
Agropecuario Rec. Nat. (Electr)
Nat. Res (energy) Comunicaciones Educación
Education
Road
infrastructure
infraestructure
38. Connectivity in Ecuador
Ground transport
infrastructure
National Airport
International Airport
Fuente: MINTUR (Plan de Marketing Internacional)
Ship piers (in study)
Source: Ecuador´s Ministry of Tourism
45. Access to Regional and Global Markets
• Agreement with Mercosur
Provides Ecuador with the potential to export
approximately 4.000 products with no tariffs to
Brazil and Argentina.
• GSP PLUS – European Union
Provides Ecuador with the potential to export
approximately 7.800 products with no tariffs.
47. General Incentives for investments
Reduction from 25% to 22% on the Income Tax (IT)rate:
1% each year from the date the Code will be in force
Exemption from the minimum Income Tax calculation for
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incremental expenses new employment or salary
increases, acquisition of new assets for productivity and
technology improvements and cleaner production.
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For new companies: exemption from the minimum tax
payment for the first 5 years.
Exemption from Currency Outflow Tax (ISD)for payments
sent overseas to pay foreign loans, with a term of over
one year and at a rate not higher than that authorized by
the Ecuadorean Central Bank (BCE).
48. General Incentives for investments
Additional deductions in the
calculation of income tax as
mechanisms to encourage
improvements in productivity,
innovation and eco-efficient
production.
Benefits for the opening-up of
capital, such as the deferment of
Income Tax for companies that
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offer investment options to
external parties. o información
Those established for special
development zones, providing they
meet the qualifying criteria.
49. Incentives for New Investment In Priority Sectors
Total exemption from income tax and advance payment thereof, for 5 years,
for new investments made in priority sectors of the economy.
Fresh and Petrochemical Área cuadros
Metalworking Forestry and
Tourism sector
processed sector sector agroforestry chain,
foodstuff
sector
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manufactured
products sectors
Biotechnology and Logistics
Renewable
Pharmaceutical applied software services
Energy
sector sector sector
sector
+ STRATEGIC SECTORS FOR EXPORT PROMOTION AND IMPORT SUSTITUTION
50. Incentives for green production
For Income Tax calculation purposes,
there will be an additional deduction of
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100% from the expense of purchasing
machinery and equipment for cleaner
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production, and for the implementation
of renewable energy systems (solar,
Aeolic, or similar), or for the mitigation
of environmental impact.
51. Incentives for Investment in Economically Depressed
Areas
Companies making investments in economically
depressed areas may take advantage, for the first 5
years, of the additional 100% deduction on expenditure
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for new jobs created in the area,..
A “depressed area” will be o información
defined by indicators, such
as lower human, economic, and social development.
52. Incentives for ZEDE
(Special Economic Development Zones)
A further reduction of 5 percentage points on Corporate Income
Tax, for managers and operators of ZEDE (in Spanish), on a permanent
basis (17% TOTAL). If said managers and operators are in a
Preferential Sector and it is a new investment, 0% income tax applies
for 5 years.
Área have a 0% VAT rate.
The import of goods will
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Foreign goods, while they remain in said territory, will not be subject
to the payment of tariffs.
Managers and operators will have tax credit on the VAT paid on their
local purchases of services, supplies and raw materials for their
production processes.
Exemption from the Currency Outflow Tax (ISD in Spanish) for
payments of imports and payments sent overseas to pay off foreign
financing.
53. Incentives for private companies
that open their capital structure
Companies choosing to open up their capital structure
and sell shares to their workers, will have the
following benefits:
Área cuadros
oAnticipated payments.
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1. Deferment of 5 years on Income Tax and IT
2. Interest exemption on loans for financing the
shares purchase.
54. Infrastructure´s
investment
opportunities
Espacio para texto y título Espacio para texto y título
56. ECUADOR
Airport Development Area
Surface : 70 Has.
MANTA iNTER-CONTINENTAL LOGISTIC PLATFORM: MULTI MODAL
OPERATION: PORT, AIRPOT, FLUVIAL, TRANSPORT
57. Seaport development of Manta: Gateway and
transhipment port
• Natural depth of 12
mt.
• Container and
general cargo transit
• Half a million
containers per year
potential
• Entryway to the
two-ocean axis,
Pacific-Atlantic
• Entry to cruise liners
58. Manta’s intercontinental and
multi-mode logistics platform
Short and mid-distance air/maritime
(cabotage) /land transportation
Long distance air and
maritime transportation to
Asia
Short and mid-distance air/land
and river transportation to
Manaos, Brazil
Logistics platform binds
logistics infrastructures in
the same geographical spot:
Deep water port
International airport
ZEDE (Special Economic
Development Zone)
Short and mid-distance air, maritime
(cabotage) , land transportation to
Peru
59. Manta: an efficient cargo and passenger
connexion with Asia
Beijing
Seoul
Shanghai
Hong Kong
Manta
Tahiti
60. Continent: American – South America
Country: Ecuador
Bogotá
Province: 500 NM
Manabí
Panamá
Geographic 600 NM
0°57’ Latitude South
México
Location: 1600 NM
Guayaquil: 190 kms 43’ Longitude West
80°
Lima 700 NM
Quito:
Climate: 400 kms
Tropical dry
Chile 2000 NM
Cuenca : (average): 446 kms s. n. m
AltitudeAires 6 m.
It’s the closest687 kms with Colombia western
Buenos
North border:
point to Asia from the
2376 NM
Sao Paolo South America. m.
Rain:
coast of 2406 m.
210 NM
South border : 466 kms with Perú
Average Temperature: 26° C in winter
7 days, 24 hours air operation MANTA
24° C in summer
It’s 25 miles from the international traffic
route.
It’s 56 miles from the Equator.
It’s 24 hours from the Panama Canal.
No visa required.
MANTA
61. 100 METERS OF FISHING BERTH
TERM: 1 YEAR
10 acres OF STORAGE
225 METERS OF INTERNATIONAL BERTH YARDS
TERM: 1 YEAR TERM: 1 YEAR
EXTENSION Operational Capacity :
110 METERS OF INTERNATIONAL BERTH 2 200 mil TEUS/año
TERM: 1 YEAR
4 acres OF STORAGE
EXTENSION YARDS
110 METERS OF INTERNATIONAL BERTH 2 TERM: 1 YEAR
TERM: 1 YEAR Operational Capacity :
Área cuadros 50.000 TEUS/year
DREDGING
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310 METERS OF CONTAINER BERTH
TERM: 1.5 YEARS
TERM :1 YEAR
LEVEL: -14 M. LEVEL: – 14 M .
550 METERS OF BREAKWATER
TERM: 1 YEAR
DEVELOPMENT STAGE 1: 2011 – 2013
Total estimated investment (infrastructure and
equipment): 162 MILLION DOLLARS
62. PORT – AIRPORT INTEGRATED SYSTEM
There is a fast way connecting the Port with the Airport in 6 minutes,
making it a great comparative advantage with the region.
PORT
8 km AIRPORT
PORT – AIRPORT CONNECTION
64. MANTA: AIRPORT ADVANTAGES
Airport at sea level;
Easy instrumental procedures, obstacle free;
Alternative Airports at less than 25 minutes
(SALINAS and GUAYAQUIL);
Airport with quality services and standard
operations for customers according to airline;
Shortest distance to Asia
Manta- Tahiti- Asia Route in process
Pilot training school for Latin America
68. Ecuador tourist routes
Source: Ecuador´s Ministry of Transportation and Public Infrastructure.
Source: Tourism Marketing Plan of Ecuador. Ministry of Tourism
69. A Paradigm for
the 21st Century
Thank Thank
You!!! You!!!
Embassy of Ecuador in the Republic of Korea
EcuadorKoreaEmbassy@gmail.com
