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ECUADOR REPUBLIC OF OPPORTUNITIES October 12th of 2015 Ecuador Country Profile Name: Republic of Ecuador Government type: Democracy Capital: Quito Business Languages: Spanish (official) & English Area: 257,217 Sq Km Time zone: GMT -5 hours and GMT – 6 hours Currency: US Dollar Population: 15.8MM approx.(14.5MM census 2010) Nominal GDP: USD 100,917.4 MM (current 2014) Naturally-formed regions comprising two time-zones The country’s name symbolizes its location A largely diverse country: multi-ethnical and multi-cultural: 14 languages among 8 ethnic groups Economic and Social Indicators Ecuador has achieved STRONG GROWTH in the COMPETITIVE SOCIAL-POLITIC ECONOMIC last decade, preparing for its future development GDP GROWTH INVESTMENT Annual average 4,6% from 2007 to 2014, among the highest in the region High level of investment with low public debt POLITICAL STABILITY SOCIAL DEVELOPMENT Re-elected President with the public approval of 72% Improvement in HDI and wealth concentration INFRASTRUCTURE LOGISTICS Development of communication, energy and road infrastructure Roads, airports and ports development, ideal location for commerce *Source: ECLAC Macroeconomic benchmark of Ecuador Rate of Inflation 2014 3.7% *Source: BCE 3.9% 4.2% 5.1% 5.2% 8.3% 68.5% Ecuador: significant advances in poverty reduction REDUCTION OF EXTREME POVERTY 16.45% 7.36% 2007 June 2015 *Source: INEC Ecuador: one of the most dynamic economies in an evergrowing Latin America GDP Growth Rate 2007 - 2014 (by percentage) 7.8 5.5 6.4 5.9 4 3.5 2.2 4.4 5.1 4.5 3.1 3.8 2.6 1.3 0.6 2007 2008 Ecuador 2009 -1.6 Latin America 2010 2011 2012 2013 Average Growth 2007-2014 Latin America: 3.2 % Ecuador: 4.3 % Source: Ecuadorian central Bank, ECLAC * Projected 2014 2014* Ecuador reduced income inequality REDUCTION OF INCOME INEQUALITY Gini coefficient 0.551 2007 *Source: INEC 0.458 1st place in Latin America June 2015 Ecuador invests in education and human talent 2.12% of GDP in public spending for higher education, the highest in the region EVOLUTION OF PUBLIC EXPENDITURE ON HIGHER EDUCATION AS % OF GDP 10,482 Scholarships granted for Ecuadorians to study in world renowned universities between 2007 - 2014 Public Expenditure % GDP *Sources: SENECYT and Coordinating Ministry of Knowledge and Human Talent Ecuador: A Latin American leader in competitiveness Global Competitiveness Index 103 2007-2008 32 positions in the last 7 years Source: World Economic Forum 76 2015-2016 While Latin America itself has made significant advances in its competitiveness, Ecuador has experienced the highest improvement in the region *Source: World Economic Forum National indicators 17 airports renewed and operated at the national level 8 new hydroelectric plants by 2016 With a public-private investment of more than USD 4.5 billion *Source: MCPEC 86% 9,000 km of new highways With a public investment of more than USD 8 billion 6 multi-purpose projects of irrigation control and floods With a public investment of more than USD 800 millions Costs of essential services for industries 8₡ 29₡ kilowatt per hour One of the lowest energy costs in the region Per liter of diesel One of the lowest cost in the region 1.5$ Per cubic meter One of the lowest costs of water in the region *Source: OLADE- Year 2014 *Source: World Bank – Year 2014 *Source: Metropolitan Water and Sanitation Company of Quito – Year 2014 The state has invested in infrastructure: Ports, airports, telecommunications, highways and power generation projects 37,418 km 9,200 km of fiber optic cable of roads and highways Annual growth rate is 32.8% More than USD 7.600 millions invested *Source: MINTEL * Source : MICSE * Source : MICSE Power generation projects By 2016 Ecuador will have 8,300 MW installed STRENGHTENING THE PRODUCTIVE CHAIN Vision for 2025 AGRO INDUSTRIES BASICS INDUSTRIES INTERMEDIATE INDUSTRIES PRODUCTIVE SERVICES TOURISTIC INDUSTRY Signed investment contracts 44 investment contracts signed, for a total of USD 4.565 millions Main sectors from Turkey with potential to invest in Ecuador • FRESH AND FROZEN FOODS • METALWORKING • LOGISTIC • TOURISM • PETROCHEMISTRY • AGROINDUSTRIAL Public - Private Partnership LAW PROJECT Scope of application • Extends the possibility for the private sector to finance public projects. • Private initiatives can refer to any project: projects in strategic sectors (energy, telecommunications, transport, etc.), public services (hospitals, schools, etc.) or any other services. Objectives Attract domestic and foreign investment for the implementation of priority public projects. Promote external competitive financing companies, banks and other financial instituions, without discriminating tax havens Facilitate internal financing through the stock market Incentives to investors Stability on tax regime. Project to be exempt from income tax for 10 years. Payments of dividends exempt from currency outflow tax VAT compensation for cost reduction. Exemption from customs tariff and other taxes, such as the transfer of ownership. Ecuador is currently searching for foreign partners to actively participate in the development of its basic industries TRIPARTITE MODEL FOR PARTNERSHIP Foreign partners/investors will benefit from the involvement of the Ecuadorian Government and other local players FOREIGN PRIVATE COMPANY ECUADORIAN GOVERNMENT LOCAL PRIVATE COMPANY • Provides know how, technology and best practices • Guarantees legal framework stability • Possible joint venture • Brings experience for new commercial agreements • Develops adequate policies and infrastructure • Attraction of foreign investment • Invests when necessary • Facilitate relations with the local market The management model is negotiable and may vary depending stakeholders participation. • Invest when necessary Bilateral Trade Turkey - Ecuador TOTAL TRADE BALANCE ECUADOR – TURKEY (USD Thousands FOB) 250,000 Miles USD 200,000 150,000 100,000 50,000 (50,000) Exports Imports Trade Balance 2010 2011 2012 2013 2014 22,732 24,443 (1,711) 78,814 51,690 27,124 104,277 54,320 49,956 225,111 82,981 142,130 192,721 89,097 103,624 2015 Jan-Jul 136,469 21,635 114,834 NON-OIL TRADE BALANCE ECUADOR – TURKEY (USD Thousands FOB) 250,000 Miles USD 200,000 150,000 100,000 50,000 Exports Imports Trade Balance 2011 2012 2013 2014 78,814 104,277 225,111 192,721 2015 Jan-Jul 136,469 50,928 27,886 53,536 50,741 82,887 142,225 89,014 103,707 21,635 114,834 ECUADOR’S EXPORT PORTFOLIO Tourism Wood Software Metalworking Logistics Services Flowers Tropical fruits Vehicles and Autoparts Mango Farmaceutical Banana Fresh and Processed food Plastic Textiles Cocoa and Chocolate Handicraft Sea Food Coffee MAIN PRODUCTS IMPORTED FROM TURKEY TO ECUADOR (USD Thousands FOB) Jan – Jul 2015 8418.50.00.90 OTHER FURNITURE FOR CONSERVATION AND… 15% 1,732 5501.30.10.00 CABLES ACRYLIC OR MODACRYLICS OBTAINED BY… 0% 1,639 7228.70.00.00 RODS OF OTHER ALLOY STEEL 1,631 1,383 8701.90.00.00 OTHER TRACTORS NOT INCLUDED IN OTHER PARTS 9402.90.10.00 OPERATING TABLES AND PARTS 15% 890 8437.80.11.00 MACHINERY FOR GRINDING GRAIN 0% 566 8451.80.00.00 OTHER MACHINERY FOR WASHING, CLEANING,… 0% 497 2818.30.00.00 ALUMINUM HYDROXIDE 441 2836.50.00.00 CALCIUM CARBONATE 429 8437.10.90.00 OTHER MACHINES FOR CLEANING; SORTING OR… 419 0 600 0% 0% 0% 5% 1,200 1,800 0% MAIL PRODUCTS EXPORTED FROM ECUADOR TO TURKEY (USD Thousands FOB) Jan – Jul 2015 0803.90.11.00 FRESH BANANAS TYPE "CAVENDISH VALERY" 133,726 145.8% 4407.22.00.00 WOOD SAWN OR ROUGHLY SHAPED OF VIROLA,… 0% 846 9606.30.10.00 TAGUA BUTTONS 752 2101.11.00.00 EXTRACTS, ESSENCES AND CONCENTRATES OF COFFEE 353 8516.60.20.29 OTHER ELECTRIC RANGES INDUCTION 205 1504.20.10.00 ROUGH FISH OIL 186 0% 9% 0% 15.6% 58.5% 2007.99.92.00 OTHER PUREES AND PASTES OF OTHER FRUITS115 AND… 46.8% 0603.11.00.00 FRESH CUT ROSES 102 0% 0303.42.00.00 YELLOW FIN TUNA FROZEN 76 41 9619.00.10.10 DIAPERS OF PAPER PULP, WADDING OR WEBS 0% 0 50,000 100,000 150,000 THANK YOU Diego Aulestia Minister of International Trade of Ecuador [email protected] Juan Francisco Navas International Trade Officer Turkey [email protected]