Boosting trade through extended outreach

24 December 2014
ITC News

Ecuador, like many countries in Latin America, has revisited the idea of development. It is forging its own path towards a more sustainable and inclusive society focused on a better quality of life for its citizens.

This is the vision of the National Plan of Ecuador 2013-2017, entitled ‘Good living – a better world for everyone’. The plan serves as the guiding framework for the Ministry of International Trade, which is headed by Francisco Rivadeneira.

According to Mr. Rivadeneira, ‘Good Living’ is the style of life that enables happiness and the permanence of cultural and environmental diversity. It is harmony, equality, equity and solidarity. It is not the quest for opulence or infinite economic growth.’ All national policies are focused in the direction of the National Plan, with international trade acting as an important mechanism to meet programme objectives.

Under Rivadeneira, the ministry has carried out reforms to strengthen the structure of the Institute for the Promotion of Exports and Investments of Ecuador (ProEcuador).This has led to a significant increase in the number of business offices outside the country, such as Peru, Turkey, Japan, Russia and Germany. This has allowed ProEcuador to enter new markets while consolidating traditional export activities and seek greater product differentiation through added value. ‘We currently have more than 30 sales offices in all major markets where we are currently exporting or where there is export potential,’ Mr. Rivadeneira says. Our goal is to promote the country – as well as its products and services – directly to buyers and intermediaries and especially to consumers.’ Prior to implementing the National Plan, a specific problem for Ecuador’s foreign trade involved the limited number of products exported and the number of markets where those exports were available.

REPORTOne solution was to deemphasize traditional markets such as Europe and North America and increase exports to markets including Central America, the Mercosur region, Asia, Canada and Africa. ‘In the Middle East we have been successful in developing a strong presence in the Gulf countries, particularly the United Arab Emirates and Qatar. We are also increasing exports to Chinese, Japanese and South Korean markets,’ Mr. Rivadeneira says.

Promoting ecuadorian services
An important next step in the strategy is to promote Ecuadorian services worldwide. As one of the largest global providers of high-quality agro products, Ecuador has historically dedicated considerable effort to promoting its primary products and raw materials. This has come at the expense of neglecting the promotion of services in which this country has extensive strength and expertise.

This is certainly the case in the software industry, wherein Ecuador is among world leaders. It is increasingly positioning itself in the region and elsewhere as a producer of high-quality software, particularly for the banking and financial sectors. Some 600 companies are engaged in software production, contributing to 3.5% of GDP.
‘It is important for us to work with governments and international agencies such as the International Trade Centre to help us implement good practices,’ Mr. Rivadeneira says. ‘It helps us develop an appropriate strategy to promote Ecuadorian services and boost the competitiveness of our small and medium-sized enterprises (SMEs) while in- creasing exports.’

Ecuador’s productive matrix changes, which go hand in hand with an intelligent relationship with international markets, are steering the economy away from exclusively focusing on primary products and raw materials and towards producing a wider variety of goods of real added value. For example, Ecuador is now producing fine chocolate, effectively positioning the Ecuador brand not only as a cacao exporter but as a key player in the production of high-quality chocolate. This shift is among the definable outcomes of the National Plan, which views women, farmers and other actors of the popular and solidary economy as influential factors in trade promotion. Ecuador continues to prioritize projects that take into account gender-related aspects. Many industries where the workforce is mostly composed of females, such as the floriculture sector, are being developed as a result.

According to Mr. Rivadeneira, these measures are aligned with ‘Good Living’ objectives, as enhancing the labour participation of women significantly increases the family budget. It also encourages women, farmers and actors to join the formal economy, and SMEs to open up to international trade. ‘These actors are organized through as- sociations and consortiums not to get divi- dends, but to generate surpluses that can be redistributed,’ Mr. Rivadeneira says. ‘This benefits all members who make up these groups.’ There is no doubt that SMEs have a great influence on economic activity across Latin America. They are playing a crucial role in the development of rural areas which have historically lacked the appropriate means to generate opportunities for local communities. Through the Good Living framework, SMEs are helping to transform the national economy.