Ecuador opens its strategic sectors to Spanish investment

RIO DE JANEIRO, BRAZIL – Ecuador has embarked on an international campaign to position itself as an investment destination. The new president, Guillermo Lasso, presented during his recent official visit to Spain the investment plan that the country has prepared for the next four years, valued at US$30 billion, with projects in all sectors.

Lasso pointed out that Ecuador needs private investment and is creating an attractive framework with three fundamental laws: fiscal sustainability, labor reform, and investment promotion.

The plan offers good opportunities for investment and concessions in infrastructure, mining, telecommunications, water treatment, potabilization or tourism, and in improving the agri-food industry’s productivity.

In addition, with the healthcare crisis, the healthcare sector and the digital economy are being boosted, according to the Official Spanish Chamber of Commerce and Industry of Quito.

Its president, Carmen Sánchez-Laulhé, highlighted in a recent meeting in the Ecuadorian capital that there are strategic sectors such as energy, mining, telecommunications, tourism, and health in which Spain has excellent knowledge and experience. “We have a lot to contribute to achieving objectives that translate into development for Ecuador,” he said.

The volume of Spanish sales reached €374.9 million (US$424.4 million) in 2020.

He also noted that to generate confidence and attract foreign investment, it is essential to work on tax and legal aspects that reinforce the country’s attractiveness and, especially, legal security.

DIRECT INVESTMENT

Although Ecuador registers very low figures for foreign direct investment (FDI), Spain has historically occupied the top positions. In 2020 it was the largest investor with 30.3% of the total, followed by Canada (26.6%) and the United Kingdom (11.1%).

According to the Central Bank of Ecuador, the country closed 2020 with an FDI of US$1 billion, which is 5.1% more than the previous year. The activity with the highest foreign investment has been mining, quarrying, and oil exploitation, which accounted for 40.4% in 2020, followed by business services (21.3%) and construction (16.7%).

Large Spanish companies are developing major projects. One example is the huge engineering work that has involved the Quito subway led by Acciona, which has cost more than US$2 billion.

But there are also smaller companies with a long history, such as Eductrade, founded in 1976 and present in Ecuador since 1999. Specializing in the integral development of social infrastructure plans, especially in health and education, the company highlights “the good management and commitment of the Ecuadorian institutions and entities, which facilitated our establishment and helped us lay the foundations for long-term collaboration”.

In terms of bilateral trade, frozen fish, ceramic flooring, and women’s clothing products occupy the top places in our exports ranking. Mollusks and crustaceans, canned fish and cut flowers (more than 80%), tropical fruits, and frozen fish concentrate Ecuador’s sales to Spain.

In 2020, Spanish exports reached US$424.4 million, and imports from Ecuador reached US$589.6 million.

THE FIGURES

US$985 million is the foreign direct investment achieved by the South American country in 2020, 5.1% more than the previous year.

30,3% is the share of Spain in the total direct investments made in the country in 2020. It was the leading investor, followed by Canada and the United Kingdom.

2,8% is the share of tourism in the national GDP. Tourism is a sector with great expectations for growth and investment.

OPPORTUNITIES

• Aquaculture: Ecuador is the second-largest shrimp exporter in the world. Marine concessions are available to produce species such as the Pacific oyster.
• Agribusiness: The country has a wide variety of climates, abundant water, very productive land, and 12 hours of sunlight 365 days a year, which allows for larger harvests. The primary agricultural sector is fundamental to the state’s economy. In 2020 it accounted for 8% of GDP.
• Mining: With an investment of US$560 million, it is the economic activity that attracted the most foreign capital in 2020, 48% of total FDI.
• Energy: Ecuador expects to attract around US$2.2 billion of private capital to invest in non-conventional renewable energies: photovoltaic, wind, geothermal, biomass, and others.
• Fishing: During the 2018-2020 period, the fisheries sector obtained more than US$1.3 billion annually in fish exports at all stages of processing.
• Tourism: Ecuador has great tourism potential, although still little exploited. It represents only 2.8% of GDP. It is a highly diverse country with an extension equivalent to half of the Spanish territory. It has Andean peaks, extensive beaches, the Amazon jungle, and the incomparable Galapagos Islands.