Ecuador puts all its investment expectations in “Open for Business 2021”

RIO DE JANEIRO, BRAZIL – Ecuador puts all its hopes on the “Open for Business 2021” forum, the first of international scope organized by the government of President Guillermo Lasso and in which some 700 businessmen will participate in person and virtually more than 1,500.

The event, which will be held for two days in Quito, will be inaugurated by the Ecuadorian president as a sign of the importance that the new government attaches to the opening of the Andean country to the world and to foreign investments.

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“There are great expectations at international and local level,” Julio Prado, Minister of Production and Foreign Trade, told Efe, assuring that delegations from England, Spain, Mexico, Peru, Colombia and Japan, among others, will arrive in the country.

In total, some 450 foreign businessmen will take part in this business round, and the rest, up to 700, will be either local businessmen or public officials.

“We do not expect to close the entire 30 billion process, but we are going to make available to these investors a catalog of 46 public-private projects that will take shape over the next three and a half years,” said Prado. For this year, he does expect the signing of “a couple of mining projects” and “a couple of hydroelectric projects”.

The idea of convening an international forum of this scope originates in Lasso’s strategy formulated as “More Ecuador in the world and more world in Ecuador”, after years in which he had isolated himself from international trade agreements and investments were slowed down by unexpected changes in legislation.

His predecessor, Lenín Moreno (2017-2021), had already begun to open the country with the signing of some trade agreements and readjustments of legislation, a strategy that the center-right Lasso has taken up again with more impetus.

Prado believes in that sense that the conditions are in place for his country, which will close the year with about 2 billion in investments, twice as much as in 2019 and four times more than in 2020, to be in the international spotlight.

And he highlights “the discourse and actions of this Government around creating investments and stability at the macro level” as catalysts of that international interest, after “decades” in which Ecuador “has not been the country with the greatest stability and openness”.

Also that of certain changes in the regional context, with some countries “looking towards the model that Ecuador had before (..) “less open to investments and, in some cases, even expelling capital”.

Ecuador hit an economic slowdown in 2019 and is mired in a severe liquidity crisis, problems that were aggravated by the Covid-19 pandemic, with a 7.8% drop in GDP in 2020.

This year’s growth is expected to be around 3.0% and there are still discrepancies between studies about the coming year, but in any case this is a pace that Lasso wants to accelerate in order to recover lost ground.

For this reason, he is placing all his hopes on the forum that will be inaugurated tomorrow, with an offer of projects in the field of oil, mining, infrastructure, telecommunications, energy and even social inclusion.

Projects that will seek a sponsor in what is the largest forum in the last fifteen years to be held in the country, according to the minister, and under a formula of “sustainable development” from the social and environmental point of view.

The Ministry of Production and Foreign Trade, as well as the President himself, have promoted the event in similar forums in Mexico and Peru, and have had presentation contacts in Glasgow, New York, Madrid, and Miami.

As an example of its determination to attract investors, Ecuador returned last June to the International Arbitration Center (ICSID), and has initiated a legislative project to encourage investments through guarantees and legal assurances, which will reach the National Assembly in the first quarter of 2022.

In the meantime, as a symbol of the urgency it attaches to investment, it has included in the tax reform bill to be voted in the Assembly in the next two weeks, two reductions of 3% and 5% for new companies and entrepreneurs.