Policy coherence for development A case study of the impact of Spain-Ecuador economic relations on Ecuador’s development. Iliana Olivié Elcano Royal Institute Rhodes, 26 April 2007. Policy coherence for development : Spain-Ecuador.
A case study of the impact of Spain-Ecuador economic relations on Ecuador’s development
Elcano Royal Institute
Rhodes, 26 April 2007
Policy coherence for development: Spain-Ecuador
1.1. Why does policy coherence for development matter? Selected foreign economic indicators of developing countries
Source: World Bank, World Development Indicators, online database
2.2. Overview of trade and financial links
Thousands of euros
Sources: Banco de España, MITC (Datacomex and Datainvest), MAEC, OECD (OECD. Stat)
2.2. Trade flows
Main features of bilateral trade
Spain: marginal trade partner for Ecuador; Ecuador: marginal trade partner for Spain.
But recently increasing trade flows.
Traditionally positive balance for Ecuador (excluding 2001 and 2002) and strongly increasing since 2003.
Concentration of Ecuadorean exports: 93% in four products in 1997-2006, in food –fish (canned tuna, shrimps), fruits, vegetables, sugar, coffee and cocoa-.
Lower concentration of Spanish exports: 57% in five products in 1997-2006, of higher added value –industrial machinery, chemical products, transport, fishery products–.
Institutional framework for trade relations
EU Agreements: SGP drugs, SGP plus
2.3. Migrants’ remittances
Source: Spain, important country of origin for Ecuadorean remittances; Ecuador, leading destination of remittances from Spain.
Sending costs: more expensive informal channels.
Use of remittances in Ecuador: 61% first needs (C), 17% luxury goods (C), 4% real estate (I), 2% education (I), 8% businesses (I) and 8% S.
Some features of recipients:
Concentration: 14% of total population
Not the lowest-income population
High volume of remittances
-→ high per capita remittances
-→ scope for investment (instead of consumption)
Support from Spanish Administration
COFIDES: FONPYME y FIEX
2.5. External debt
Management of external debt limited to stock of official bilateral debt
- management of debt flows
- policy measures for multilateral debt stocks (HIPC-like initiatives)
January 2006: Debt for Development
50 million: 30 million hydroenergy projects, 20 million education projects
R.1. Comprehensive institutional framework for all economic relations.
R.2. Reforming CAP: preponderance of food in Ecuadorean exports to Europe.
R.3. Pushing further tariff reductions.
R.4. Respect for norms agreed in multilateral fora.
R.5. More and better information on sending and use of remittances.
R.6. Furher reducing sending costs: support of AECI to the formalization of microcredit institutions.
R.7. Support for Spanish FDI tied to development criteria: enhancing structural change and diversification, reducing concentration in extractive industries.
R.8. More effective debt relief through international initiatives: multilateral debt.
R.9. Reducing refundable aid: FAD loans.
R.10. No more FAD programmes.
R.11. General support for conditions of FDI impact on development: not only through support to Spanish FDI but also directly through development programmes and projects.