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The Export Sector in Ecuador Historic Evolution and Perspectives

The Export Sector in Ecuador Historic Evolution and Perspectives. Juan Pablo Cuesta. General Background. Pop. (2010): 14,306,876 GDP Per Capita (PPP): 2720 (1980). 8,027 (2010). HDI: 0.591 (1980). 0.718 (2012). Poverty Rates (2010) At $1.25 a day (PPP): 4.6%

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The Export Sector in Ecuador Historic Evolution and Perspectives

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  1. The Export Sector in EcuadorHistoric Evolution and Perspectives Juan Pablo Cuesta

  2. General Background • Pop. (2010): 14,306,876 • GDP Per Capita (PPP): 2720 (1980). 8,027 (2010). • HDI: 0.591 (1980). 0.718 (2012). • Poverty Rates (2010) • At $1.25 a day (PPP): 4.6% • At national poverty line: 32.8% • Dollarized economy since 2000.

  3. Export Structure • Exports by group of products (average 2001 – 2010): • Primary products  76% • Manufactured  24% • Exports by destination country • United States  35% • European Union  13% • Panama  12 % • Peru  8% • Venezuela  6% Source: World Trade Organization Source: Central Bank of Ecuador

  4. Oil Dependency Source: US Energy Information Administration Source: Central Bank of Ecuador

  5. Oil Dependency • Dutch Disease? • Increase in exploitation of natural resources and decline in the manufacturing sector. • IMF Working Paper by Kareem Ismail Apr-2010: • Permanent increases in oil price negatively impact output in manufacturing. • Oil windfall shocks have a stronger impact on manufacturing sectors in countries with more open capital markets to foreign investment.

  6. Trade Agreements • ComunidadAndina de Naciones (CAN) • UNASUR (associate member) • Andean Trade Promotion and Drug Eradication Act (ATPDEA) - Expired Feb-2011

  7. Perspectives • Oil production to be maintained in the short term but decline over the years if new oil fields are not discovered or exploited (Yasuni ITT). • No clear policies towards fostering the non-oil exports, especially the manufacturing export sector. • Government has adopted an anti “Free Trade Agreements” stand against developed countries. • Need to maintain and strengthen exports to preserve dollarization.

  8. Recommendations • Reduce dependency on oil. • Incentive agro-industry, services (tourism), non-traditional manufacturing • Training, capacity building, credit. • Diversify trade partners but do not neglect the current. • Seek trade agreements. • Bring exporting industry in, not lead them out.

  9. References • World Bank, World Development Indicators. Website: http://data.worldbank.org/indicator. Accessed on Apr-24-2012. • World Trade Organization, Trade Profiles 2011. Website: http://www.wto.org/english/res_e/booksp_e/anrep_e/trade_profiles11_e.pdf. Accessed on Apr-24-2012. • Banco Central del Ecuador. Website: http://www.bce.fin.ec/frame.php?CNT=ARB0000841. Accessed on Apr-24-2012. • US Energy Information Administration. Website: http://www.eia.gov/cfapps/ipdbproject/IEDIndex3.cfm?tid=5&pid=53&aid=1. Apr-24-2012. • IMF Working Paper: “The Structural Manifestation of the `Dutch Disease’: The Case of Oil Exporting Countries. Website: http://dev.revenuewatch.org/revenuewatch2/sites/default/files/Dutch%20Disease%20(IMF)%20Newest%20Version.pdf. Accessed on Apr-24-2012.

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