Ecuador

Private Banks reject the use of electronic currency in Ecuador

Ecuador’s Association of Private Banks (Asobanca) presented a constitutional action to protect themselves against the resolution imposed by the Market Control Superintendence (SPM), with regards to electronic currency (El Universo, 20 December 2016). On 14 December 2016, the Market Control Superintendence (SPM) issued a resolution that within 30 days, fourteen private banks cannot reject the use electronic currency, and must be willing to open bank accounts with this new currency, if a customer desires. Through a press release, Asobanca explained this precautionary measure is to preserve constitutional rights to freedom of speech, due process, and judiciary rights (El Comercio).

Private-Public sector alliance to drive real estate in Ecuador

Through a public-private sector alliance, around US$500 million will be invested in Ecuador's real estate sector (El Universo, 16 December 2016). During 2017,  three public tender processes will be held for the construction of housing units. Housing Public Company (EPV) Manager Monserrat Benedito estimated close to US$450 million will come from the private sector, while US$50 will be from the public sector in the form of land. The goal is to build a total of 12,000 homes in Guayaquil, Quito, Ambato, Ibarra, Quevedo, Santo Domingo, Santa Elena, and Manabi.

Mining camp attacked in Ecuador's Amazon region

The Ecuadoran government called the armed forces and police units into action after an incident occurred on 15 December, when an illegal armed group unexpectedly attacked a mining camp located on the Amazon region, which is currently being explored by Chinese company ExplorCobres (El Universo, 16 December 2016). The attack left a policeman dead and several wounded. Chinese International Relations Ministry Spokesman Geng Shuang commented that the incident is being monitored, and China is willing to work with Ecuador to take necessary measures to create a good environment for bilateral cooperation (El Diario). 

Ecuador's Constitutional Court rules in favor of commercial trade agreement with EU

Ecuador’s Constitutional Court issued a verdict and ruled in favor of the commercial trade agreement signed with the European Union, arguing the trade agreement does not violate the rights established by the Constitution. (Andes, 12 December 2016). After the favorable ruling by the Constitutional Court, it is expected that the Executive will send the trade agreement documentation to the National Assembly for ratification. Foreign Trade Minister Juan Carlos Cassinelli said the European Parliament is scheduled to vote on the ratification of the trade agreement on 13 December (El Comercio).

Ecuador registers a -0.15 percent inflation rate for November 2016

The National Institute of Statistics and Census (INEC) reported Ecuador registered a -0.15 percent inflation rate for November 2016 (El Universo, 6 December 2016). This is the fourth month since July 2016 that Ecuador has registered negative inflation, as July (-0.09 percent), August (-0.16 percent), and October (-0.08 percent) also presented negative values in the price index. The cumulative inflation from January to November 2016 reached 0.96 percent, while annual inflation from November 2015 to November 2016 reached 1.05 percent. Cuenca, with -0.36 percent, is the city with the lowest levels of inflation, followed by Guayaquil with -0.32 percent (Ecuavisa).

Correa sends Capital Gain Law to National Assembly for approval

President Rafael Correa sent the Capital Gain Law, a law to avoid speculation over the value of land, and tax fixation, to the National Assembly for approval (El Telegrafo, 1 December 2016). The proposed law intends to tax the extraordinary gain in the transferring of property, which will be determined in general terms by the difference between the transferring value and the value of the acquisition. President Correa argued that historically, a small fraction of society has obtained extraordinary capital gain illegitimately stemming from the speculation in property ownership. Guayaquil's Mayor and opposition party leader Jaime Nebot (Partido Social Cristiano, PSC) believes this law has communist roots and is homage to the recently deceased Fidel Castro (El Universo).

Ecuador in favor of oil production reduction

In the next OPEC meeting on 30 November 2016 in Vienna, Austria, Ecuador will support and advocate for mechanisms that lower and freeze oil production to stabilize the declining prices (El Universo, 25 November 2017). Ecuador’s Hydrocarbons Minister Jose Icaza Romero revealed there are internal discussions between OPEC members to reduce production between 4 to 4.5 percent. Icaza explained Ecuador’s concept is to reasonably reduce production, and eventually freeze it. He added Ecuadorian technicians are presently in Vienna, looking to find consensus between OPEC nation members (America Economia). 

CNE will invite international delegates to monitor Ecuador's general elections

The National Electoral Council (CNE) approved a plan to monitor the 2017 general elections, where international and national delegates will participate (El Telegrafo, 22 November 2016). The CNE confirmed international delegates from the Union of South American Nations (UNASUR), the Organization of American States (OEA), and the Inter-American Union of Electoral Bodies (UNIORE) will be present at the general elections held on 19 February 2017, which includes the Presidential Election (El Tiempo). CNE President Juan Pablo Pozo stated the decision to invite international organizations was to clear up any speculations regarding the legitimacy of this election, and to prove the elections will be won with nothing but the popular vote (El Comercio).

Ecuador's Productivity & Industry Minister meets with prominent American companies

In a meeting with twelve companies (members of the U.S. Chamber of Commerce), the Productivity and Industries Minister Santiago Leon presented his platform to increase productivity in Ecuador (Ecuador Inmediato, 17 November 2016). Leon stated Ecuador has generated a favorable environment to create opportunities, such as establishing political and judicial stability, creating jobs, improving human talent, and social benefits. Leon revealed the plan is to continue to develop a public-private alliance, this due to the concern and uncertainty from foreign investors. U.S. Ambassador to Ecuador Todd Chapman was present at the meeting, described it as positive, and hopes that investment opportunities in Ecuador can crystalize in 2017 (El Telegrafo). 

Ecuador’s debt with China is at least US$ 8.65 billion

It is estimated Ecuador’s debt to China has risen to at least US$8.6 billion, which represents Ecuador’s largest overall debt to any country (El Universo, 11 November 2016). The debt is composed of cash advances from China in exchange for future petroleum sales and Chinese funds to Ecuador during the past 10 years. Since Ecuadorean President Rafael Correa took office, the debt with China has multiplied by over 1,000 percent. Ecuador’s debt to China rose from US$7.1 million in 2007 to US$7.97 billion in October 2016, this was officially reported by Ecuador’s Ministry of Finance (El Comercio). 

Vice President Glas will be registered for re-election

Through Twitter, the governing party’s presidential candidate, Lenin Moreno, announced he and current Vice-President Jorge Glas will register on 16 November 2016 as the Presidential and Vice-Presidential candidates for the ruling party--Alianza Pais (El Comercio, 15 November 2016). Moreno and Glas were to originally register their candidacies on 14 November, only to have the registration event cancelled. It was widely speculated that the candidacy registration was postponed due to possible ties from Vice President Jorge Glass with the Panama Papers. President Rafael Correa along with other local and parliament candidates from Alianza Pais will be present when Presidential ticket is registered at The National Election Council (El Telegrafo).

Ecuador's Vice President accused of money laundering and involvement in Panama Papers

Panamanian newspaper 'La Estrella' published a column on 2 November 2016, allegeding the Panamanian Government possess a report accusing Ecuador's Vice President, Jorge Glas, of money laundering and involvement in the Panama Papers. The column goes on to add that a high ranked Ecuadoran government official traveled to Panama to prevent the release of this report (Andes, 5 November 2016). Ecuador's President, Rafael Correa, denied the accusations, labeling the publication as irresponsible, without context, or sources (Andes). Ecuador's General Attorney Galo Chiriboga announced that through the Ecuadoran Embassy in Panama, a formal complaint to this newspaper will be placed, demanding the basis and sources to this report (El Universo, 7 November 2016).

Ecuador's sea shipping industry suffering from downturn

While Ecuador has invested in coastal cities such as Posorja, Bolivar, and Manta, the shipping by sea industry has taken a downturn. An excess of transportation space, lack of products, and a reduction in shipments has affected operation costs in the sea shipping industry (El Comercio, 4 November 2016). Ecuadoran Sea Transportation Chamber President Juan Jurado explained the acquisition of freight ships a few years ago has not been justified, because the market has not grown accordingly. Jurado estimates that for October 2016, there is a 35 percent decrease in shipments in comparison to the same period in 2015. According to the Costal Cities Secretary, the number of ships arriving in Ecuadoran costal cities fell by 113 ships compared to 2014.

Ecuador saves money with hydroelectricity

The President of Ecuador’s Electrical Corporation (Celec), Luis Ruales, revealed that 85 percent of the electrical energy consumed in Ecuador is produced by local hydro power plants. (El Telegrafo, 29 October 2016). Ruales estimates that Ecuador saves around $1.3 billion each year, which would have been used to import fuels that produce energy. An additional eight hydro power plants are currently under construction (El Telegrafo).

Dutch Beer Heineken fears new monopoly in Ecuador

Representatives of Heineken Beer in Ecuador consider that a fusion between Cervecería Nacional (SABMiller) and Ambev (Anheuser-Busch Inbev) would create a monopoly that would possess 97 percent of the market (El Universo, 2 November 2016). The merger has already been approved, but has yet to be finalized by the agency that regulates, controls, and corrects the functioning of the markets--La Superintendencia de Control del Poder de Mercado (El Universo). Heineken’s lawyer, Jose Javier Jarrin argues Heineken is not completely opposed to the merger, but thinks the conditions must be revised. Jarrin indicated the way the merger has been established, it would be difficult to be competitive in the brewery market (El Universo).

Ecuador's tourism industry expects recovery during the November holidays

In Ecuador, the longest holiday vacation of 2016 will occur from the 2 to 6 November, and the tourism industry expects a recovery from a year that has seen a decline in tourism (La Hora, 1 November 2016). According to the Board of Tourism President Holbach Muñeton, the decline in the economy and the earthquake in April have been major factors that contributed to the decline in tourism (El Tiempo). Up to September of 2016, Ecuador’s Board of Tourism estimated that 60,000 less tourists from Peru and Colombia traveled to Ecuador in comparison to the same time the year before.

Expections grow in Tulcan, Ecuador due to customs reform

Businessmen of Tulcan, a small city in Ecuador that borders with Colombia, applauded the federal government’s decision to restrict national travelers who re-enter the country by land with printers and televisions (El Universo, 30 October 2016). This measure is a layer added to the “Commercial basket” law, which went into effect on October 2015, where businessmen from five Ecuadorean provinces can import selected appliances from Colombia duty-free and without safeguard measures. This law was implemented to incentive national tourists to purchase appliances at competitive prices within Tulcan. Thousands of Ecuadoreans travel each year to Colombia to purchase appliances, more commonly televisions, printers, and laptops (El Universo).

 

Ecuador’s political opposition parties split for the upcoming 2017 Presidential Election

The political initiative called “Unity,” which consisted of most major political parties opposed to the ruling party “Alianza Pais,” has officially disintegrated (El Universo). The idea to unite all major political opposition parties emerged in early 2015 to challenge a then possible re-election of current President Rafael Correa. In September 2016, President Correa announced former Vice-President Lenin Moreno will be the Presidential candidate for Alianza Pais in the upcoming February 2017 election, ending any speculation of a possible reelection for Correa (El Universo).

 

President Correa promotes advantages to investing in Ecuador

The first annual Ecuador Investment Summit was held on 25 October 2016 in Quito. In front of 140 foreign investors from 26 countries around the world, President Correa promoted the advantages Ecuador possesses to attract foreign investment (El Universo). Among the advantages, President Correa highlighted the country’s infrastructure, which includes major improvements in roads and highways, new hydroelectric power plants, human talent, and tax incentives. From the Investment Summit, Ecuador’s government hopes to capture more than US$40.8 billion in overall investments. The Development Bank of Latin America (CAF) and the Inter-American Development Bank have committed to Ecuador with financial help (El Telegrafo).

 

President Correa accuses Anonymous of attempted hacks

Ecuadorian President Rafael Correa accused "Anonymous" of trying to hack presidential communication systems on 24 October 2016 (El Universo). According to Correa, the alleged hack attempt was retaliation for the Ecuadorian government's decision to block Julian Assange's internet access (Telégrafo). Assange, founder of whistleblower website Wikileaks, has resided in the Ecuadorian Embassy in London since 2012, when the Ecuadorian authorities granted him political asylum. In recent weeks, Wikileaks has released numerous leaks that impact the U.S. presidential campaign, and the Ecuadorian government decided to restrict Assange's internet access to preserve Ecuador's principle of non-intervention in other countries' electoral processes (Andes).