The struggle to build a Nation

Mrs. Ivonne Juez de Baki Interview with:

Mrs. Ivonne Juez de Baki
Minister of Trade, Industry, Fishing and Competitiveness.

Quito, May 23rd 2003
"Ecuador 2007" sets the stage for a trade framework to improve the international outreach of Ecuador. How did the plan evolve?

The aim of the government as a whole is to create the atmosphere of credibility, stability and to create unity between the Public and the private sectors in order to make to economy stronger. This strong base of a economic and social connection is reflected in the President's vision: to fight poverty through work and by attracting investment.

We have learned that we cannot create if we do not work as a team. I have accepted this challenge because I believe that together we can establish a stable fiscal system and to find solutions to the other issues like corruption. So this is the basis for which we launched this medium-to-long-term project: "Ecuador 2007".

This project aims to promote the trade sector, yet it also recognised that we also need to develop the productivity base of this sector. Our goal is to show to the rest of the world that Ecuador is not only famous for its traditional bananas, coffees, roses, tuna, and vegetables, but it is also rich in value-added products which investors will find once they arrive here. We propose to promote exports by attracting investors.

Another important goal is the promotion of local and foreign investments, which has led to a strong collaboration with COMEXI to implement legal measures which will guarantee the security of investors and to guarantee the return on their investments.

We are also preparing future trade negotiations for which we are in the process of recruiting international trade consultants. Yet we also believe in the development of social trade, which we have outlined in our plan: "Ecuador al alcanse de todos" (Ecuador at the reach of everyone). This idea started with the promotion of electro-domestic products that are available at low prices through long-term payments, and it will continue with access to low-cost, high quality shoes, textiles, furniture, food as well as a community centres that offer access to computers, printers and faxes.

Moreover, we are establishing a major shrimp cultivation program with new technologies. Many people know that Ecuador is the first producer of bananas in the world, but not many people know that Ecuador is second in the world for farming shrimps.

Do you believe that dollarization, although it might have provided stability for the country, has scared off investors because of the high cost of doing business and producing locally for export markets?

I think the situation is both positive and negative. American or European economies have prices higher than we have, therefore we are still competitive. We should not forget that the dollarization has brought stability in Ecuador, with less risk and less inflation.

Meanwhile, regional exports have become much more expensive when we compare with other countries such as Peru and Colombia because of their devaluation, and that is why we cannot compete with them. To overcome to this problem we need to work harder and be more competitive by bringing in more technologies in order to improve our value-added production and create more quality with greater quantities.

Certain sectors of the economy already produce quality products, such us roses, cacao and bananas - yet we are not in the position to provide large quantities as well. To achieve this aim, we are working with National Council for Competitiveness in order to improve our competitive edge and to adopt new technologies.

Chile has developed its wine and salmon industries to become booming sectors for export sales. Their key success was to develop niche markets - do you believe that this is the strategy that Ecuador should adopt?

The niche market can definitely be seen as the future of the Ecuadorian economy. Similarly, Chile has concentrated on the development of a few key products and supported this tendency with marketing efforts that promoted the quality of its products worldwide. In comparison, Argentina may cultivate the same quality of wine but they have not promoted their product as well as Chile has done. Therefore, we propose to develop niche markets and transform good products into great products.

A country that is dependent on oil resources often forgets some of its other natural assets. So at the same time we are intent on developing existing markets and developing new ones in order to diversify our economy.

Foreigners actually do not know that Ecuador is the world's first producer of bananas… that Galapagos belongs to Ecuador… and that you cultivate the most beautiful roses in the world…

Yes, I feel frustrated when I hear this commentary; some people ask me if I ever been to Galapagos in Peru! Similarly, most people do not know where their bananas come from… Therefore, part of our efforts is the development of a national brand which will promote Ecuador in the world for what it is and for what it has to offer. Ecuador is an amazing country, it is not only banana or roses; we have exotic fruit and exotic flowers thanks to the quality of our land, the climate and the direct light from the sun. For example, we have the best quality cacao in the world because of the fertility of the Ecuadorian soil, yet unfortunately it is only being mixed with other cacaos, so most people do not even know that Ecuadorian cacao is one of the best.

Another example of our lack of national branding is the "Panama Hat"; few people know that the Panama Hat is from Ecuador, made in the cities of Montecristi and Cuenca. These are only few examples of the huge work we need to do in order to promote our national production as an internationally recognised Ecuadorian product.

Do you believe that Ecuador can realistically establish bilateral trade treaties with countries such as Canada or Mexico in the short term, or is it only a dream in the long term?

First we need to extensively work through Andean Trade Pact to establish guidelines and enter into a treaty that incorporates zero taxes with unlimited quantities. This is a first step towards the FTAA.

Through the Andean group we are negotiating Canada, which is an advantage since a bilateral agreement would take much longer to conclude. If we work as a trade block we will be stronger, which can later support greater collaboration with the USA, Mexico and Canada. We have adopted a global vision which encourages us to work with all countries, not only the Unites States.

Are you going to protect some of the export-oriented sectors, such as the fishing and meat industries?

We will protect them to a certain point. The USA is protecting some of its strategic sectors, so we will also do the same, and that is one of the reasons for which we are negotiating before taking adopting new policies.

It was thought that the Korean company LG was heavily investing in the country, yet the investment did not materialise, which has left the government with false hopes and empty hands. So what can we expect as far as investment opportunities are concerned?

The energy sector is very important for the future of Ecuador, and numerous foreign companies are positioning themselves to invest in the national oil and gas sector. For example, I was recently in Qatar where there was a great deal of interest to invest in Ecuador, which paved the way for the upcoming arrival of a commercial delegation. President Gutierrez has been travelling in the Middle-East, first in Qatar, and then to Arab Emirates, Kuwait and Egypt. We have also been developing trade relations in Europe, where many companies such us Shell from Holland and Total from France are ready to invest here. Even though it is true that Agip is planning to leave the country, Burlington is ready to buy its participation.

We are working on all the aspects of our legislation to offer investors the best possible conditions and legal guarantees. These companies are interested because they are aware of the potential that this country has -we are have built a second pipeline and the country has a great deal of oil reserves to be exploited, with over 5 billion barrels in reserve. Although we have not exported the same amounts as we used to - exports are down to 160.000 barrels from a previous maximum of 300.000 barrels - we have projected a production which will reach 850.000 barrels in the coming year.

How do you manage such a wide range of responsibilities?

In order to overcome this difficult period, Ecuador needs people that believe in it and that have the passion to work tirelessly to achieve their goals. I follow a team philosophy by bringing together the best people under one team. I believe that leadership should be shared by everyone - only this way can we work together towards one goal and can walk in the same direction. For example, during the first months of my tenure we all worked together to design the guidelines of a new strategy which has set the tone for "Ecuador 2007". I work with passion and I transmit this passion to all people working and collaborating with me.

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