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General Information |
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Ecuador is situated on the equator in South America, and as such occupies land in both hemispheres. It has borders with Colombia to the North, with Peru to the South and East and with the Pacific Ocean to the West.
The country has a surface area of 256,370 km². Ecuador is divided into four different administrative regions, made up of 22 provinces:
Coastal Region: Guayas, El Oro, Los Ríos, Manabí,Esmeraldas.
Highland Region: Pichincha, Cotopaxi, Imbabura, Chimborazo,Bolívar, Tungurahua, Carchi.
Amazonian Region: Azuay, Cañar, Loja,Morona-Santiago, Napo, Pastaza, Zamora-Chinchipe, Sucumbios, Orellana.
Galápagos Islands.
"Ecuador is an independent, democratic, unitary, sovereign State. Its government is republican, presidential, elected, representative, responsible and alternative. Sovereignty belongs to the people and is exercised through the institutions of public power."
The country's official language is Spanish, although there are still many speakers of the indigenous highland language, Quechua.
The official currency is the US Dollar.
Over 95% of the population considers itself Roman Catholic.
Official National Holidays:
January 1st: New Year
February 27th: Civic Day
March: Easter Week (Thursday, Friday, Saturday and Sunday)
May 1st: Labour Day
May 24th: Battle of Pinchincha / Independence Day
August 10th: First Cry for Independence
October 9th: Independence of Guayaquil
November 2nd: All Souls' Day
November 3rd: Independence of Cuenca
December 25th: Christmas
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Strategic Location |
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Geographical location
Owing to its geographical position, Ecuador has certain natural benefits that allow us to meet the demands of our neighbouring markets, including Peru, Chile, Bolivia and Argentina, in the South American region. 
Ecuador also has rapid access to those Central American countries that lie on the Pacific coast.
Venturing further out into the Pacific, there are other strategic markets with great future potential. Although Ecuador trades with Japan, Korea and China in Asia, and with the west coast of the United States, commerce with these countries has the potential to grow almost boundlessly, given the enormity of these markets and their strong purchasing power. In this same Pacific region, relations with the countries of South Asia, Indonesia and Australia could all be strengthened.
Climate
Nature smiled upon Ecuador. It has a great variety of climates, all within close proximity of one another.
The hot and humid climate of the coastal region, for example, lends itself to agricultural activities that require plenty of light for growth, and a period of intense rainfall to invigorate the regeneration of the land and its nutrients. An hour and a half's journey from here and we start to ascend to a milder climate; another hour and we find ourselves in the icy cold of snow-capped mountain peaks. On the other side of the Andes, in the great Amazon basin, lies the humid tropical rainforest, home to as great a diversity in flora and fauna as any country could offer. Each climate represents a world of different economic activities in which to invest.
There is also the chance to visit Ecuador's beaches. Dispersed along more than 2,500 km of beaches, Ecuador boasts a wide range of tourist attractions, very few of which have yet been fully exploited. We must also mention the Galapagos Islands, an ecological and tourist reserve with a whole host of attractions, although here there are certain procedures that must be observed in order to invest.
Labor costs
Real wages in Ecuador have been on the increase since the economy converted to the US dollar.
We must bear in mind, however, that unforeseen rises in inflation had led minimum real wages at the time of 'dollarization' to be 30% less than in 1997, and current wage increases have still not managed to increase figures to the levels recorded before the great Ecuadorian recession of 1999. Nevertheless, well aware of the difficulties that a system such as 'dollarization' involves with regards to adjusting to negative impacts, labor reforms have also been introduced in order to give more flexibility to the labor market and to permit hiring by the hour. This and other endeavors to promote flexibility evidently signal a major difference between Ecuador and those countries that are unable to reduce wages or affect the exchange rate.
Total Production Costs
Ecuador may start to experience high labor costs as a result of the system of 'dollarization'. However, the opening of capital accounts and the relative flexibility of the labor market create a more suitable climate for minimizing the production costs of Ecuadorian businesses, compared to those of other countries. What's more, the constant risk of devaluation in Latin American countries, that threat of exchange-rates destroying the solvency of businesses, complicates the decision to make long-term investments. Of the many advantages that Ecuador can offer investors considering investing in a Latin American country, the 'dollarized' economy is, without doubt, the most significant.
Communications
An important consideration in deciding to invest in a country like Ecuador is the ability to maintain rapid, low-cost international communication. All businesses need to keep in touch with both international suppliers and clients. The ability to replace a part, or deliver goods to any given port, directly depends on the communications network that exists in the country.
This document outlines the rapid growth of Ecuador's connectivity, which is most evident in the expanding number of fixed and mobile telephone lines and clients signing up to Internet services. Immediate contact can easily be made between Ecuador and other countries and, owing to the wide range of suppliers that operate in the telecommunications market, can be made at a very low cost. It is also worth highlighting that Ecuador boasts five large maritime ports and two large airports, which foreign suppliers and importers can use to deliver or receive goods.
Transport
Ecuador's distance from both Europe and the northern US market has instilled in Ecuadorian producers the need to develop greater efficiency, which in turn gives rise to low costs. We know from previous experience that transporting merchandise across the Panama Canal incurs maritime transport costs and makes our products susceptible to price increases before being received by clients. These transport costs, since they depend on fuel prices, are highly volatile, but generally speaking are rising slightly.
Producers and firms that invest in Ecuador have an advantage in this area. Traditionally, the National Government sets relatively low prices for fuel used in both industrial machinery and shipping. In the case of Ecuador's closest markets, such as the Southern Cone and Central America, we can offer very low rates for the transporting of goods. This provides a special incentive for investors planning to satisfy demand in the Southern Cone from the vantage point of Ecuador.
Service
Through conversion to the dollar, the Ecuadorian economy has strengthened its service sector. Tourism is, without doubt, one of the most significant areas of this sector, since it comprises more than 10,000 establishments and has demonstrated an annual growth rate of more than 5% in the last few years. Not only has the tourist industry grown, but there has also been considerable expansion in auditing and accountancy consultation services, areas related to marketing and publicity, business management and economic analysis, amongst others. It is to be expected that businesses that require no capital investment in fixed assets tend to establish themselves in a country with hard currency, with the aim of serving clients in neighbouring countries, since the use of hard currency guarantees stability of the exchange rate for their transactions.
Natural Resources
It can easily be asserted that Ecuador is rich in natural resources, since it has one of the highest levels of biodiversity in the world, abundant water resources and significant forest areas. It is also a country of highly fertile land, non-renewable resources such as petroleum and other minerals.
For this reason, Ecuador is a country that can guarantee traditional interests such as profitability, whilst at the same time achieving environmental conservation objectives, which are now an interest of paramount importance for all countries of the world.
Biodiversity
Ecuador, together with Brazil, Colombia, Peru, Mexico, Zaire and Madagascar, has been declared one of the seven megadiverse countries which collectively are home to 60 to 80% of all species of life on earth (Mittermeier 1988).
Ecuador's land surface is inhabited by 25,000 species of vascular plants, which is more than the entire number of this type of species living in North America (17,000), approximately 11% of species in the world and 33% of species recorded in Latin America.
Ecuador's natural forest areas contain wild relatives of crops such as avocado (persea spp), papaya (carica spp.) and naranjilla (solanun spp), amongst others.
Ecuador contains 11 of the world's 110 priority bird conservation areas. The western and eastern foothills, the central Andes, the dry forest of the south-western area, the River Napo region and the Galapagos Islands stand out as particular examples of these (ICBP 1992).
Ecuador is considered one of the top-priority countries for conservation (Dinerstein et. al. 1995) due to its great diversity and endemic species, particularly on the Galapagos Islands.
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