How would you evaluate Ecuador’s investment outlook?

EDUARDO CHECA Ecuador, right after Peru, is the country that is forecast to grow the most over the coming year. In order to make our future sustainable and look at investment in the long term, reducing the level of poverty is key. To do this, we have to be able to attract foreign investment. Other countries in the region, such as Colombia, Peru, Chile, and Brazil, have a base of economic growth that has been established as a result of FDI.

The World Bank expects Latin America to grow by almost 4%. How do you foresee the local economy developing in comparison?

RAMIRO CRESPO Expansion has been government-promoted thus far, with significant expenditure because of the high price of oil and loans from China. We have to convince the private sector to invest more in Ecuador, and prepare in case the price of oil goes down. This means diversifying our exports and sources of income. There are pending issues such as possible free trade agreements (FTAs) with the US and Europe, and the promotion of FDI. It is interesting that four out of five of the largest insurance companies in Ecuador are multinationals. People would not expect that to be the case, but currently the insurance sector is populated by companies from Australia, the US, Spain, and a few other countries.

EC There has been huge growth and consumption, but I believe that we are relying too much on oil. The more we can diversify the components of our means of growth, the more diversified sectors of growth we will see in the economy. We cannot just depend on oil, and the country has a huge potential in agriculture as the biggest exporter of bananas in the world, and a world-class producer of flowers, asparagus, cacao, and coffee. Rose growers in Ecuador depend heavily on markets in the US and Europe. A considerable percentage of the population works in agriculture and the flower business, and we have to develop the tools to be competitive worldwide, and to improve their standards of living. The FTAs are the challenge the government faces, because if we don’t have those tools, it will limit our growth.

What would you say is Analytica’s most significant success story?

RC We were named among the top 100 companies in the world in 2010, not only in finance, but also across the board. Even though Ecuador is not on the radar of many foreign investors or investment banks, there are still very good opportunities. We have been able to do our research and focus on our transactions, which has led to the company’s accolades. There were many investors and hedge funds that voted, so they were familiar with our work because of our international reach. Many of them received our research, which is one of the reasons why we were chosen among the best companies in the world, and were also familiar with specific deals and our sophisticated structure.

What do you do to promote foreign investment?

RC The Ecuadorean insurance market has grown from $600 million to $1.2 billion over the past five years, so we emphasize that this is a growing market. We are also looking for foreign investors who might be overlooking Ecuador and describing to them the ways in which it could be worth their while. The country is growing because it is an oil exporter, the price of oil is high, and the government is spending much more. However, to maintain this rate of growth, we need more resources. Foreign investment is one option, whereas another is going back to the international market. The need to maintain the rate of growth might be one of the triggers for policies that will attract more foreign investment. Ecuador is working to return to the international capital markets and is trying to improve its credit rating. For this reason, Ecuador welcomes credit-rating agencies. We don’t want to rely only on oil, one foreign investor such as China, or taxes. We need a plethora of new sources.