You may have read in the news about the problems of Ecuador in recent days and wondered why I am investing in Ecuador. One of our goals is to help our readers get Ecuador news beneath the news. The problem today with popular media is that it has to cater to the lowest links for the sake of volume. Sex, scandal, death and destruction sell and in the mad scramble to fill every issue with as much attention grabbing horror as possible, most media make over small bits of the most horrifying events of the day and little more.
Our goal is to dig deeper. In this case I turned to several Ecuadorian friends for their views. One is a powerful Guayaquil businessman connected at the highest political levels. The second is an attorney from Quito. I chose these two because one problem in Ecuador is the continual struggle between the populations in the cities of Quito and Guayaquil. As one Guayaquileno once put it, we make the money here in Guayaquil and they (the politicians) spend it in Quito. The cities have existed for centuries in a state of mutual distrust.
The third is a foreign businessman who has lived in Ecuador for many years and has a very successful business, the fourth an indigenous leader.
The first reply is from my friend from Guayaquil. For reasons that will be obvious he remains unnamed. He is connected at the highest levels of business and government in Ecuador.
My friend writes:
“Ecuador is still under the spell of gloom that befell about two years ago. I saw it one year before that, but I did not know what to do about it, and I did not want to believe it either.
“Now the opposite has happened. There is a small light showing at the end of the tunnel. It is small, but steady. God bless it. We must not talk about it – too much. It is called Manta.
“Manta did not exist in colonial times. The pirates and sea robbers made it unthinkable to have a port facing the ocean. The nearest port had to be thirty miles in, at least.
“I was in Manta, I had not been there for ten years at least, it has improved a lot in that time. There is so much that can be done. Manta is like a little baby. In Manta, the help can come in little ways, totally invisible to the public that is not “in”. Hospital, schools, Univ., urban development, you name it. As I said, all this is very small right now, but it is moving ahead in the right direction.
“This is all very complicated, I hope it works for the best. Unfortunately, it brings us close to our President, and that is not what we want, we want to keep him away.
“There has been an Indian rising. They have gained attention but unfortunately they do not have a plan, or people, or anything. It was just a rising of “down with everything”. Down with the President. Down with Congress. Down with the Judicial. This is a typical rising of communal soul formation, or soul development, it is basically downs versus ups.
“They are however much better organized and have clearer objectives, and words than they had, say fifteen years ago. Of course they still need another time to be at par as an ethnic group. It will come if you give them time, fortunately.
“The unfortunate part is that it is all taking place at a moment when their negativity can cause a lot of damage, they also say down with dollarization.
“The new President? He is my personal friend, a great guy, but not the right man for the crisis, as he is too flat footed. Everything the previous man has done is wrong.”
The second insight on Ecuador was sent from Dr. Andres Cordova. Dr. Corova is the grandson of Ecaudor’s past President and his law firm provides legal counsel for many financial institutions. The firm works with foreign banks established in Ecuador and otherwise and is legal counsel for the Central Bank of Ecuador, the Superintendency of Banks.
Some of the members of the firm have participated in the making of some of Ecuador’s monetary and banking decisions and one of the senior partners has been Superintendent of Banks on two occasions.
Though the firm acts as counselors to many of Ecuador’s finance and banking entities, they advise on specific areas, upon request, and do not represent, in any way, the institution’s position on different subjects so they can offer us an unbiased view.
The firm has information and views from inside Ecuador’s finance and banking fields and great contacts so they can prepare reports, furnish helpful information, and answer inquiries promptly for any member who wishes to retain them for any specific project.
Dr. Cordova writes:
“We had quite a recent scare. During the past several months the people of Ecuador had become increasingly infuriated with the President’s conduct of governmental affairs.
“We had a situation where very little support was given either to President or to this military insurrects. A Constitutional solution had to be applied.
“As much as I believe the president to be corrupt and incompetent, I was deeply angered and saddened by the whole situation.
“The bottom line is that there was some sort of democratic solution to the crisis. The Country is calming down. There is this bitter feeling about the whole situation, but who knows, maybe it was for the best.
“What is going to happen? Well, first of all, most of the country sees this outcome as the proper one, given the circumstances. This is a good thing, for it somehow reestablishes the faith and tranquility we all need. Also, it brings stability, for all major players in this social and economic machinery are in favor of the outcome.
“The international community, represented by the different States, has manifested its approval of this Constitutional solution to the crisis, and is currently supporting Ecuador (at least rhetorically) in its struggle to shape up.
“The new President is regarded to be a good, honest man. He has changed most of the different Ministers and Secretaries of the Government and it is likely we are somehow facing a fresh start. Maybe it’s a little bit of wishful thinking on my part.
“These past days we have seen a very good attitude in most of the industrial sector. The have committed to lower some prices and to raise the wages. Somehow a feeling of responsibility and that we are all part of the solution is surfacing. I sure hope so.
“The crisis is very deep and we still have some rough years ahead. I would want to believe that we have nowhere else to go from here but up.
“I think after this episode the Country is going to try and move forward with more enthusiasm and drive. The new President is going to be in power for the next three years. This will help stabilize the country, for no one will be speculating on the elections, as if they were to be held in a few weeks or month’s time.
“This new President may do a much better job than the last one. Most of all because he does not come into power all tainted by strings-attached political supports and contributions that he needs to pay back. He can freely conduct the government without having to pay back all sorts of favors. Also, he is apparently an honest man.
“The Country is well aware of this and there is some sense of peace after all. It is still too early to tell how all of this will affect the country in the following months or even years, but it is safe to say that Ecuador still offers good and safe investment opportunities, provided they are well reviewed and screened.
“I understand many foreign investors may view Ecuador as an anarchic country which is falling apart by the day, where their investments are in no way safe. This is not true.
“In this crisis, many good investment opportunities exist. Real estate, for example, offers very nice investment opportunities. This kind of investments are, of course, better on the mid to long term.
“When the better times arrive, hopefully some two to three years from now, and then on and on. As exports grow and the economy improves, the new flows of cash and the economic recovery and good health will make it more difficult to find good deals on certain areas.
This may be a signal to buy now.” Andres
The Third Viewpoint
The third reply is from my friend, the European businessman who has lived in Ecuador full time for the last six years and has many business interests and real estate holdings:
“The last president seemed to be a better man but he had done too many dirty deals with the political and specially the financial sector to be trustworthy. The current president seems to be a very honest man with no such connections and that may be what the country need now. 80% of the people still want to dissolve the congress, mainly because of the corruption.
“I do however believe that the president will face huge demonstrations again this summer when they will have to increase the prices of gas, propane, electricity, etc. The country is said to spend US$ 700 million on subsidies this year if they do not increase the prices. This country may be impossible to run.
The final rely may be the most important of all as it is the Indiginistas that (quite rightly) have been making the fuss.
“I appreciate dear friend that the international news are very alarming; but the reality is very different since here in Ecuador everything follows with tranquillity and in the direction of the improvement of abundance and peace.”
This is why I have already started taking investors to Manta, Ecuador, a major seaport (350,000 pop.). The flood of Americans will make the town boom. Timing to make money could not be better. Check www.garyascott.com for more details.
There you have it…an article that seems to explain why Ecuador makes sense as a place to invest.
So Ecuador is interesting. Here is why this article is more interesting than most messages about Ecuador. This article was written April 15, 2000, over eight years ago. You can see the original message in our archives at https://www.garyascott.com/2000/04/15/1266.html
The daily news is sensational and incites worry. Those who look beyond it have a definite investing edge. Had I let worries reported in the news stop me from seeing the true fundamentals of Ecuador’s potential a decade ago, I and hundreds of my readers would have missed fortunes.
Ecuador still offers good opportunity now.
See why Manta makes sense now
Until next message may your news be positive, true and good.
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