Ecuador’s Competitive Edge
I have been watching comments for a while emanating from a South American nation, which happens to be focused on Ecuador. Focused as in, “That’s the competition and how are we faring against them?” My goal is to highlight certain observations about Ecuador, not to demean another nation in the slightest. So, I am purposely remaining vague as to who might be the other South American nation. Suffice to say that the observations are insightful and offer a unique perspective of Ecuador’s economic progress directly from the eyes of a competitive foreign nation.
The first observation was rather mundane and statistical in nature, but certainly not lacking in importance. The World Economic Forum has a ranking system to determine the global progress of nation-state economies. A five year analysis showed Ecuador moving significantly up the economic ranks, a total of 34 spots. Relatively speaking, this is a very significant 5-year positive jump in economic rankings. By contrast, the nation making this observation had pretty much flat-lined during the same 5-year period. They weren’t under performing or doing poorly, but rather were just not seeing the same dramatic rate of economic progress that they saw their neighborhood competitor enjoy. Phrased differently, they we losing ground to the competition.
Secondly, this competitive nation-state, laid the success of Ecuador’s economic stimulus at the feet of President Rafeal Correa. To say that Mr. Correa’s policies and those of the nation making the observations about Ecuador were in lockstep would, let us say, be an extremely optimistic correlation. Correa and the other nation-state often saw the world very differently and could even be said to find themselves at odds occasionally. In fact, in the media of the other nation-state, Correa was often depicted as arrogant, unsympathetic and impetuous. Not exactly the words to describe an economic saviour and, yet, that is exactly how this other nation viewed Correa’s role in Ecuador’s economic resurgence. The implication was that the observing nation-state had lacked the dynamic leadership that Ecuador enjoyed with Correa.
Thirdly, observations were made by the other nation-state, which focused on Correa’s dramatic infrastructure building campaign, as the cornerstone to Ecuador’s success. Clearly, the view was that the observing nation had not engaged in such a dramatic infrastructure building program in quite some time. The Ecuadorean examples cited included, the laying down of 7,000 kilometers of new roadways, under Correa; the ubiquitous building of bridges and highway interconnection roads; the enhancement of port facilities; and a renewed effort to dramatically expand the technological vanguard. Quite the observations and all obviously accurate from my personal perspective. For good measure, great note was also given to Correa’s emphasis on airport construction and revitalization, as well as renewed efforts at advancing hydroelectric power capacity.
I wonder what this same observing nation would think, now that progress is beginning on a brand new metro train line for Quito, which will transport 400,000 daily passengers and the newly devised light rail train line projected for Cuenca, which will relieve the current traffic congestion issues into and out of the central town areas? More fuel for the progressive economic fires to burn brightly in Ecuador’s future.
Fourthly, and broken away as a stand-alone observation, not included in comments about infrastructure, mention was made about the progress of education in Ecuador. Not just the countless number of new schools built, but the dramatic improvement in the quality of education, while actually reducing the base cost of education for all Ecuadoreans, making it easier for them to access the educational system. This would be lofty praise in the form of a “State of the Nation” speech, but coming from a competitor nation, quite lofty the praise.
Further mention of Correa’s educational reforms and their impact on Ecuador’s rising economic prowess, focused on his implementation of a strict standardized merit-based system, for both teachers and students alike. The new system made teachers fight to keep their career positions by proving competency, when previously often patronage would do, and kept students competing to improve their grades, in order to qualify for higher levels of education and special funding. In fact, as was noted, the progress was so stunning that Ecuador jumped 40 spots in the same 5-year period, in the “higher education” sub-category, when tallying the nation’s economic progress.
The next major observation focused on a subcategory of a sector already discussed – technology. Observations were made regarding the Yachay project known as the City of Knowledge, which aspires to be the Silicon Valley of Latin America. An entire city dedicated to the research, innovation and application of new technologies, drawing global talent to the project. It was clear that no similar projects were noted in the country making the observations about Ecuador, with the latter seeing an amazing jump of 60 spots on the World Economic Forum report, in the technology sub-category.
In short, the conclusion seemed to be that as long as Ecuador continued to dream, to dare and to be inspired, it would continue to make significant advances relative to the competition in Latin America. Citing the viewpoint from the nation making the observations on Ecuador, it was noted that it was a lack of vision, will power and a cohesive strategy that led to losing so much ground, on a relative basis, to Ecuador’s economic resurgence. The closing statement was prophetic, “Ecuador is finally on the right economic track. Either we must correct our own path, or the economic train will simply leave us behind.”
While I wrote at length, in a previous report, about Ecuador’s stunning infrastructure and economic advancement, it is refreshing to see many of those same observations of Ecuador competitiveness are mimicked not by the government of Ecuador, but by a competitor nation-state. It shows that Ecuador is most certainly headed in the right economic direction. Hope value investors don’t miss the train as well.