Road to Competitiveness

Ecuador for decades has been an economy dependent on oil exports. However, the growth of non-oil private exports has been driven by agricultural, aquaculture and floriculture products that, if they improve their competitiveness, have the capacity to continue growing, generating jobs and wealth for the country.

In the current global context (effects of the pandemic, global inflation and shipping crisis), working to improve the competitiveness of the Ecuadorian agro-industrial sector, and the banana sector, is a pending and necessary task. Evidently, both the public and private sectors have a role to play to achieve this horizon.

For businesses to grow, the country needs to have a favorable, stable and secure environment in terms of tariff and fiscal policies and a reliable long-term legal framework. At the same time, the development of companies must be complemented by a commitment from the private sector to invest in their value chains in order to seek productivity and efficiencies that allow them to grow and develop in the sectors in which they operate.

Currently, Ecuador leads the world banana market. But the dynamism of many markets, as well as that of our competitors, challenges us to urgently work on competitiveness so as not to lose the position that we have gained over many years. If we make a comparison with other banana-producing countries in America, it is easy to see that the cost of producing a box of bananas in Ecuador is higher in practically all its items: labor, fertilization, fumigation, supplies, packaging, transportation, etc. On the other hand, the lack of productivity compared to our competition has not been a helping factor to offset the sustained rise in costs.

It is worth mentioning that Ecuador has made a great effort to have labor and environmental legal standards that are more demanding than our competitors in the region. In this sense, we are steps ahead in terms of social and environmental responsibility than our competitors, but this implies higher costs that are not always recognized by international markets.

The competitive roadmap:
- Dismantle unconstitutional laws in the tax field.
- Review of the official pricing system in accordance with the reality of the market.
- Regulate the existing law so as not to export taxes.
- Simplify procedures for export.
- Maintain international trade openness and finalize free trade agreements with the main markets.
- Execute a competitive tariff policy with our competitors for basic materials imported from the industry.
- Intelligently open the financial markets and the stock market.
- Open a special chapter in the labor law for the agricultural sectors that allow sustainability, employability, formality and labor inclusion in rural areas.
- Combat informality in the industry.
- Strengthen education, including agricultural technical education.
- Strengthen research and development in the fields of technology and innovation applied to agriculture.
- Create incentives for employment, investment, foreign exchange to results.

Regarding the management of the private company, work must be done on:
- Maintain a strategy of openness, diversification of suppliers and markets.
- Invest in adapting technologies and innovation for the efficiency of processes and resources.
- Invest in research and development of new products.
- Invest in the development of human talent.
- Implement a productivity plan.
- Develop collaborative strategies with other companies in the industry and the value chain.

Sectoral associativity as an articulated and efficient network is also relevant for the strengthening of banana exports. In the coordinated work, both the needs of the industry and its solutions are shared. Since there is unity and the will of the parties involved, it is possible to propose and develop comprehensive strategies with public-private articulation.

Heading toward greater competitiveness is a task that cannot be postponed and requires the commitment and determination of the public and private sectors. Let us embark together on this path that will serve to strengthen the sustainable growth of our exports to generate employment, foreign exchange and wealth for our country.

Vicente Wong Naranjo
CEO