Ecuador PEST analysis,and foreign investment analysis.

2. POLITICAL FACTORS
 Ecuador has been caught in cycles of political
instability.
 Ecuador's political parties have historically been
small, loose organizations that depend more on
populism.
 Beginning with the 1996 election, the indigenous
population has participated actively in the official
political system.

3.  On January 15, 2007, Rafael Correa was sworn in as
President.
 He enjoys a sustained popularity in all regions of the
country and among a broad array of class and
demographic groups.
 President Correa's (PAIS) movement is the predominant
political force in Ecuador.
 His government has increased spending on:
housing, health care, and other popular social programs.
Other
Health
Housing social
care
programs

4. ECONOMIC FACTORS
 President Correa's economic priorities include:
Higher social spending
Control over strategic sectors
A greater share of natural
resource revenues for the
state.

5.  The government’s economic policies have created
some uncertainty for the business community.
 The World Economic Forum's Global
Competitiveness Index rated Ecuador 105th out of
139 countries for 2010-11.
 The Ecuadorian economy is based on:
Petroleum Agricultural
Manufacturing Commerce
production production

6.  The oil sector typically accounts for 15%-20% of
GDP, and 30%-40% of government revenues.
 With oil contract renegotiations, public and private
investment in the sector is expected to increase, along
with production levels.
 In early 2011, government negotiations commenced with
mining companies interested in moving from an
exploratory phase into production.

7.  The Ecuadorian Government enacted a
Production, Trade, and Investment Code in late
2010.
 The code is intended to promote production of
higher value-added products, in particular by
small and medium-sized businesses.

8.  From 2000 to 2006, growth averaged 4.9% per year.
 In 2007, economic growth slowed, constrained by
declining petroleum production and reduced private
sector investment.
 In 2008, the economy recovered, posting a 7.2% real
annual growth. By the end of 2008, the global financial
crisis and economic downturn led to falling remittances
and declining oil revenue for Ecuador.
 In December 2008 the government defaulted on certain
debt issuances. In June 2009, the government
repurchased 91% of the Global bonds, at a 65%-70%
discount.

9.  In 2009, economic growth slowed due to a fall in
internal demand
 As the global economy began to recover in
2010, Ecuador’s economy rebounded with a 3.6%
growth rate.
 The Ecuadorian Government’s official forecast for
GDP growth in 2011 is 5.1%

10. FOREIGN RELATIONS AND INVESTMENTS
 Ecuador has increased its efforts to strengthen and
diversify its political and economic ties with countries in
Latin American, Europe, and Asia.
 His government has signed agreements to promote
economic cooperation with:
Peru, Chile, Brazil, Argentina, Venezuela, Costa
Rica, Panama, Uruguay, Haiti, and Cuba.
 Similarly ,outside the region, Rafael Correa has signed
agreements with Spain, Italy, France, China, Iran, and
Russia, among other countries.

11.  The United States is Ecuador's principal trading partner.
 In 2010, Ecuador exported about $6.04 billion in
products to the U.S., more than a 30% increase over
2009, and accounting for about 35% of Ecuador's total
exports.
 The United States exported $5.4 billion in goods to
Ecuador in 2010, a 38% increase over 2009, accounting
for about 26% of Ecuador's imports.
 Ecuador is the 39th-largest market for U.S. exports

12. IMPORTANT FACTS
 Ecuador is a growing trend of investment from the
conception of aggregate demand accounts.
 The investment, measured as Gross Fixed Capital
Formation (GFCF) represents 25.2% of GDP in
2010.
 In 2000 it represented just the 20% of GDP.

13.  Cely,N., Estrategias económicas y comerciales
2011/02.
http://www.nathaliecely.com/2011/02/estrategias-
economicas-comerciales-
y.html#!/2011/02/estrategias-economicas-
comerciales-y.html
 Bureau of Western Hemisphere Affairs ,June
8, 2011, Background Note: Ecuador.
http://www.state.gov/r/pa/ei/bgn/35761.htm