UNIVERSITY OF AZUAY FACULTY OF LAW SCHOOL OF INTERNATIONAL STUDIES Export Offer from El Oro: Mechanisms and strategies for a more attractive exportable supply in the province with the Transformation Productive Model Thesis submitted in partial fulfilment of the requirement for the degree of Licenciado en Estudios Internacionales con mención bilingüe en Comercio Exterior Author: Jean Paulo Rocillo Alba Tutor: Econ. Luis Tonón Ordoñez Cuenca, Ecuador 2016 Contenido Acknowledgement ......................................................................................................................... 6 Dedication ..................................................................................................................................... 7 Resumen ........................................................................................................................................ 8 Abstract ......................................................................................................................................... 9 Introduction ................................................................................................................................. 10 Chapter 1. Economic Context in Ecuador ................................................................................... 13 1.1 Economic Policies of Ecuador .............................................................................................. 13 1.1.1 Fiscal Policy..................................................................................................................... 13 1.1.2 Trade Sector and Commercial Policies ........................................................................... 16 1.1.3 Monetary Sector of Ecuador. ......................................................................................... 18 1.2 National Plan of Good Living ................................................................................................. 22 1.2.1 Objective 8. "To sustainably consolidate the economic, social and solidarity based system”. ................................................................................................................................... 26 Graph 1. SOUTH AMERICA INTERNATIONAL ASSETS .......................................................... 28 Graph 2. INTRAREGIONAL TRADE ....................................................................................... 29 Graph 3. EVOLUTION OF IMPORTED COMPONENTS OF AGGREGATE SUPPLY OF GOODS AND SERVICE (2000-2012)................................................................................................... 30 Graph 4 STATE BUDGET 2007-2013 (ASSIGNMENTS) ......................................................... 31 Graph 5. EXPORTS OF ECUADOR: PRIMARY AND INDUSTRIAL GOODS .............................. 32 Graph 6 IMPORTS OF ECUADOR ......................................................................................... 33 1.2.2 OBJECTIVE 10 "Transformation of the Production Model"............................................ 35 Graph 7. NATIONAL PRODUCTION GROWTH SECTOR IN CONNECTION WITH THE REGION ............................................................................................................................................. 36 Graph 8. COMPOSITION OF GDP BY SECTORS .................................................................... 37 Graph 9. GDP by Economic Activities .................................................................................. 38 1.3 Transformation of the New Production Model ..................................................................... 49 Objective 1. Active participation in technology export........................................................... 52 2 Objective 2. Reduce non- oil commodity imports of raw material ......................................... 54 Objective 3. Participate actively in industry manufacturing and GDP .................................... 55 Objective 4 To enhance the participation of skilled labor in industry .................................... 55 Objective 5. Decreasing the concentration of irrigated area .................................................. 56 Objective 6. To reduce the percentage of intermediation small and medium producers .... 57 Objective 7 Reversing the trend of imports in food consumption ......................................... 58 Objective 8 Increase to 64% of tourism revenues in services exports.................................... 59 Objective 9.- To reduce to 12 days the time required to start a business ............................. 60 CHAPTER 2. .................................................................................................................................. 62 SITUATIONAL ANALYSIS OF EL ORO PROVINCE ........................................................................... 62 2.1 Socio-demographic information ........................................................................................... 62 2.1.1. Characteristics of Population .................................................................................... 63 2.1.2 Economic Activities .................................................................................................... 64 2.1.3 Category work of El Oro ............................................................................................. 64 2.1.4 Level of Instruction ..................................................................................................... 66 2.1.5 Illiteracy in El Oro ....................................................................................................... 66 2.1.6 Housing Characteristics .............................................................................................. 67 2.1.7 Access to Technology ................................................................................................. 67 2.1.8 Type of Houses ........................................................................................................... 68 2.1.9 Access to basic services .............................................................................................. 69 2.1.10 ADITIONAL DATA ...................................................................................................... 70 2.2.1 Gross Domestic Product in El Oro .............................................................................. 71 2.2.2 Agricultural Sector ...................................................................................................... 72 Permanent crops in the province ......................................................................................... 74 2.2.3 Manufacturing Sector Activities ................................................................................. 76 2.2.4 Productive Activities in Sector Service ....................................................................... 78 2.2.5 Standard of living in the province .............................................................................. 79 2.2.4 Institutional Status of El Oro ...................................................................................... 81 3 2.2.5 Private Institutions of El Oro ...................................................................................... 83 2.2.6 Economy in the cities ................................................................................................. 84 2.3Potential Business in El Oro ............................................................................................... 86 2.3.2 Business of Agroindustry to domestic consumption and export ............................... 91 2.3.3 Agricultural Business for Export ................................................................................. 94 2.3.4 Banana Potential Business ......................................................................................... 96 2.3.5 Stake holders responsible for Productivity ................................................................ 99 2.3.6 Institutional Conventions ......................................................................................... 100 Chapter 3 Strategies for the development of better exportable supply .................................. 101 3.1 Productive Strategies ...................................................................................................... 101 3.1.1 Clusters ..................................................................................................................... 101 3.1.2 The local productive system ..................................................................................... 105 3.2 International Network of Cities ....................................................................................... 110 3.3 Experiences from other countries ................................................................................... 112 Chapter 4 Proposals .................................................................................................................. 117 4.1 Association and Value Chain in El Oro ............................................................................ 117 4.1.1 Benefits of Association and Value Chains ................................................................ 117 4.1.2. Value Chains scheme in El Oro province ................................................................. 119 4.1.3 Association and Value Chain in El Oro ..................................................................... 120 4.2 Production Development Public Enterprise ...................................................................