1. Export Promotion Estrategy 2014 Regional Workshop in Latin America and The Caribean June - 2014 Export-oriented SMEs Development

2. Contents I. Understanding Ecuadorian framework II. A short view of KSP recommendations III. The Ecuadorian Agenda IV. Conclusions 2

3. Understanding Ecuadorian framework 3

4. I. Understanding Ecuadorian framework ▶ 18% primary (including oil). ▶ 13% Industry (including refinery). ▶ 65% services (including trading services -50%-). ▶ The economic structure has not changed substantially. 4

5. I. Understanding Ecuadorian framework ▶ Ecuador's economy depends on speculative and volatile international market conditions. ▶ A dollarized economy also depends on net foreign currency entrance. 5

6. I. Understanding Ecuadorian framework ▶ It is important to develop production of goods and services in the areas of higher demand and greater innovation and knowledge to improve productivity and development conditions. 6

7. I. Ecuadorian framework for export promotion ▶ In conclusion: ▷ The challenges in export promotion are related with macroeconomic stability. ▷ A dollarized economy also depends on net foreign currency entrance. ▷ Our exports grow less rapidly than the growth of world demand. ▷ Our imports grow faster than the growth of domestic demand. ▷ Doing different and better: added value, innovation are the keys for a sustainable production. 7

8. A short view of KSP recommendations 8

9. II. A short view of KSP recommendations ▶ Recommendations: Prioritizing Strategic Sectors ▷ Short-term perspective. ▶ Fresh and processed foods. ▶ Grain mill products. ▶ Animal/vegetable oils & fats. ▶ Dairy products and other food products. ▶ Apparel & footwear and wood products. ▷ Mid-term export promotion. ▶ Metal products. ▶ Tanks & containers of metal. ▶ Basic iron and steel and other general purpose machinery. ▶ Promoting petro-chemical (especially plastic & synthetic rubber) and bio-chemicals (fertilizers & nitrogen compounds, and soap, cleaning & cosmetic preparations). ▷ Long-run, developing. ▶ sectors of relatively high technology contents, including technology (hardware). ▶ Motors and bio-medicine. 9

10. II. A short view of KSP recommendations ▶ Recommendations ▷ A. Framework for Industrial and Trade Policies: specific incentive measures and assistance programs need to be reviewed on a regular basis to monitor their effectiveness in achieving the policy objectives. ▷ B. Priority Sectors for Industrial and Trade Policies: Selection of priority sectors reflects resource constraint faced by Ecuador. ▶ B-1. Two Sets of Priority Sectors: Code and Agenda. ▶ B-2. Classification of Priority Sectors: Import substitution or export promotion? ▶ B-3. Development Plans for Each Priority Sector: concrete and result- oriented roadmap tailored to each sector (goals, resource mobilization, supportive measures…). 10

11. II. A short view of KSP recommendations ▶ Recommendations ▷ C. The Sectoral Council for Production and the COMEX: SENPLADES must be involved in the stage of formulation of the policies concerned. ▷ D. Private Investment: devise other ways and means to mobilize and channel domestic savings to the priority sectors. ▷ E. Tariff rates and the Policy Objectives: review tariffs in conformity with the policy objective for the product. ▷ F. Export Financing and Insurance: public banks might consider offering export financing services of the latter type, especially for priority sectors and the MSMEs with preferential conditions. ▷ G. Measures Supporting MSMEs: need to be focused on, and consistently applied to, the MSMEs that prove to have desirable performances (for example, performance-based renewal and increase of financial supports). 11

12. The ecuadorian agenda I. National Plan for Good Living 2013-2017 II. Interinstitutional Committee for change of the productive matrix III. Strategy to Transform the Productive Structure 12

13. III. The Ecuadorian Agenda ▶ National Plan for Good Living 2013-2017. ▷ Released on September, 2013 (With the approval of the National Planning Council). ▷ Objectives organization: 1. Change in power relationships in order to construct the people’s power. 2. Rights, liberties and capacities for Good Living. 3. Economic and productive transformation based on changing the productive structure. ▷ We will focus on the third block. 13

14. III. The Ecuadorian Agenda ▶ National Plan for Good Living 2013-2017. ▶ SMEs include Popular sector. ▷ Main lines related to develop SMEs export oriented. ▶ Objective 8: To consolidate the social and solidary economic system, sustainably. ▷ To promote the technical and specialized training for the popular sector. ▷ To set the popular sector preferential terms of access to financing and ease interest rates to enterprises and / or expanding their existing production. ▷ To create an information system considering the popular sector production and exports. ▶ Objective 9: To guarantee dignified work in all forms. ▷ To support the development of youth entrepreneurship in areas of funding, training, technology transfer and business management. ▷ To implement projects from incubators, linked to national priorities to promote a culture of entrepreneurship. 14

15. III. The Ecuadorian Agenda ▶ National Plan for Good Living 2013-2017 (PNBV13-17). ▷ Main lines related to develop SMEs export oriented. ▶ Objective 10: To promote transformation of the productive structure. ▷ To establish mechanisms to incorporate MSMEs in production chains of the priority sectors. ▷ To simplify the formalities for MSMEs productive enterprises. ▷ To increase, improve, and diversify exports of goods and services, with the addition of new actors, especially MSMEs and the popular sector. ▷ To promote productive transformation, Ecuadorian job, disaggregation and technology transfer, and avoid unfair competition in trade agreements and investment protection negotiations. 15

16. III. The Ecuadorian Agenda ▷ Interinstitutional Committee for change of the productive matrix. ▶ Vice-presidency (on charge). ▶ Members: ▷ National Secretary of Planning and Development (SENPLADES). ▷ Coordinating Ministry of Production, Employment, and Competitiveness (MCPEC). ▷ Coordinating Ministry of Strategic Sectors (MICSE). ▷ Coordinating Ministry of Knowledge and Human Talent (MCCTH). ▷ Coordinating Ministry of Economic Policy (MCPE). ▷ Coordinating Ministry of Social Development (MCDS). ▷ National Secretary of Higher Education, Science and Technology (SENESCYT). 16

17. III. The Ecuadorian Agenda ▷ Interinstitutional Committee for change of the productive matrix. ▶ Main tasks: ▷ To adopt and operationalize the Strategy to Transform the Productive Structure (under construction). ▷ To develop and articulate policies, plans, programs and projects based on the strategy. ▷ Report to the National Planning Council, progress and fulfillment of the objectives of the strategy. 17

18. III. The Ecuadorian Agenda ▶ Strategy to Transform the Productive Structure (under construction). ▷ Objectives related with export promotion: ▶ Increase and diversify exports. ▶ Diversify production and markets. ▶ Increase intensive production in innovation, technology, and knowledge. ▶ Increase value and incorporate the Ecuadorian component in production. 18

19. III. The Ecuadorian Agenda ▶ Strategy to Transform the Productive Structure (under construction) ▶ Sectoral policies: selected chains: ▷ Primary sector, based on natural resources. ▶ Processed coffee, cocoa, fish and dairy products. ▷ Industrial goods. ▶ Petroleum. ▶ Metalworking. ▶ Chemicals and pharmaceutical. ▶ Paper and cardboard. ▶ Plastic and rubber. ▷ Services. ▶ Knowledge and technology. ▶ Tour Operators. ▶ Logistics. 19

20. III. The Ecuadorian Agenda ▶ Strategy to Transform the Productive Structure (under construction). ▷ Economic policies and productive incentives: ▶ Financial facilities for foreign trade: letters of credit and other (from US$ 50.000). ▶ Reducing formalities: three days for an export authorization. ▶ Incentives and private investment: venture capital fund public-private up to US$ 135 million. ▶ Foreign Trade: Commercial management to reduce non-tariff barriers in export markets. ▶ Development and promotion of exportable services sector: tourism, software and other professional services. ▷ Human talent and innovation: ▶ To reform Technical Technical Training Institutes for productive transformation. ▶ To promote culture of innovative entrepreneurship 20

21. Conclusions 21

22. IV. Conclusions ▶ The develop of SMEs export oriented are encouraged from National Planning under Economic and productive transformation based on changing the productive structure block. ▶ The Strategy to Transform the Productive Structure is under construction (finished by the end of June, 2014). ▶ Ministries and private sector are now working with the main guidelines of the National Planning (PNBV13-17), and in specific guidelines of the Interinstitutional Committee. ▶ The first steps are given in strengthen the national industry (import substitution). 22