2: Country/Economy Profiles

Ecuador Key indicators, 2014

GDP (PPP) per capita (int’l $), 1990–2014

Population (millions) ........................................ 16.0 GDP (US$ billions) ........................................ 100.8 GDP per capita (US$) ................................... 6,286 GDP (PPP) as share (%) of world total ............ 0.17

Ecuador

20,000

Latin America and the Caribbean

15,000 10,000 5,000 0

Global Competitiveness Index Rank (out of 140)

Score (1–7)

Institutions 7

Innovation

GCI 2015–2016 ...................................................... 76 ..... 4.1 GCI 2014–2015 (out of 144) .................................... n/a ......n/a GCI 2013–2014 (out of 148) ..................................... 71 ......4.2 GCI 2012–2013 (out of 144) ..................................... 86 ......3.9

Infrastructure

6 5

Business sophistication

Macroeconomic environment

4 3 2

Basic requirements (40.0%) .......................................71 ......4.5

Market size

1st pillar: Institutions ............................................... 105 ......3.4 2nd pillar: Infrastructure ............................................ 67 ......4.1 3rd pillar: Macroeconomic environment .................... 75 ......4.7 4th pillar: Health and primary education ................... 59 ......5.9

Health and primary education

1

Higher education and training

Technological readiness Financial market development

Efficiency enhancers (50.0%) .....................................86 ......3.8

Goods market efficiency Labor market efficiency

5th pillar: Higher education and training ................... 67 ......4.3 6th pillar: Goods market efficiency .......................... 126 ......3.8 7th pillar: Labor market efficiency ........................... 112 ......3.8 8th pillar: Financial market development ................... 92 ......3.5 9th pillar: Technological readiness ............................ 83 ......3.5 10th pillar: Market size.............................................. 63 ......4.0

Ecuador

Latin America and the Caribbean

Stage of development

Innovation and sophistication factors (10.0%) ...........87 ......3.4 11th pillar: Business sophistication .......................... 87 ......3.7 12th pillar: Innovation ............................................... 86 ......3.2

1

Transition 1–2

Factor driven

2

Transition 2–3

3

Efficiency driven

Innovation driven

The most problematic factors for doing business Score*

Restrictive labor regulations ...............................................14.5 Tax rates............................................................................13.7 Complexity of tax regulations.............................................12.2 Inefficient government bureaucracy ...................................11.1 Access to financing .............................................................8.7 Corruption ...........................................................................8.6 Inadequately educated workforce ........................................7.1 Policy instability ...................................................................5.2 Foreign currency regulations ................................................4.4 Poor work ethic in labor force..............................................3.5 Insufficient capacity to innovate ...........................................3.3 Inadequate supply of infrastructure ......................................2.4 Crime and theft ...................................................................1.8 Government instability/coups ..............................................1.4 Inflation ................................................................................1.3 Poor public health ...............................................................0.8 0 *

5

10

15

20

25

From the list of factors, respondents were asked to select the five most problematic for doing business in their country and to rank them between 1 (most problematic) and 5. The score corresponds to the responses weighted according to their rankings.

158 | The Global Competitiveness Report 2015–2016

© 2015 World Economic Forum

30

2: Country/Economy Profiles

Ecuador The Global Competitiveness Index in detail INDICATOR

VALUE RANK/140

INDICATOR

1st pillar: Institutions

VALUE RANK/140

6th pillar: Goods market efficiency (cont’d.)

1.01 1.02 1.03 1.04 1.05 1.06 1.07 1.08 1.09 1.10 1.11 1.12 1.13 1.14 1.15 1.16 1.17 1.18 1.19 1.20 1.21

Property rights ....................................................... 3.9 ............93 Intellectual property protection ............................... 3.8 ............77 Diversion of public funds ........................................ 2.7 ..........109 Public trust in politicians ......................................... 2.0 ..........123 Irregular payments and bribes ................................ 3.9 ............68 Judicial independence............................................ 2.1 ..........133 Favoritism in decisions of government officials ....... 2.3 ..........119 Wastefulness of government spending ................... 3.6 ............42 Burden of government regulation ........................... 2.2 ..........134 Efficiency of legal framework in settling disputes .... 3.1 ..........109 Efficiency of legal framework in challenging regs. ... 2.0 ..........139 Transparency of government policymaking............. 3.4 ..........116 Business costs of terrorism .................................... 5.6 ............53 Business costs of crime and violence..................... 3.7 ..........109 Organized crime ..................................................... 4.7 ............77 Reliability of police services .................................... 3.6 ..........100 Ethical behavior of firms ......................................... 3.4 ..........113 Strength of auditing and reporting standards ......... 5.2 ............38 Efficacy of corporate boards .................................. 5.2 ............33 Protection of minority shareholders’ interests ......... 3.7 ............96 Strength of investor protection, 0–10 (best)* .......... 4.7 ..........100

2.01 2.02 2.03 2.04 2.05 2.06 2.07 2.08 2.09

Quality of overall infrastructure ............................... 4.6 ............45 Quality of roads ...................................................... 5.2 ............25 Quality of railroad infrastructure ....................... N/Appl. ...........n/a Quality of port infrastructure ................................... 4.8 ............40 Quality of air transport infrastructure....................... 5.0 ............42 Available airline seat km/week, millions* ............. 164.0 ............70 Quality of electricity supply ..................................... 4.6 ............77 Mobile telephone subscriptions/100 pop.* ......... 103.9 ............90 Fixed-telephone lines/100 pop.* ........................... 15.3 ............69

3.01 3.02 3.03 3.04 3.05

Government budget balance, % GDP*................. –5.2 ..........111 Gross national savings, % GDP* .......................... 27.2 ............32 Inflation, annual % change* .................................... 3.6 ............73 General government debt, % GDP* ..................... 29.8 ............32 Country credit rating, 0–100 (best)* ...................... 28.5 ..........110

4.01 4.02 4.03 4.04 4.05 4.06 4.07 4.08 4.09 4.10

Malaria cases/100,000 pop.* ................................. 4.1 ............19 Business impact of malaria .................................... 5.2 ............29 Tuberculosis cases/100,000 pop.* ....................... 56.0 ............73 Business impact of tuberculosis ............................. 5.1 ............89 HIV prevalence, % adult pop.* ............................... 0.4 ............74 Business impact of HIV/AIDS ................................. 4.8 ............95 Infant mortality, deaths/1,000 live births* .............. 19.1 ............87 Life expectancy, years*......................................... 76.5 ............46 Quality of primary education ................................... 3.8 ............78 Primary education enrollment, net %* .................. 97.0 ............40

5.01 5.02 5.03 5.04 5.05 5.06 5.07 5.08

Secondary education enrollment, gross %* ........ 103.3 ............23 Tertiary education enrollment, gross %*................ 40.5 ............67 Quality of the education system ............................. 3.6 ............71 Quality of math and science education .................. 3.8 ............85 Quality of management schools ............................. 4.3 ............65 Internet access in schools ...................................... 4.1 ............76 Availability of specialized training services .............. 4.1 ............75 Extent of staff training ............................................ 3.7 ............94

2nd pillar: Infrastructure

6.06 6.07 6.08 6.09 6.10 6.11 6.12 6.13 6.14 6.15 6.16

No. procedures to start a business* ........................ 13 ..........134 No. days to start a business* ............................... 55.5 ..........130 Agricultural policy costs.......................................... 3.4 ..........108 Prevalence of non-tariff barriers .............................. 3.0 ..........140 Trade tariffs, % duty* .............................................. 9.7 ..........102 Prevalence of foreign ownership............................. 3.5 ..........119 Business impact of rules on FDI ............................. 3.2 ..........133 Burden of customs procedures .............................. 3.9 ............74 Imports as a percentage of GDP* ........................ 30.9 ..........111 Degree of customer orientation .............................. 4.4 ............81 Buyer sophistication ............................................... 3.1 ............98

7.01 7.02 7.03 7.04 7.05 7.06 7.07 7.08 7.09 7.10

Cooperation in labor-employer relations ................. 4.5 ............56 Flexibility of wage determination ............................. 5.3 ............44 Hiring and firing practices ....................................... 2.5 ..........134 Redundancy costs, weeks of salary* .................... 31.8 ..........128 Effect of taxation on incentives to work .................. 3.8 ............63 Pay and productivity............................................... 4.1 ............64 Reliance on professional management ................... 3.9 ............88 Country capacity to retain talent............................. 3.5 ............72 Country capacity to attract talent ........................... 3.4 ............69 Women in labor force, ratio to men* ..................... 0.68 ............99

8.01 8.02 8.03 8.04 8.05 8.06 8.07 8.08

Availability of financial services ............................... 4.2 ............84 Affordability of financial services ............................. 4.0 ............80 Financing through local equity market .................... 3.4 ............77 Ease of access to loans ......................................... 3.4 ............33 Venture capital availability ....................................... 2.3 ..........105 Soundness of banks .............................................. 5.1 ............58 Regulation of securities exchanges ........................ 4.2 ............66 Legal rights index, 0–12 (best)* ................................. 1 ..........129

9.01 9.02 9.03 9.04 9.05 9.06 9.07

Availability of latest technologies ............................ 4.5 ............80 Firm-level technology absorption ............................ 4.5 ............76 FDI and technology transfer ................................... 3.7 ..........120 Individuals using Internet, %* ............................... 43.0 ............82 Fixed-broadband Internet subscriptions/100 pop.* .. 7.8 ............76 Int’l Internet bandwidth, kb/s per user* ................ 48.3 ............53 Mobile-broadband subscriptions/100 pop.* ......... 30.9 ............86

10.01 10.02 10.03 10.04

Domestic market size index, 1–7 (best)*................. 3.8 ............63 Foreign market size index, 1–7 (best)* .................... 4.5 ............69 GDP (PPP$ billions)* .......................................... 180.2 ............62 Exports as a percentage of GDP* ........................ 27.7 ..........106

11.01 11.02 11.03 11.04 11.05 11.06 11.07 11.08 11.09

Local supplier quantity ........................................... 4.2 ............95 Local supplier quality.............................................. 4.0 ............89 State of cluster development.................................. 3.4 ............98 Nature of competitive advantage ............................ 3.2 ............88 Value chain breadth................................................ 3.6 ............92 Control of international distribution ......................... 3.1 ..........125 Production process sophistication.......................... 3.5 ............91 Extent of marketing ................................................ 4.5 ............48 Willingness to delegate authority ............................ 3.8 ............60

12.01 12.02 12.03 12.04 12.05 12.06 12.07

Capacity for innovation........................................... 3.9 ............69 Quality of scientific research institutions ................. 3.4 ............91 Company spending on R&D................................... 2.9 ..........104 University-industry collaboration in R&D ................. 3.9 ............47 Gov’t procurement of advanced tech products ...... 3.3 ............74 Availability of scientists and engineers .................... 3.3 ..........111 PCT patents, applications/million pop.* .................. 0.5 ............81

7th pillar: Labor market efficiency

8th pillar: Financial market development

3rd pillar: Macroeconomic environment

4th pillar: Health and primary education

5th pillar: Higher education and training

6th pillar: Goods market efficiency 6.01 6.02 6.03 6.04 6.05

Intensity of local competition .................................. 5.0 ............76 Extent of market dominance .................................. 3.0 ..........121 Effectiveness of anti-monopoly policy ..................... 3.3 ..........108 Effect of taxation on incentives to invest................. 2.6 ..........134 Total tax rate, % profits* ....................................... 33.0 ............53

9th pillar: Technological readiness

10th pillar: Market size

11th pillar: Business sophistication

12th pillar: Innovation

Notes: Values are on a 1-to-7 scale unless otherwise annotated with an asterisk (*). For further details and explanation, please refer to the section “How to Read the Country/Economy Profiles” on page 89. © 2015 World Economic Forum

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