ADMN296 International Business Assignment1 Influence of Globalization-Ecuador Submitted To: SubmittedBy:Danny Hu PrathamGarg 196791 IntroductionAfter analyzing5 countries I have selected to go ahead with Ecuador. It has greatopportunities for business as well as some people plan there retirement to behere. Prices and costs are moving up andshould continue to appreciate for the next several years. Inflation seems to beunder control and most economic indicators are positive.
There is a good laborpool available in Ecuador, which makes investing in Ecuador particularlyattractive. Minimum compensation levels are set by the government according tothe job and industry and can be adjusted by them. The minimum compensationpackage is about $366 a month, and Ecuador has a wealth of good private sectorpartners available. Ecuador’s free-trade zones you can import raw materials andmachinery duty free and then export finished or semi-processed goods withoutpaying any taxes. Businesses that occupy the free-trade zones have norestrictions on the repatriation of their profits, and they benefit fromrelaxed labor laws that allow them to hire workers on a temporary basis withoutsupplying a yearlong contract. All this boils down to a favorable environmentto invest in Ecuador.
Currency of the nation is us dollar so it becomes moreeasy for the business to do payments as various countries all over the worlduse us dollar. Ecuador is the world’s leading exporter of bananas and a worldleader in rose production, significant opportunities exist in import marketsfor some agricultural goods. Among the entire range of the country’sprofitable sectors, only four sectors were chosen by virtue of their economicattractiveness on a curve of supply and demand relative to FDI. These sectorsare:Agribusiness and forestryTourismReal EstateFishing and aquacultureGeographyEcuador is a country in western South America, bordering the PacificOcean at the Equator, for which the country is named. Ecuador encompasses a wide rangeof natural formations and climates, from the desert-like southern coast to thesnow capped peaks of the Andes mountain range to the plains of the AmazonBasin.CulturesEcuador’s official language is Spanish, but the Indian population speaksQuichua – an Incan language -.
Besides Spanish, ten native languages are spokenin Ecuador. English is the most spoken foreign language amongst tourism service providers and professionals.Ecuador today are famous fortheir marimba music. The Ecuadorians have a distinctive type of dress code. Ecuador has some very tasty and verystrange combinations in their cuisine.
You canexpect to find some lemon marinated shrimps, toasted corn on the cob and a hugevariety of pastries filled with all types of different stuffing. Government systemsEcuador’s political situationtoday is deeply rooted in the country’s rowdy history. The Republic ofEcuador’s political system is a representative democracy. The Government isdivided into three branches: executive, legislative, and judicial. There is alsoan autonomous electoral agency called the Tribunal Supremo Electoral. Ecuadoris separated into 24 provinces each of which is further divided intoadministrative cantones and parroquias.
In 2008, President Rafael Correa dissolvedthe Congress and convened a special constitutional assembly, which wrote a newEcuadorian Constitution. The proposed constitution went to referendum inSeptember of 2008, and was approved by a wide margin.GDP / GNP / Export / ImportGDP -5,968.98 USD (2016)GNP -181.4 billion PPP dollars (2016)Export and ImportOverallExports and Imports for Ecuador 2016. The total value of exports (FOB) is US$16,798 million. The total value of imports (CIF) is US$ 16,189 million. At theHS6 digit level, 2,412 products are exported to 162 countries and 3,970products are imported from183 countries.
BusinesspartnersEcuador’smain export commodities are petroleum, bananas, cutflowers and shrimps. Its main export partners are the United States, Panama,Peru and Italy. Its main import commodities are vehicles, medicinal products,telecommunications equipment and electricity. The main import partners are theUnited States, Columbia, China, Venezuela, Brazil, Chile, Japan and Mexico. Positive’s and negative’s of globalisation in EcuadorEcuador isalso known to export other products such as bananas, seafood such as shrimp andpre-cut flowers. With four free trading zones within Ecuador and one hundredand fifty zones in the United States, Ecuador has become the U.S.
main exportpartner; other countries, which also share a global interdependence fromEcuador, are Columbia, Brazil, Japan, Mexico, China and Venezuela. However,there are many ways globalization has had a negative effect on the country.Globalization has affected countries trade, travel, business and people largercompanies are setting up their businesses in Ecuador and are pushing outsmaller corporations or family owned businesses. The large cooperation is knownto offer lower retail prices because they are able to produce their productionsat a lower price. Instead of creating interdependence within Ecuador and itspeople, this type of globalization, or greed as I view it, can possibly be tiedin with the high poverty rates in Ecuador mentioned under the political andeconomic system tab. BusinessAccordingto my research on Ecuador, so far I will like to set up a Hotel. As tourism isthe main sector for income in Ecuador.
This would be a great opportunity forme. People from all over the world like to visit such countries. In addition,as we know the purchases power of the nation is increasing so it can be veryhelpful for such kind of business. A hotel, which would be associated with arenowned group that will help to attract potential loyal customers. Tourism isonly going to increase in future. As many families plan there, vacation andcompanies setup their annual meeting sometimes at such location. Tourism growthis so high here due to climate, local attractions and beautiful beaches. Labourcost is low and tourist are ready to pay high in peak, seasons so which willresult in higher profits.
As far as competition is concerned, it always boostsup the sales revenue as consumer go with the best and everyone needs to improveto stay in the market. There are several other reasons why to invest in thiskind of business.ReferencesOpportunities for investments in Ecuador.(2015). Retrieved from https://internationalliving.
com/countries/ecuador/invest/Unlockthe Treasures of Ecuadorian Culture. (1995). Retrieved from http://www.ecuador.com/culture/Ecuador Government Overview & History. (1997).
Retrieved from http://www.ecuadorexplorer.com/html/government_and_economy.htmlEcuador Trade ata Glance: Most Recent Values. (2016). Retrieved from https://wits.worldbank.
org/CountrySnapshot/en/ECU/textviewGlobalisationin Ecuador. (2013, June 11). Retrieved from http://egonzaecuador.weebly.com/blog/globalization-in-ecuador