The Business Year

Ramiro Crespo & Eduardo Checa

ECUADOR - Finance

One in a Hundred

Partner and Principal/Partner, Analytica


Ramiro Crespo graduated with a Master’s degree in Economic Development from Georgetown University. He is currently Partner and Principal at Analytica. Eduardo Checa joined Analytica after working as Vice-President of Corporate Finance at ING Bank Ecuador for nine years. He is currently a Partner.

"We, as a country, have to tell investors that we are going to be issuing debt responsibly this time around."

How would you evaluate Ecuador’s investment outlook?

EDUARDO CHECA Ecuador, right after Peru, is the country that is forecasted to grow the most in the coming year. In order to make our future sustainable and look at investment in the long term, reducing the level of poverty is key. To do this, we have to be able to attract foreign investment. Other countries in the region, such as Colombia, Peru, Chile, and Brazil, have a base of economic growth that has been established as a result of FDI.

The World Bank expects Latin America to grow by almost 4%. What are the main consequences of this and how do you foresee the local economy developing in comparison?

RAMIRO CRESPO Expansion has been government-promoted thus far, with significant expenditure because of the high price of oil and loans from China. We have to convince the private sector to invest more in Ecuador and prepare in case the price of oil goes down. This means diversifying our exports and sources of income. There are pending issues such as possible free trade agreements (FTAs) with the US and Europe and the promotion of FDI. It is interesting that four out of five of the largest insurance companies in Ecuador are multinationals. People would not expect that to be the case, but currently the insurance sector is populated by companies from Australia, the US, Spain, and a few other countries. We need more FDI that creates new businesses, such as in the mining, agricultural, and service sectors.

“We, as a country, have to tell investors that we are going to be issuing debt responsibly this time around.”

EDUARDO CHECA There has been huge growth and consumption, but I believe that we are relying too much on oil. The more we can diversify the components of our means of growth, the more diversified sectors of growth we will see in the economy. We cannot just depend on oil, and the country has a huge potential in agriculture as the biggest exporter of bananas in the world, and a world-class producer of flowers, asparagus, cacao, and coffee. Rose growers in Ecuador depend heavily on markets in the US and Europe. A considerable percentage of the population works in agriculture and the flower business, and we have to develop the tools to be competitive worldwide and to improve their standards of living. The FTAs are the challenge the government faces, because if we don’t have those tools, it will limit our growth.

What would you say is Analytica’s most significant success story?

RAMIRO CRESPO We were named among the top 100 companies in the world in 2010, not only in finance, but also across the board. Even though Ecuador is not on the radar of many foreign investors or investment banks, there are still very good opportunities. We have been able to do our research and focus on our transactions, which led to the company’s accolades. There were many investors and hedge funds that voted, so they were familiar with our work because of our international reach. Many of them received our research, which is one of the reasons we were chosen among the best companies in the world, and were familiar with specific deals and our sophisticated structure.

EDUARDO CHECA We are also one of the main players in the local exchanges here, especially in terms of issuing debt and trading. We are carrying out a lot of M&A activity, which was noticed by the foreign investors who voted for us. When we were named among the top 100 companies back in 2010, there were only seven Latin American companies chosen.

What do you do to promote foreign investment?

RAMIRO CRESPO The Ecuadorean insurance market has grown from $600 million to $1.2 billion in the last five years, so we emphasize that this is a growing market. We are also looking for foreign investors who might be overlooking Ecuador and describing to them the ways in which it could be worth their while. The country is growing because it is an oil exporter and the price of oil is high and the government is spending much more. However, to maintain this rate of growth, we need more resources. Foreign investment is one option, whereas another is going back to the international market. The need to maintain the rate of growth might be one of the triggers for policies that will attract more foreign investment. Ecuador is working to return to the international capital markets and is trying to improve its credit rating. For this reason, Ecuador welcomes credit-rating agencies. We don’t want to rely only on oil, one foreign investor such as China, or taxes. We need a plethora of new sources.

How do you convince the skeptical investor about the financial security of the country?

EDUARDO CHECA We, as a country, have to tell investors that we are going to be issuing debt responsibly this time around. We have to convince investors that Ecuador can be like Colombia or Chile in terms of fulfilling international obligations. Another important element to point out is that we are dollarized, and therefore we don’t have a currency risk. It gives us a lot of economic and political stability.

RAMIRO CRESPO It depends on the industry, but in general I argue for the benefits of dollarization, which gave us stability. That is a base to work from, and dollarization also gave us a longer horizon on which to work. The economy is becoming more open. Ecuador is a small country, but we are very rich in natural resources. Not much has to happen for Ecuador to have an additional significant boom in the economy.

Do high taxes block private investment?

EDUARDO CHECA Yes. The more restraints the government puts on investment, the more the situation drives away investors. This is something the government has to work on, and it is being evaluated.

RAMIRO CRESPO In addition, the support of local communities is crucial. The authorities are often skeptical about allowing mining or oil exploration on their land, because historically they haven’t benefited from it. They haven’t received royalties that could have compensated for whatever environmental and social damage they have suffered. Right now, they are requesting and requiring a clear system or design in which they will also benefit directly from the investment itself and not through government expenditure. One of the ways to attract local communities is by including them in the investment process and ensuring that the ecology is damaged a little as possible. They have to be part of the investment in order to help promote what is being done. If we can help them feel like the owners of foreign investment projects, it is always easier to attract foreign investment. In addition, foreign investors would feel safer because the local communities are cooperating.

Which sectors would you highlight as key to the development of Ecuador?

EDUARDO CHECA Mining, oil, and agriculture. We still need investment in oil, and it may be more attractive for foreign investors. Meanwhile, Ecuador is the largest banana exporter in the world, and we are an excellent source for other types of crops, such as cocoa. Flowers are also important, as is fishing. For long-term investments, agriculture is very important because food is a necessity and nothing is as affordable as it was 20 years ago.

RAMIRO CRESPO Tourism is also very important for Ecuador. The climate is good for tourists and Ecuadoreans are very friendly. The country is safer than we think, but there is still room for improvement. Real estate here is very affordable in comparison to other countries. The communications infrastructure is also getting better, as we now have widespread access to the internet and other web services. Health services are getting better and better. Many factors are making Ecuador the top international retiree destination. There are interesting things happening in the country, and sometimes people don’t realize it because they think of the political problems the country has experienced. We should work to make the private sector play a larger role and thus promote the country as a safe and enjoyable destination.

© The Business Year – March 2013



You may also be interested in...

Flor Maria Gaona, General Manager, Responsible Travel

ECUADOR - Tourism

Flor Maria Gaona


General Manager, Responsible Travel


ECUADOR - Transport

Frederik Jacobsen


President, Equair


ECUADOR - Finance

Guillermo Avellán Solines


General Manager, Central Bank of Ecuador

View All interviews