Never the darling of foreign investors, particularly when compared with some of its Latin American neighbours, Ecuador experienced heavy dips in FDI inflows when president Rafael Correa took office in 2007.

However, supporters of Mr Correa would claim that this had as much to do with the unravelling global financial crisis as it did the president's popularity or his policies. They would also point to the fact that since 2011 the rate of investments into Ecuador has been increasing and the country is enjoying some of the highest FDI inflows since fDi Markets started tracking crossborder investment in 2003.


Mr Correa, accused by his critics of being a 'populist president' and a 'bully', among other things, has not changed his outspoken ways; targets of his public lambasting in 2013 alone included oil giant Chevron, magazine The Economist, Germany and ‘gender ideology’. So what has changed?

Burgeoning middle class

Francisco Rivadeneira, the country's minister of foreign trade, says: “Since President Correa came to office, more than 1.5 million people have reached middle class status. This makes the country increasingly interesting for companies offering services and goods, especially within the food sector.”

On top of this, in June 2013, Ecuador’s Congress eased terms for investors wanting to tap into the country's abundant and largely untouched mining riches. “We have enormous potential for mining and we want Ecuador to become a mining country,” says Mr Rivadeneira.

The new law, which delays windfall tax and sets royalty minimums, should help to avoid situations such as when Canadian mining company Kinross Gold cancelled its $1.2bn project in Ecuador due to a tax dispute in June 2013.

Trade partners

As the country patches up its relations with foreign investors, it is also developing links with trade partners. “Right now, our priority is to close the trade agreement deal with the EU,” says Mr Rivadeneira, adding that talks with the EU should be finalised by July. “Once we close the deal with the EU, we plan to start negotiations with Canada, the European Free Trade Association and then with South Korea,” he adds.

Ecuador also wants to increase co-operation with other Latin American countries. Last year the country expressed its desire to join Mercosur, a trade and political agreement that includes Argentina, Brazil, Paraguay, Uruguay and Venezuela, and gained observer status in the Pacific Alliance, a trade bloc between Colombia, Peru, Mexico and Chile. Ecuador is also currently working to expand its trade agreement with Mexico. Mr Rivadeneira expects to conclude bilateral talks with Mexico by July.

These developments can undoubtedly be seen as positive. In addition, data from the Economist Intelligence Unit shows private consumption and exports in Ecuador are expected to rise, as is the country’s GDP.

“If you look at Ecuador now, it has nothing to do with the country it was seven years ago [before Mr Correa became the country's president]. We have a stable economy with big potential for investments,” says Antonio Ruales, director of ProEcuador, the country's investment promotion agency.

“Look at our economic indicators. Let them tell our story,” adds Mr Ruales.