Fostering a Dynamic and Resilient Private Sector
Ecuador has embarked on a series of reforms to support greater private sector contributions to economic development, recognizing that a dynamic and resilient private sector is necessary to break the country’s low-growth trajectory. Consolidating these initiatives and expanding their reach will support the country’s aspirations and sustainably tap its significant natural endowments for the welfare of its population.
The Country Private Sector Diagnostic (CPSD) argues that tackling some of the major obstacles facing the private sector—ensuring a stable and predictable policy environment, improving the incentives to trade and investment, levelling the playing field in terms of competition, strengthening the capacity of the financial system to support private sector-led growth, and implementing labor regulations that allow employees and firms to respond more flexibly to changing circumstances—is essential to job creation, firm performance, investment, and productivity. Addressing these bottlenecks is even more urgent in times of crisis in order to heighten the resilience of the economy to shocks. The report also investigates opportunities for diversification and growth, noting that agriculture, tourism and mining are sectors in which Ecuador’s abundant and diverse natural wealth bestow important comparative advantages. The CPSD identifies measures that can support private sector participation in each of these areas, including modernizing the legal and regulatory framework for mining, strengthening food safety standards and improving logistics services for perishable agricultural exports, and improving conservation efforts and adopting sustainability standards to enhance eco-tourism, among others.
