Mining gives a break to foreign investment

Ecuadornews:

If it were not for mining, Foreign Direct Investment (FDI) would have ended the semester with numbers in red. The official figures show that of the 529.9 million dollars that Ecuador managed to receive in the first half of the year, 273.9 million arrived in this sector, thus compensating for the lower resources that have received other productive items.

The figures of the Central Bank of Ecuador published this week indicate that the contribution of mining made the investment grow by 42%, compared to the January-June period of last year. The arrival of these resources to this type of niches, explains Roberto Aspiazu, director of the Ecuadorian Business Committee (CEE), responds to a historical trend that continues in the region, to redirect investment to primary sectors of the economy; and for Ecuador, which in recent years has been designing and executing a plan to exploit mining, is no exception.

However, this arrival of fresh resources does not convince certain economic analysts, who believe that if the trend that was the previous year is replicated in the second half of this year, the investment would not reach $ 800 million, “a This figure is quite low compared to other nations in the region, “says Xavier Orellana, former Vice Minister of Foreign Trade. The expert talks about the pending that the country still has to attract more resources in sectors that, unlike mining, could generate more production and income. “The mining sector is like the oil industry: it basically feeds the state economy. It is not the same as a foreign firm to set up a balanced industry, which will benefit an entire export chain.”

According to the Central Bank, sectors such as agriculture, manufacturing and trade this year recorded a drop in the receipt of resources, by 42%, 48% and 62% respectively.

Aspiazu insists that insufficient legal security is one of the main obstacles that the country still has so that more sectors can attract foreign currency. Cite, for example, the case of the judgment against the mining company Río Blanco, which stopped its construction and exploration activities in the province of Azuay last June, due to a legal misinterpretation, which today is making it impossible for more money enter this sector. Or the illegal embargoes that certain municipalities of the country are executing against some companies, due to the alleged non-payment of taxes. So far, he says, it has been illegally charged between $ 75 and $ 80 million (90% corresponds to transnationals).

The market

By continent

Of the 529 million dollars of investment, 326 million came from the American continent, standing out the contribution of Canada and Venezuela, with 91.8 million and 67.8 million respectively. It is followed by Europe, with $ 177 million.

By sectors

The first half of this year was not as positive for sectors such as agriculture, commerce and manufacturing. The construction sector recorded a recovery of 17%. The transport and services rendered sector had better performance.

This year

These results are not yet reflected new investments as announced by the Mexican Femsa, which acquired the Corporation GPF (Farcomed), owner of Fybeca, SanaSana, Okidoki (minimárket). (I)

Source: https://www.expreso.ec/economia/sector-minero-inversion-extranjera-economia-YA2442247