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The fronts a dollarized country fights with
Posted On 18 Aug 2017
Ecuadornews:
The favorite topic of conversation of entrepreneurs is dollarization. They are concerned about rising production costs, low domestic prices, rising imports, economic growth (GDP) below the population growth.
The Government, entangled in a web of problems by the decrease in public revenues, massive debt, and few possibilities to revive the economy, has not gazed at the high costs of production, partly due to institutionalized corruption, according to experts.
“Postwar is worse than war,” says industrialist Askley Delgado. He speaks metaphorically. He means that high costs of services are partly due to “the corruption of the previous government.” Energy costs “will be expensive because hydropower plants had disproportionate execution costs.”
“Ecuador sells the kilowatt hour to 6 cents to Colombia, and here it costs almost 10. The diesel for the industry costs $ 1.40 and the bunker fuel $ 1.02.”
The kilowatt hour is 30% higher than that of the US, and a glass container of Cridesa costs more than in neighboring countries, reveals a company that has seriously considered packing its products abroad, to import them later. Some companies are importing soluble coffee from Colombia.
“Many companies are struggling with production costs that are higher than selling prices,” says Larry Yumibanda, president of the Guayas Association of Economists. Based on the statistics of the National Institute of Statistics and Censuses (INEC), he unravels two consecutive months of negative inflation and six in the last 13 months. (I)
Source: http://www.expreso.ec/
