The papers here have been buzzing the last few weeks with the overnight draconian steps of the government to limit imports. The government is implementing import substitution-protect local industry and make every thing possible local. It doesn’t sound bad in theory. But this policy is going to have a lot of consequences-maybe higher prices, less choice, and lower quality, at least in the short run. Because of a trade deficit and zero control over monetary policy (Ecuador is on the US dollar), the country could literally run out of dollars if it doesn’t:

  • increase exports or the value of current exports
  • decrease imports
  • find dollars somewhere else

So, with oil prices declining, and oil being the main source of revenues for the government, and imports increasing in the last few years, the government has gone into crisis mode. The first signs were the ridiculous and sudden halting of imported meat and french fries for fast food companies like McDonald’s and Burger King. They did this under the pretense that they did not meet the new standards and certifications the government is now requiring for all imported goods. This standards and certifications requirements was another shotgun measure to slow imports-but they didn’t give any one any forewarning, and industry created quite a stir. No one is importing anything that can be made cheaper here and of better quality. Even many imported goods are of equal or better quality and cheaper. Just one small example, Baskin Robbins Ice Cream (imported) is $8.00 a quart. Locally made ice cream from Cyrano/Corfu, a well-known gourmet shop with presence all over Quito, is $10 a quart. So how the government believes that overnight, the country is suddenly going to start producing all the goods it needs of top quality at a competitive price (due to the new standards and certifications the govenrment is requiring) is anyone’s guess. And how they’re going to do it for the same or lower price as imported goods-well, that’s an even bigger question. The most likely outlook for the next six to twelve months is this:

  • There will be a lack of replacement parts and imported goods in many sectors. I’ve already heard of speculation because nobody’s sure just how far this is going to go.
  • Many imported foods, cosmetics, appliances, and other items will start becoming scarce due to hoarding and speculation.
  • Local goods will slow start to replace some imported items, at a higher cost and probably of lesser quality.

 

5104912 Ecuador Closing Borders Tighter Again

You expect to be able to get what you want when you want it. You go online, google around, find what you need, and order it. Or you get in your car, drive to the mall, and just buy it. You’re used to having the freedom to choose, to pay as much or as little as you can for whatever it is you need. You’re entitled to it, aren’t you? Nobody has the right to limit your choices.

The latest decree in Ecuador now limits individual importation of clothing to a total amount of $500 per year. This is the maximum you can bring in packed in your suitcase from a trip abroad, or through online ordering. And now couriers are expected to implement some kind of control system to make sure people are not violating the new customs laws.

This comes on top of a decree not long ago that limits imports of any type, by individuals, to a maximum of $400 value per shipment and a maximum of 4 kilos.

When you can’t get what you want-or maybe need for your business or personal use, it limits your opportunities. It limits your choices. It can make doing certain things more expensive, or just plain out of reach.

The motive behind this new regulation is supposedly to protect local industry and “formal” importers. Courier companies are mad because it’s going to hurt their business, and the public is mad too because it further limits the already limited choices in Ecuador.

It seems the government is going to stop at nothing to wall off the borders of Ecuador, limit trade, and reduce opportunities for people. Another disturbing sign that makes one wonder, where will it stop?

IMG 0222 768x1024 Would You Like A Shock?

Shock Chocolate Bar-As good as it sounds?

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Just came across this the other day in the super market. I wonder if it’s as good as it sounds…would anyone like a Shock?

 

DSC00789 Citrus Season Comes Again

Street Seller of Tangerines in Quito, Ecuador

Almost every day we try and buy fresh fruit. We usually stop at our local fruit seller around the corner from work-but if it’s too late in the day, she’s usually out of what we’re looking for. So instead, we opt for the second best option, though sometimes the cheaper one.

But we’re at the stop light, and the ubiquitous fruit lady or guy walking around with 10 packs of apples, pears, grapefruits, or this time of year, citrus, is just not anywhere to be seen.

We’re three, four, five cars deep in traffic, glancing in the mirror, hoping someone will appear. We’re actually hoping the light will not change from green to red.

Boom, the light turns green, and we hope we don’t have to accelerate too fast, because just as the cars start to move, damn! The fruit lady (or guy appears). She’s juggling three or four sticks in her hands, with the mesh bags hanging from them, laden down with tangerines, mangos, or other tasty fruits.

But we’re obliged to move forward and keep the traffic going-even though it wouldn’t be out of place to hold it up to finish fruit shopping in the street!

It’s that time of year again in Quito. Citrus (and mango) season are in full swing and the streets are full of sellers offering 10 tangerines, 20-25 oranges, and 10-15 limes per dollar. Street shopping and stoplight service at your car are one of the limited pleasures of driving in Quito.

And you try not to make the traffic too much worse by being one of those drivers, finishing up your purchase, after the light turns green.

 

 

 

 

 

 

DSC02685 Citrus Season Comes Again

That’s a lot of lemons to schlep around!

Photostream DSC0227220130222 Turning Automation on Its Head

I’m constantly amazed by the ability to turn automation into something manual here. Usually I welcome technology as a harbinger  of efficiency, a time-saver in many cases, something that might reduce friction a bit in a business transaction and make one’s life a little easier.

In Ecuador, it doesn’t always work out that way. I’ve probably discussed more than once how even the Internet has been turned into something that adds another layer of bureaucracy and friction to getting things done here. Or getting access to the Internet for banking or other services may be even more difficult than using the service itself, requiring reams of paper and signatures before being handed maybe a USB token or series of passwords, in an office somewhere out of the way, that you have to visit in person.

This must contribute to the high costs of so many things here in Ecuador. Because in so many cases, instead of just having a person do what a person could do alone, they add a machine to do it, then add a person to run that machine.

In this photo, we’re looking at a ticket line at Movistar, one of Ecuador’s main cell phone service companies.

They’ve installed an automated kiosk, with a touch screen for several options depending on the type of service you need.

However, instead of letting the public actually use the touch screen, they’ve hired someone to touch the touch screen for you, and then also write down the nature of your inquiry by hand into a notebook! At which point you are then delivered a slip of paper with your number on it, which will eventually show up on one of the flat-screen panels throughout the office when your turn comes up.

Perhaps they had too many problems initially with people not being able to use the automated kiosk-this wouldn’t surprise me as human interaction is the norm, not the exception in Ecuador, and most people just aren’t used to having a machine handle their requests. But hey, what can I do? It is what it is.

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Welcome to Destination Ecuador!

Welcome to Destination Ecuador! My family and I have been living in Ecuador for the last four and a half years. We’ve dealt with the worst kinds of red-tape, searched out or ended up making hard-to-find ingredients ourselves, imported equipment for making chocolate confections, learned the import-export business...Continue >>

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