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So Maria goes to one of the biggest flower shops in Quito today, and they have advertised outside on a sign “50 cents off every candle for Mother’s Day”. When she gets to the register, the cashier says you have to buy a flower arrangement to get the discount. Maria says, wait a minute, the sign here says nothing about buying a flower arrangement. Let me talk to your manager. The cashier hems and haws so Maria just goes straight over to the boss lady.

She explains that the sign says 50 cents off every candle for Mother’s Day. The lady says, yes, but you have to buy a flower arrangement and the candles with “the sticker” on them. What sticker, I don’t see any sticker, and I don’t see any wording about a sticker on your sign, says Maria. If you want to provide good customer service, as I am sure your company does, you should honor what your sign says! Ummm, hmmm, hedge, hoping that Maria might back down, she doesn’t have any way out. But she still tries by saying, but I can’t give you the discount without buying an arrangement.

Your sign says nothing about a flower arrangement. And you can’t tell me that you can’t simply add in a discount on the register for the thirteen candles I am buying?

Go ahead, give the lady the discount, the manager says to the cashier. Maria gets her discount.

This kind of arbitrary on-the-spot changing of the rules is part of daily life in Ecuador. With both the public and the private sector. In this case as in so many, it’s probably because they didn’t give their sign much forethought, and they didn’t figure someone would even question it. They didn’t even figure that if someone wants to come along and split hairs over it (which most people won’t do, and I wouldn’t call this a case of even splitting hairs), and when Maria expected just what the sign was offering, they weren’t prepared to deliver. So they arbitrarily invent an interpretation on the spot that serves their interests.

Here it´s very difficult to find anything, be it product-wise or service-wise, so I spend a lot of time just searching people and things out. I have discovered more just keeping a sharp eye out when driving around Quito than I have using the yellow pages. I guess this is something like what a pre-internet economy looks like.

It took me three weeks to get glucose wholesale, and it took me two months to find it. I could only find one place in Quito that would sell me the 10kg I wanted. The price-$1.15 per kg. Otherwise I would have had to pay $5 for 600g at the lame-o cake shop or buy a 300kg barrel for a two lifetimes supply of glucose for $300 something dollars. I had to call the shop that sold me the 10 kgs nearly every other day for three weeks, until the guy finally tired of telling me they hoped to have it tomorrow, took my name and number, and said they’d call when they got it in. Just when I had almost given up hope, they called.

Calendar year two of operation and we have to get our health permit renewed. Health permits run only on a calendar year, so if you get your first one December 1, you’ll have to review it during the first three months of the following year; they do allow a three month grace period.

It’s hard to really call it a permit since all the bureaucrats in charge of anything, especially permits, seem to run a “consulting business” on the side to help you get the permits they are officially supposed to get you. You have to pay them their “consulting fees” to help you get the permits, which in plain language are really bribes, and if you don’t pay them the consulting fees, you may just spend eternity waiting for them to issue the required permits. This time around our health permit was tied up closely with our sanitary registry, allow me to explain.

If you have been reading regularly, you will recall that back in August I submitted product samples for my sanitary registry. The lab work is all done now, but before the lab analysis can be submitted to the “National Hygiene Institute” also known as Instituto Izquieta Perez (I will look into who Izquieta Perez for those of you who are curious to know after whom this obstructionist bureaucracy was named), my health permit has to be up to date.

When we first were issued our health permit last year, they classified us as “small industry.” They have a number of classifications for businesses here, from “artisan” to “small industry” to “large industry” and I don’t know how many others. But chocolate makers, especially if you are small scale like us, are usually “artisan”. Having an artisan classification saves time and money; you don’t have to charge sales tax on your items, you don’t have to maintain an accounting system (though that should be your business anyway, the government mandates that you MUST have an accounting system and an accountant if your revenues are over $60,000 annually), and your sanitary registries cost less.

We had been contemplating becoming artisan for sometime. To be officially classified as artisan you’ve got to be registered with the local chamber of artisans. I’ll save that for another story, but anyway…on the recommendation of the consultant who is doing the “registro sanitario” we asked the Ministry guy to reclassify our Health Permit as “artisan”. This would also save us money as the cost for each “registro sanitario” if you are an artisan is one third of what it is if your are “small industry”.

Keeping it brief, the guy from the Ministry insisted, despite our repeated requests for a change, that there was no way he could change us to artisan status. We had no choice but to accept the decision, since we need our sanitary registry to be able to export, and we weren’t about to offer him more money or seek someone else out who might help us change it.

So we are currently registered as small industry until we can either find an expediter who might be able to help us change our status sometime in the coming year, or until next year when we will renew our permit and perhaps have found away around this ridiculous set of regulations. We’ve paid for the sanitary registry for our products, which is valid for five years, so we at least won’t have to worry about those again for a while. Onward we march.

Ecuadorians are inherently distrustful of one another. When it comes to doing business, my biggest advantage is being a foreigner. People believe I will pay on time, deliver what I promise when I promise it as I promised it, and generally act with integrity, fairness, and honor. However, they don’t seem to believe any of these things about each other. They seem to hold the implicit assumption that no one should be trusted, every is trying to get the better of you, and that the most likely outcome will not be a good one. In sum, everything is seen from a win-lose perspective; how do I win, how do I come out ahead of you? rather than seeking a win-win outcome.

So when it comes to sharing information with other businesses, be it for discussing a potential product, business deal, or just because it’s interesting, at least personally and culturally, I am not afraid of sharing information. In the US, most information is free unless it’s very arcane or highly specialized.

Why is everyone here afraid of sharing information? Because they think someone else is going to steal their idea, copy their business, do it different and better, or different and cheaper, and put you out of business? Do they feel threatened? Could this be a reflection of a lack of self-esteem, a fear that someone else can and will do it better? Perhaps it is because this is still a society of scarcity; just getting enough to eat and making enough to have shelter and food is the daily concern of most people here, for that matter, worldwide. So any information that will put you ahead of anyone else must be kept secret.

If you examine the perspective and the impicit assumptions here, they are based on the paradigm of scarcity and not abundance. If you share knowledge, you are losing your unique advantage. Rather than the idea that you might perhaps be sharing knowledge and spreading abundance.

Last week we went to the bank to open a checking account. Right now, all we have is a savings account.

We thought we had all the documents lined up; copies of our ID cards, passport, cash ready to deposit. But that wasn’t enough. Partly because of the deep love of bureaucracy here, and supposedly because of the need to deter money-laundering, all banks must ask for a number of documents to open a bank account. Since we are self-employed, they wanted additional documents. These included:

*Copies of National ID Card
*Copy of our Business Taxpayer Number Document
*”Commercial Certificate” from one of our vendors, stating that they do indeed sell us stuff for our business
*Money to open the account (of course)

Maria, my wife, asked “What if I have enough income that I don’t have to work, are you telling me I can’t open a checking account?”

“I wouldn’t recommend it,” was the reply. “Savings.”

I was not amused but not surprised. We are sticking with cash operations for now.

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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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