In a year-end interview, President Rafael Correa said he intends to make
streamlining government paperwork a priority for 2014. Although the
original intent was to reduce the steps and time required to establish
and operate a business, Correa said that red tape needs to be cut back
in all interactions between the government and its citizens.
A pilot project beginning in March in several cities, including Cuenca, will be the first step in the red tape-cutting effort.
Correa first announced his bureaucracy reducing plan in August when he
presented a graphic at a news conference contrasting the time required
to open a business in Ecuador, Chile and Uruguay. While it took an
average of 56 days to start a business in Ecuador, he said, the process
could be completed in three days in Chile and seven days in Uruguay.
“This is outrageous and needs to change,” Correa said. “We need to get
beyond the mentality of a bureaucracy that wants to control everything
and that puts up unnecessary obstacles for citizens who want to invest
in their country. We need to see how other countries do this and follow
their good examples.”
Correa also said he wants to reduce the current requirement that new
business applicants need to show they have $800 in the bank to qualify.
“This is silly. Obviously, they will need a lot more than this when they
start to operate a business but there’s no reason they should have $800
when they apply for a license,” he said. “I think $100 is fine.”
He said that he has asked Ecuador’s minister of production Richard
Espinosa to develop streamlined rules for new businesses and to work
with the national assembly to develop laws to implement the changes.
Promerica negotiating to buy Produbanco
Promerica Financial Corp., the operator of Nicaragua’s biggest bank,
said it is negotiating to acquire control of Ecuador’s third-largest
publicly traded lender, Banco de la Produccion, SA, which operates under
the name Produbanco.
Promerica said in a statement today it’s seeking approval from Ecuador’s
antitrust regulator to buy a majority stake in the Quito-based bank.
Closely held Promerica already owns a lender in Ecuador and has
operations in Costa Rica, theDominican Republic, El Salvador, Guatemala
and Panama.
The deal would be the first sale of an Ecuadorean bank to foreign
investors since President Rafael Correa tightened regulations to force
local lenders to divest noncore units in 2012 and raised taxes this year
on banks to help fund government anti-poverty programs. Nongovernmental
banks’ net profit through November was 21 percent lower than in the
same period of 2012, according to the most recent data from Ecuador’s
bank superintendency, known as SBS.
Government increases the basic salary by 6.8%
Ecuador’s minimum monthly salary will increase from $318 to $340 in
2014, a 6.8 percent increase. It is the smallest increase since 2007, a
result, the government says, of a slowing economy and low inflation. By
contrast, Colombia just increased its basic wage by 4.5 percent and Peru
is considering leaving its basic wage unchanged.
The minium raise is not only important to low income workers, but is
used as the basis for social service payments and legal penalties, among
other things.
"The Latin American economy is not growing at the rates of previous
years,” says Ecuadorian government economist Fabian Aguirre. “We have to
increase the wage with caution. I think that is an appropriate amount
given the circumstances.”
Photo caption: President Rafeal Correa
