ADMN for the business to do payments as various

ADMN
296 International Business

 

 

Assignment
1

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 Influence of Globalization-

Ecuador

 

 

 

 

 

 

 

 

Submitted To:                                                                      Submitted
By:

Danny Hu                                                                             Pratham
Garg

                                                                                                196791

 

Introduction

After analyzing
5 countries I have selected to go ahead with Ecuador. It has great
opportunities for business as well as some people plan there retirement to be
here. Prices and costs are moving up and
should continue to appreciate for the next several years. Inflation seems to be
under control and most economic indicators are positive. There is a good labor
pool available in Ecuador, which makes investing in Ecuador particularly
attractive. Minimum compensation levels are set by the government according to
the job and industry and can be adjusted by them. The minimum compensation
package is about $366 a month, and Ecuador has a wealth of good private sector
partners available. Ecuador’s free-trade zones you can import raw materials and
machinery duty free and then export finished or semi-processed goods without
paying any taxes. Businesses that occupy the free-trade zones have no
restrictions on the repatriation of their profits, and they benefit from
relaxed labor laws that allow them to hire workers on a temporary basis without
supplying a yearlong contract. All this boils down to a favorable environment
to invest in Ecuador. Currency of the nation is us dollar so it becomes more
easy for the business to do payments as various countries all over the world
use us dollar. Ecuador is the world’s leading exporter of bananas and a world
leader in rose production, significant opportunities exist in import markets
for some agricultural goods. Among the entire range of the country’s
profitable sectors, only four sectors were chosen by virtue of their economic
attractiveness on a curve of supply and demand relative to FDI. These sectors
are:

Agribusiness and forestryTourismReal EstateFishing and aquaculture

Geography

Ecuador is a country in western South America, bordering the Pacific
Ocean at the Equator, for which the country is named. Ecuador encompasses a wide range
of natural formations and climates, from the desert-like southern coast to the
snow capped peaks of the Andes mountain range to the plains of the Amazon
Basin.

Cultures

Ecuador’s official language is Spanish, but the Indian population speaks
Quichua – an Incan language -. Besides Spanish, ten native languages are spoken
in Ecuador. English is the most spoken foreign language amongst tourism service providers and professionals.

Ecuador today are famous for
their marimba music. The Ecuadorians have a distinctive type of dress code. Ecuador has some very tasty and very
strange combinations in their cuisine. You can
expect to find some lemon marinated shrimps, toasted corn on the cob and a huge
variety of pastries filled with all types of different stuffing.

 

Government systems

Ecuador’s political situation
today is deeply rooted in the country’s rowdy history. The Republic of
Ecuador’s political system is a representative democracy. The Government is
divided into three branches: executive, legislative, and judicial. There is also
an autonomous electoral agency called the Tribunal Supremo Electoral. Ecuador
is separated into 24 provinces each of which is further divided into
administrative cantones and parroquias. In 2008, President Rafael Correa dissolved
the Congress and convened a special constitutional assembly, which wrote a new
Ecuadorian Constitution. The proposed constitution went to referendum in
September of 2008, and was approved by a wide margin.

GDP / GNP / Export / Import

GDP -5,968.98 USD (2016)

GNP -181.4 billion PPP dollars (2016)

Export and Import

Overall
Exports and Imports for Ecuador 2016. The total value of exports (FOB) is US$
16,798 million. The total value of imports (CIF) is US$ 16,189 million. At the
HS6 digit level, 2,412 products are exported to 162 countries and 3,970
products are imported from
183 countries.

Business
partners

Ecuador’s
main export commodities are petroleum, bananas, cut
flowers and shrimps. Its main export partners are the United States, Panama,
Peru and Italy. Its main import commodities are vehicles, medicinal products,
telecommunications equipment and electricity. The main import partners are the
United States, Columbia, China, Venezuela, Brazil, Chile, Japan and Mexico.

 

 

Positive’s and negative’s of globalisation in Ecuador

Ecuador is
also known to export other products such as bananas, seafood such as shrimp and
pre-cut flowers. With four free trading zones within Ecuador and one hundred
and fifty zones in the United States, Ecuador has become the U.S. main export
partner; other countries, which also share a global interdependence from
Ecuador, are Columbia, Brazil, Japan, Mexico, China and Venezuela. However,
there are many ways globalization has had a negative effect on the country.
Globalization has affected countries trade, travel, business and people larger
companies are setting up their businesses in Ecuador and are pushing out
smaller corporations or family owned businesses. The large cooperation is known
to offer lower retail prices because they are able to produce their productions
at a lower price. Instead of creating interdependence within Ecuador and its
people, this type of globalization, or greed as I view it, can possibly be tied
in with the high poverty rates in Ecuador mentioned under the political and
economic system tab. 

Business

According
to my research on Ecuador, so far I will like to set up a Hotel. As tourism is
the main sector for income in Ecuador. This would be a great opportunity for
me. People from all over the world like to visit such countries. In addition,
as we know the purchases power of the nation is increasing so it can be very
helpful for such kind of business. A hotel, which would be associated with a
renowned group that will help to attract potential loyal customers. Tourism is
only going to increase in future. As many families plan there, vacation and
companies setup their annual meeting sometimes at such location. Tourism growth
is so high here due to climate, local attractions and beautiful beaches. Labour
cost is low and tourist are ready to pay high in peak, seasons so which will
result in higher profits. As far as competition is concerned, it always boosts
up the sales revenue as consumer go with the best and everyone needs to improve
to stay in the market. There are several other reasons why to invest in this
kind of business.

References

Opportunities for investments in Ecuador.
(2015). Retrieved from https://internationalliving.com/countries/ecuador/invest/

Unlock
the Treasures of Ecuadorian Culture. (1995). Retrieved from http://www.ecuador.com/culture/

Ecuador Government Overview & History. (1997).
Retrieved from http://www.ecuadorexplorer.com/html/government_and_economy.html

Ecuador Trade at
a Glance: Most Recent Values. (2016). Retrieved from https://wits.worldbank.org/CountrySnapshot/en/ECU/textview

Globalisation
in Ecuador. (2013, June 11). Retrieved from http://egonzaecuador.weebly.com/blog/globalization-in-ecuador