Junta de Beneficencia

According to the dictionary of the Spanish term, destroyer is somebody that

destroys. How painful would it be that new generations connect the green with destruction! Building is making a tangible or intangible work in an ordered way and gathering the necessary elements according to a plan….When talking about a contractor and building we associate it with the JUNTA DE BENEFICENCIA DE GUAYAQUIL that for more than a century, has put together and built the

network of services according to the most needy people across the country, from birth until death. And if we think about the meaning of the word VOLUNTEER, the dictionary gives us the meaning by saying: a group of persons who volunteers for an usually common altruistic task and immediately we are able seeing legions of men and women dedicated to this spectacular task and again we must associate it with the JUNTA DE BENEFICENCIA DE GUAYAQUIL (Board of Charity of Guayaquil). As natives from Guayaquil and also Ecuadorians, we have to defend Guayaquil’s Lottery and stand up not only for our region or this province, but of the poor. As Chimborazo‟s prefect, Mariano Curicama says, referring to the Cootad: to do charity (by doing raffles) they “mustn‟t come out of people‟s pocket, that‟s impossible”. Because obviously it would be perverse to take a new contribution to civil society rather than new revenues that the regions have the right to receive. Far has gotten the audacity to attempt to continue squandering the country‟s money and then want to exterminate the JUNTA DE BENEFICIENCIA DE GUAYAQUIL (BOARD OF CHARITY OF GUAYAQUIL), through the means of

financing this extraordinary work worthy all praise, both at local and foreign reputation, whose accountability we have been receiving decade after decade and during many generations. We know that birth, children‟s and many other hospitals have been the salvation for poor people, as health and education in the Ecuadorian Government gets worse by the year and especially in Guayaquil. Let‟s save the reputable Institutions. Until when will we allow to be destroyed what works well and rely on a system which never worked. The Constitution of Montecristi promotes citizen participation and social action. What are you waiting for joining in?

Ing. Joyce Higgins de Ginatta

Guayaquil, August 2010

Note: Now you can follow my comments on the economy and national policy on Twitter.com and Facebook under my user Joyce Ginatta.

E V E N T S

XI International Conference called: “RESCUE LATIN AMERICA:

EMPLOYMENT, SECCURITY AND DEMOCRACY” of the Federacion

Interamericana Empresarial “FIE” (American Federation of Business) that

took place on August 2, 2010, in the Isabella Auditorium, Hilton Colon

Hotel in Guayaquil.

In the graphic is the vice mayor of the city of Guayaquil, Dr. Guillermo Chang giving words of welcome to everyone attending the great event.

Ing Joyce de Ginatta, FIE‟s President in the Inauguration lecture of the event called “Anonymous Ecuador”.

More than 1.200 people attended the FIE’s event among young academics, business leaders and entrepreneurs, interested in listening to all the exponents at the Conference.

From left to right: Mr. and Mrs. Wilfred Meinlschmidt, and Mrs. Sara de Benalcazar.

We can see several international and local exhibitors with Ab. Jaime Nebot Saadi, Mayor of Guayaquil.

Mayor Nebot with Joyce de Ginatta

Mayor Nebot with Alberto Padilla

Mayor Nebot with Ing. Joyce de Ginatta and Dr. Blasco Peñaherrera Padilla

Mayor Nebot ,with Mr. Armando Calderon Sol and Ing. Joyce de Ginatta.

All exhibitors who shared their conference attendees at the XI Conference of the FIE

Mrs. Lorena Bruzone de Torres Chief Executive of “Dolce Incontro” spoke of her experience in the creation of her company.

Economist Mauricio Pozo, Ecuador‟s former Secretary of the Treasury talks about Dollarization as a route to development.

Dr. Marcel Granier, Director of RCTV-Venezuela spoke about the relationship of the press for democracy.

The Economist Auki Tituaña, former mayor of Cotacachi, talked about local self-government.

The Economist Vladimiro Alvarez, Ecuador‟s former Minister of Administration, talked about investment.

The Economist Otto Sonnenholzner, general director of Radio Tropicana spoke about Democracy vs. Dictatorship.

Dr. Eduardo Peña President of the Guayaquil Chamber of Commerce spoke about work.

Dr. Guillermo Lousteau, Director of Inter American Institute for Democracy talked about Freedom (Democracy)

Dr. Armando Calderon Sol, El Salvador‟s former President talked during the Lunch-Conference about “Changing the history in Democracy”

Through a video-conference, former vice-president of Ecuador, Economist Alberto Dahik, spoke about “Open Country”

Dr. Mauricio Rodas, Director of Ethos, spoke about Democracy.

CNNs journalist Alberto Padilla talked about “Why does free press strengthens Freedom?”

Dr. Blasco Peñaherrera Padilla, Ecuador‟s former vice-president highlighted the meaning of “Democracy on paper”

Ing. Giovanni Ginatta, Executive Director of the FIE, giving thanks to the exhibitors and attendees at the XI International Conference.

EUROPE 2030

Abelardo Pachano Bertero

The European Council in December 2007 established a Reflection Group to identify the challenges that the European Union must face in the following twenty years and review what the answers to this event could be. The group was lead by Felipe Gonzalez and the result of their deliberations were made public 30 months later, just when the international crisis reached that country, causing huge political tensions as a result of the needed economic adjustment that had to be taken to face it and achieve mitigating them. The timing of the report is undeniable. It precisely addresses the issues that are the core of the dilemmas which entails the loss of wealth with increasing

unemployment rates and the problems of competence for wage and salary, costs, an aging population, the loss of force of the European economies. Added to all the above, we have to mention the destabilizing fiscal deficit; the debt reappearance as a sword of Damocles, the fragility of financial markets and their intermediaries; the environmental damage as well as the long horizon for the return of all the roads which these economies require to maintain their global poise and not lose the leading role they have achieved and is threatened by the presence of several emerging economies that are climbing in their participation within the global economy. The first answer links all these problems with the reaction capacity which the European Union might have. According to the group, it is positive, but demands decisions to be taken together, united, knowing that the challenges are complex but if not confronted, the damage will be even bigger. Therefore, the needs of accepting that the current political project must be renewed, expanded, reach a consensus, and should involve all the sectors of the society and members of the EU, without exception. The analysis clearly shows that the crisis appears “as a break point in the history of a new global reality that has been shaping for over two decades. It appears that there will be winners and losers in this global field, and if the European Union doesn‟t want to be among the last ones, as it‟s happening, it has to react now; define reform strategies for the horizon of the next twenty years, join forces, mobilize resources and move to action. Ultimately, overcome the introspection looking out towards the new global reality”. The above quote from the presentation of the report puts the record straight. It fulfills with the first duty which corresponds to the political leaders to publicize the existence of the problem so it can be addressed and resolved by their communities. Then, enters the issues in detail, sees the complexity and seeks to draw attention to them so that in this way the solution is adequate and timely. It worries a lot the poor functioning of financial markets, lack of control and regulation in many of them and the states responsibility in their stabilization. They also feel that protectionism may affect negatively the way of conduction of the economic policies for which it‟s essential to sustain strongly, decisions against cyclical force to avoid exacerbation of social harm in a framework of commitments to recognize the independence of the countries, the maintenance of the common currency, stability as a standard to ensure future sustained growth. All the above must be part of an extended plan of reforms of short and medium term in which there should be considered amnesties reductions, differences and imbalances between the different members of the EU. More controls, better coordination, sustained compromises and desire of collaboration are the elements that make up the matrix of these European challenges. In this spectrum fits the strengthening of political leadership community organizations, improvement and strengthening of its funding sources that can support in a consistent way without depending on the governments will. The best fiscal coordination with closer supervision to prevent derivations above the limits considered acceptable and tolerated by international markets. Improving education to be able having a better prepared and more competitive human capital in a world of knowledge, research and the development of new

products and services is the program‟s core. We must catch up the detected backwardness with a reform involving all levels of education. The States must drive research programs and dedicate a higher percentage of resources for this purpose. The energetic dependence is another sensitive issue of the Reflection Group‟s proposals. The EU must find mechanisms to ensure the provision of their needs establish parameters of safe nuclear energy and give full support to the renewable ones. The labor market requires deep conceptual changes. We have also to take into account the existence of common currency that forces unifying productivity and sustain tax and close price policies. The technological advances demands new labor relations to achieve their maximum utilization. It‟s necessary to introduce the concept of “flexi security” in the market, and of course, improving productivity is the ultimate goal. Aging population is a severe headache. The EU migration policies must update their comprehensive educational training plans to meet the additional requirements, estimates at nearly 100 million people in the next 40 years. Retirements plans must be reformed to make them consistent with the new life expectancy, the funding needs of pension schemes and physical viability. How many problems does this topic bring with it! With 500 million consumers the EU has a huge but feasible challenge. It‟s probably the biggest market in the world and in consequence it turns into a magnet which everybody wants to exploit. For China it‟s the trading partner that gives higher returns. Now it‟s turn for the European Governments to create a proper environment for their products to be competitive, generating good and well paid jobs and simultaneously sustain leadership in shaping the world‟s future. This is how the community organizations that seek to transcend look at the problems analyzing them without false modesty. They look at the weaknesses and threats and seek to counter them with a deepening of the strengths and opportunities. As harsh as the measures could be, if needed, they are confronted. Finally after having overcome the pain, they fully reap the wishing well. In times of crisis, opportunities appear. Nobody changes when things are going well and challenges aren‟t appreciated. But true leaders know how to do under these circumstances. This is learned by knowing the history, respect it as it is, without altering it; carrying values, strengthening democratic freedoms and building more democracy. The message is clear. Those who engage in this type of reform can achieve the goals. Those who ignore them are condemned to go adrift.

Democracy and authoritarianism

Dr. Guillermo Lousteau President of Inter American Institute for Democracy

In a survey conducted by UNDP two years ago, Latin America expressed its disappointment with the results produced by democracy in the region. Our society‟s characteristics remain being poverty, inequity and corruption, as people perceive. At the same time when they are asked about their support for democracy, the answer is mainly positive. And yet when referring to the institutions of democracy such as political parties, Congress and justice, people manifest not trust them. What democracy are we talking about? To analyze democracy in Latin America, three elements must be determined the concept of democracy, Latin America‟s diversity and the dividing line.

The Concept of Democracy. The concept of democracy is one of the most mistaken and challenged. Along with the growing prestige of democracy as political system (and no one dares to declare being anti-democratic) its definition is far from unambiguous. The academic world distinguishes nowadays, many forms of democracy, without consensus on some particularly. From the point of view of political reality, we could start from two basic concepts that now seem to be opposed: democracy as majority rule and democracy as respect to individual rights. Democracy as majority rule comes from the Greek world. Polybius conceived it as one of the three pure forms along with the monarchy and aristocracy, and although there were glimmers of doubt, as Plato states, in so far as could reach the majority will, the concept remained. By the end of the seventeenth century, John Locke also thought of a system where the majority rule but simultaneously claim the guarantee of individual rights; mainly the right to freedom, to property and the search of his own happiness. Locke didn‟t notice the potential contradiction: what would happen if the majority will not respect the individual rights? That contradiction hadn‟t occurred yet in a concrete way, and just appears in the late seventeenth century, when discussing the United States Constitution. At that time, the local legislatures had shown abuse to individual rights, especially the ones concerning to property and the constituents were aware, as Jefferson expressed it, that the abuse of a majority could be as hateful as that of a monarch. Therefore the creating system had to limit the majority‟s will and the debates among Federalists and anti Federalists had clearly set out the doubts about the merits and risks of a democracy so understood. Therefore, the ultimate goal was to set limits to the majority, which was done through a constitutional system that established three institutions aimed at this: the separation of government into three branches and a “checks and balances” process between the three branches, the independence of judiciary and judicial review. In this last one, definitely orchestrated by the “Marbury vs. Madison” ruling, which constitutes the very essence of anti majority of constitutional character: Members of the Supreme Court, nine judges not elected by the people, without political responsibility and lifelong charges, are the ultimate interpreters of the Constitution and with the ability of overrule the other two powers –elected as representatives of the majority - if they oppose the rules of that Constitution. If the concept of democracy is only the majority rule, American constitutionalism would clearly be undemocratic. But that‟s precisely the value of the constitution: that the majority governs, but with clear limits of respect towards the individual guarantees. No wonder, the American constitutional system is the most successful political process of history.

The most unrestricted government is what characterizes the systems themselves as “XXI century socialism”, which repeat previous experiences of governments elected by majority and which have been disastrous for society when there were no limits. So, with this acceptance of democracy, identified as populism, the authentic democracy – which involves both, the majority and respect for individual rights – now, appears under attack from within. Latin America’s diversity The second element to be clarified is Latin America‟s diversity. From outside the region is considered as a unit with a unique identity that trends to prioritize as characteristic of that identity the countries of ALBA. This view is incorrect and presents specific threats. The most serious would be the evils attributed to our country‟s own cultural problems, which lead to the conclusion that they would be insurmountable. By contrast, the perception that the conduct of some Latin American countries are overcoming problems of chronic failures, would allow being optimistic about the common cultural elements that have constituted barriers to institutional and economic development could be removed. From the quantitative point of view, most countries today are who have made respect for the institutions, which is the basis of their performance. Compared to only four countries signed on the populism, (Venezuela, Ecuador, Nicaragua and Bolivia) and the exceptional case of Cuba, most show a different vocation despite the difficulties, such as the cases of Brazil, Chile, Peru, Costa Rica, Dominican Republic and others. The second point referred to that diversity is that when analyzing the different states of our institutions and processes that are taking place, it‟s possible to provide mutual assistance. Thus, for example in terms of electoral regimes, training and protection to press freedom, there are examples that may be of mutual benefit. On the other hand the analysis of these processes allows visualizing the way how the assault to institutions in countries in the XXI century and be alert to detect early stages of this situation against democracy. Venezuela is the paradigm of the mentioned process, executed until the end in Bolivia, and is still being implemented in Nicaragua and Ecuador. This alert has been an example for Honduras to stop going towards this direction. The dividing line. The last element that is used for the analysis, is the dividing line drawn between the region‟s countries. Drawing that line between the vague concepts of the left and the right isn‟t functional and distorts reality. It would be more reasonable and useful separating authoritarian countries from the democratic ones, in which the institutions are in force and work well. We think there are two concepts that are based on democratic values: the so-called “liberal” and social democracy. Both believe in the market, economic openness and respect for individual freedom. In the concrete example of countries - both liberal as social democratic – in whom the institutions always

work –democracy‟s key element – it‟s possible to replace a government through elections. Thus, a social democracy as the Chilean, with a president with more than 70% of approval, can lose an election in front to their opponents. It might also happen that a president such as the Uruguayan Vasquez, of the so-called left wing, handles the government to his successor, when his popularity also reaches 70%. And in the other line and same conditions, Uribe left the presidency as the best Colombian president in history, because the law doesn‟t allow him to be reelected. We compete with the social democrats, the national left and democracy to see who manages and governs best the state. They are our adversaries. Our enemies are the authoritarian.

“Changing the history of Democracy” Transcript of Conference issued on August 2,

2010

Dr. Armando Calderón Sol El Salvador Former President

It‟s an honor for me to be here attending the XI Conference of the Federacion Interamericana Empresarial (FIE) entitled “Rescuing Latin America”. I want to especially thank Mrs. Joyce Ginatta and Ing. Giovanni Ginatta for their kindness and invitation that for me means a lot for the political moments that is living Latin America. I congratulate all the previous speakers and lecturers, because it has been a very fruitful morning in which the audience also hasn‟t moved; I told them that in my country it‟s difficult to keep an audience sitting so long, but that only happened because they were interesting as any we‟ve moved. I have to let you know that I‟ve got the worse part, because it‟s talking to you while you‟re eating with much pleasure.

When hearing this morning the exposures and having my speech prepared, one says: this I won‟t say, that I won‟t say, because it has already been said. And my conclusion isn‟t to start speaking about Democracy, as it already was said and would be senseless. There is a question we should ask ourselves: ¿What is happening in Latin America? And we are suffering an aggression; the people and the fledgling Democracy that we have built and have been building has been affected by this aggression, populism, abuse of Human Rights, fundamental rights of citizens; the exaltation of these messianic leaderships; the abuse of the Rule of Law, is what we are experiencing daily in Latin America and in many countries. In most I‟d say and you have seen it, we have moved backwards to the advancement of the emerging democratic process, the dictatorship of the past. We thought the military dictatorship had been left behind; we took a step forward and now we start with a regression phase initiated by the famous commander Chavez, who is ruining the country with Venezuelan oil. He is finishing its wealth, destroying it and turning it into an exporting revolutionary process of XXI century which he calls his Bolivarian Revolution. I believe that if Bolivar would revive, he would die again seeing how his name and figure has been destroyed. You‟ll probably tell me, perhaps because you do not feel or haven‟t felt in another way the intervention of Venezuela in Ecuadorian politics, but I come from a small Central American country, El Salvador, and throughout Central America has been badly hit by the Bolivarian Revolution and the XXI century socialism. As he couldn‟t in El Salvador because there was a resistance against Chavez and his politics, he entered through the Municipalities controlled by Farabundo Marti organization, the extreme left of El Salvador who had control of several Municipal Governmental Mayor Offices. They were devised to create a joint enterprise between the Municipal economy, a certain number of FMLN mayors and some businessmen from the left wing. They created a joint venture that through Nicaragua bought and sold oil. El Salvador isn‟t a big oil market but it reaches around $1.500 million dollars; of those $1.500 which El Salvador buys, 12% is being supplied by the Oil ALBA, which means around 180 million dollars that Chavez sends to the Salvadorian market; from that amount he charges 60% and the remaining 40% he leaves in the company to be used in political interventions. The FMLN have left 72 million of Chavez, and he says that there is a non collectable debt and that„s in credits for that company that for 20 years will be non collectable, not in El Salvador sovereign debt, because it has not signed the State, it hasn‟t passed by our Legislative Assembly, but is a debt of that mixed economy company with PDVSA. If you believe that there is a monthly flow of money to indoctrinate, for selling ideas, for their political organization that comes from the Oil ALBA or from Chavez, is what we have been living in all Central American countries, who through Nicaragua which already is totally their bastion and is distributing oil; Central American countries are also born oil buyers and they have that promotion to the totalitarian dictatorship of Chavez and Castro and have that bond and apparatus with advertising agencies, media with a series of situations with lots of money, this is, without having in mind the resources already within.

They have made their way to power in El Salvador; we had a government of 20 years in power: the National Republic Alliance, our political party, and had to rescue our country from civil war; we were immersed in a guerilla war and a very big struggle in the 80s. They were long 12 years of a military dictatorship; we had socialism; we had the most profound agrarian reform ever given in America. Nobody could have in El Salvador more than 245 hectares which were brutally expropriated; the above situation also happened with banks, the sugar mills and the coffee benefit, which was our biggest wealth, that were expropriated; they expropriated industries which went bankrupt through the banking system; credits were reduced and industry fell. Economy was almost the 90% in hands of the Estate, this was in the 80s; we made an historic struggle when initiating our political party called ARENA; we suffered a total disinformation of the Latin American and world‟s left wing. We were called ultra rightist, but we didn‟t give in, we kept on fighting politically and when the left misinformed us we said that one day we‟ll show them who we really are; this is , democrats, we follow democracy, and wish democracy for our country. Let‟s not waste time arguing about saying: look, we‟re not; we aren‟t from here, we‟re not from there; on the contrary, we liked times in which they were afraid; but we achieved coming to power through elections required through a Constituent. We made our political party and came to power; once there, we opened spaces for peace and formed peace incorporating hard and reckless guerrillas, the toughest ever seen on the continent, such as the Peruvian who discussed to see which was the most aggressive: the Peruvian or the Salvadoran. We achieved incorporating them to the democratic process; it was a lucky situation that the Berlin Wall fell which changed totalitarianism and Soviet Union, which made it easier to finish the cold war in Central America, while we opened spaces to turn our country into a viable and democratic one. We started working with the democratic process, by restoring the socialist nonsense we had had, turning the bank into a private one; the telephone and electric companies, many industries were privatized, as many others. We turned a collectivist economy into a private one and that we have been working on, reducing poverty and well-being of Salvadorans was increased by the day. The destroyed infrastructure, thousands of bridges, highways, electrical towers, destroyed houses as the result of this situation, were rebuilt. This task was done in a period of 20 years in which we had four ARENA governments. Unfortunately the last one didn‟t fulfill the requirements and there were bad faith deviations that shouldn‟t have happened but did, people wanted alternation but at one point we couldn‟t despite we wanted that, and people gave power to a government as the current, which is the FMLN but with a non-political president which wasn‟t from their party but was a renowned social democrat journalist, but they needed a person so as not to cause worries and fears and they led the presidency and thus able to come to power with an electorate of 51 or 52% through getting votes with a figure that wouldn‟t cause panic and fear in the Salvadoran voter and the middle class. So now we have a government that is doing and talking about a policy with two different versions. The government party talks of a radical discourse dreaming with Chavez, Ortega and the Bolivarian Revolution; dreaming of the ALBA, but the president

says: we don‟t follow the Alba or the Bolivarian Revolution; I have another mission and vision attached to the democratic left like Lula. The president tries to differentiate themselves and there are two speeches; but the tragedy is that the Ministries are in hands of the FMLN. Only a few of them are ruled by the president and the Assembly is ruled by the FMLN. Until now it seems like a play in which they are or aren‟t; He scolds, represses but they are with him, and that‟s the game they have; two speeches, two positions and follows that policy with that dichotomy in the presentation, while the country goes downhill with the insecurity that has been generated. There is no investment, it’s paralyzed; all we had in the past has come to a standstill. THANK GOD WE ARE DOLLARIZED. After hearing all the arguments about dollarization, I didn’t hear one which was for me, the most important one as a politician; that is strength; those who lose power are politicians who are deprived of the right to print money and that’s what I like: when economists give a series of reasons it doesn’t strike me. To me the one I like is cutting politician’s hands for them not being able to print money which is the same as robbing people’s pockets which has been done in many years. That’s our mutual luck of being dollarized because it can’t be easily reversed and hope it will be the basis to convert our economies into positive ones.

But when seeing the chaos which many countries in Latin America are living and are encouraging that abuse to power and the messianic attitude of many political leaders who believe they gained legitimacy by winning elections; that‟s why you see them attached to the left wing, not only in Latin America but around the world, as the case of Zelaya in Honduras. You have seen a president who openly ran over the Constitution of Honduras; the Supreme Court, the country‟s institutionalization condemns it and holds the conviction that there is coup, when it‟s obvious that the country‟s institutionalization has been saved. Why is this? Because he was abusive and forced the Constitution by seeking re-election and you saw many defending the legitimacy of origin. But what an example could Honduras be when asserting its Rule of Law, he claimed the Law; let presidents know that there isn‟t a permanent degree of legitimacy. The above is earned by the day when ruling because nobody is above Law, not even a President. A president hasn‟t more rights, only those which the Law grants and precisely that is called Democracy; that is the division of powers and the weight and counter weight a democracy must have: I think that the experience that Honduras went through is a great message for all the abuses in Latin America that want to turn down their Constitutions; it‟s something that has been hard and has hurt the left wing in Latin America. You are able seeing that little by little, Honduras has been recovering; they are recognizing the different governments despite Mr. Chavez and the UNASUR are fighting not to be recognized. When seeing the economic situation of these countries that Thank God have oil and much wealth, we can see a rich country as Venezuela who is each day poorer; there is more inflation; food rotten in ports which are imported by Venezuelan estate institutions Chaos reigns and first this opposition can be organized and be able to raise the country.

But I must tell you in strict political terms that we have to think what to do to assure for our children a free country. We can‟t stay still in front of this auditorium in which we see so many young people with so much hope, and I think a question must be asked: Is it possible that we wish to maintain a status quo? To save our countries we need young people to commit their participation in a political way without being afraid; starvation leads us to disaster and poverty as well as not doing anything. We have to work; search for unity of the democrats; of those who believe in democracy; as I said before the left and right wing must be left in the past. Chile and Spain are governments of left and right, but both want progress; there is pragmatism, development and well-being. There aren‟t extreme differences in economy; they emphasize about income taxes, the social and other programs which make the difference. The pragmatic world is about commerce, it‟s the search of development, and its competitiveness. There is competitiveness among nations and States. So, the world has changed into a modern one and of course the left is needed, I always say: “What do you see about the left and the right if both are good and necessary?” If there is a back and forth highway, the day has night and day; a person is born with a left tendency and another brother has the right one, and both are children of the same parents with different visions. That‟s how the world is because it has those two visions which we can‟t deny; a vision of left and of right. But yet this isn‟t the problem as it has been said this morning; the problem is being democrat or totalitarian, messianic; and if that arbitrary and messianic attitude of many leaders which come to power promising thousands of things and when they are in power they believe to be a Messiah in which their word is the one and only; then we have a problem. There are also people that make them think they are God because they flatter; this is unacceptable and I think the young are more committed to organize themselves to fight. If in El Salvador young people wouldn‟t have fought we would have a Marxist dictatorship and another Cuba. The young in El Salvador organized themselves, fought for their country, for democracy; if we wouldn‟t be there on the alert for democracy and if the democratic scheme would be torn, we would have the same previous situation. El Salvador will be free without doubt and the Salvadoran society knows they have to fight to keep freedom which is only achieved by the day with work, effort and participation. So you young people, entrepreneurs, and the entire world together, all sectors, you must save what you have; the country you wish to have. There aren‟t magical recipes; they are already given. Democracy is there and each one of us must be part of it participating with effort for a healthy, vibrant speech and betting for the country‟s needs to change it plus changing people‟s reality. You have a wonderful, green and rich country that still hasn‟t been untapped; a country that has it all and only needs a political and social organization. The time will come in which in Ecuador everything will be organized; that will be the day when American leaders will be born having a much higher level of development than nowadays; there are also countries that haven‟t got economic resources but have social organization and are millionaires, they are only the social organization. Just imagine, a country like yours with all the resources and beauties it has and adding social organization, you would really have a marvelous country with everything around. What is needed is will and objectives.

In Latin America they talked about the index of democratic development, but I tell you that the mentioned index has a bad generation which isn‟t mentioned and it is that in Latin America the bad ones are the political parties because here (at least in my country) they seem to be institutions of private right and not of public right. In our countries and mine also, parties have more or less an owner label. Hence the leader is somebody known and as it would be theirs; the leadership doesn‟t want to let go; they want to be stuck forever until becoming old in the party and that cannot be. A political party is a generational shift, has changes and is democratic. They favor democracy and if internally they aren‟t democratic, that cannot be. Politics must change with young people with vigorous and aggressive speeches, with a strong position towards abuse, against misery and poverty. That‟s why young people are required to retake the position and move forward with our countries. I am an optimistic and know and hope that this continent gives Latin America hope to follow that path moving forward, but always looking for participation, unity, that programmatic action that we must clearly show to the country and their people; that commitment, devotion and search for a consensus among all democratic sectors; we can have differences in many things but we all must seek for a coincidence to be democratic.

The Economy and the current Government

Econ. Cesar Robalino Gonzaga

The current government officials argue that the economic and financial policy that has been implemented four years ago is a complete success. Official information‟s of quantitative type that we currently have, guide us to different conclusions that the government claims. Let‟s look at several issues. In first place, if the reader analyzes the figures about economy‟s growth, they will find that the results are negative for the current administration. The GDP in real terms grew the first three years of President Correa‟s administration (2007, 2008 and 2009) to 3.2% annual average. The three years preceding the current government (2004, 2005, 2006), the GDP grew 6.5% annual average, which is much higher than the prior event. If it‟s manifest that the Ecuadorian economy had the effect of international crises lately and that previous government didn‟t have this phenomenon, the above comparison wouldn‟t be reasonable and would have some slant. If we would eliminate macroeconomic development for comparison, in 2009, yet we conclude that the GDP growth was higher in previous years than in the current government.

If we consider the above, what will the economic (GDP) growth be the present year? The previous conclusion is solid in the sense that the Government can‟t grow or defend the position that the result of its economic policy has been successful. This year, according to the CEPAL, GDP will only grow 2.5%, which means that the Ecuadorian economy under President Correa‟s four year government will have an average growth of 3%. If population growth is reduced, which is about 2% per annum, income per capita in Ecuador has increased by just 1.0% annually. The average standard life of Ecuadorians grew much more in earlier periods of government than the current one of Alianza Pais. The above represents more severe facts if we remember that no government before received so much money in the last 31/2 years. Previous governments were struggling with little money and financial resources, while in the current one, the resources are abundant. For example, the Ecuadorian oil price was $ 44 per barrel (average) in 2004-2006 period, while in the current one, (2007, 2008, and 2009) the oil price had an average of $68 per barrel reaching even to $120 per barrel. Nowadays, the Ecuadorian crude price is around $70 per barrel, higher than in earlier periods of the current government. The Ecuadorian State received revenues (without debt) in the 2007-2009 periods, of around $ 53.000 million. This is equivalent to the income (without debt) of 8 years prior to the current government. This is the extraordinary magnitude of the difference between the current administration and several previous governments. Despite the huge influx of financial resources that the current government has had and has allowed to expand costs much more than in the past, the Ecuadorian economy hasn‟t grown as was desirable as programmed in the Development Plan and the Plan for Good Life that are in force. Secondly, agriculture sector, food supplier and generator of foreign exchange, grew on average 3.5% per year (in real terms) during the current governments‟ three years (2007-2009), while in the earlier three years (2004-2006), it grew more; 3.7%. This shows also that the agricultural policy and others of the current government towards the mentioned sector (infrastructure, credit, etc.) gave no result as to proclaim victory or successful results in this productive sector of the country. Third, the construction sector which is important for the generation of employment grew on average during the current government (2007-2009) to 6.7%, while in the period 2004.2006 grew to 5.3% per year. This represents a modest improvement compared to the vastness of public resources that the government has had. Fourth, the current government received of the oil sector a total daily production of 532.000 barrels. Throughout the period of this government year after year, the total daily production level has been substantially reduced.

The first year of the current government has an average production of 511.000 barrels per day. The second year it reduced to 505.000 barrels per day. The third year had again another reduction to 486.000 barrels per day. Nowadays the level is about 470.000 barrels per day. The level of proven reserves increased marginally. Notwithstanding the foregoing, income from petroleum which feeds the balance of payments and tax revenues increased dramatically. This phenomenon was successful as a result of a substantial increase in the level of prices for exported barrels. This sector also shows that the Government cannot claim a victory or success of oil politics. Comparative purposes are going to show the real growth in non-Oil GDP. In the period of the current Government, the sector grew at 4.3% annually, while in the previous period (2004-2006) the non-Oil GDP grew much more (5.3%).This is another fact that one takes into account in the analysis in the success or otherwise of the Government. In terms of attention to social sectors of the country, we must say that there is a difference between what has been stated and implemented by the current Government (2007-2010) and previous periods. We must recognize explicitly that the public resources (current expenditure and investment) directed to sectors such as education and health have grown compared to GDP and inflation, in a significant way. The coverage and attention to Ecuadorian population has been extended and are a success of the current Government, even if one takes into account the differences and the lack of quality found in those sectors. Indeed this has been successful. There have been vast financial resources that have allowed the current Government to fulfill those results even if the infrastructure hasn‟t increased much. The numbers of public schools, medical centers and hospitals have grown very little. But nevertheless, the social sector has been favored from the action of public power. In the area of subsidies, the Government has now extended and intensified them. Our judgment is negative to a subsidy policy based in political realities and patronage. A series of subsidies must be eliminated and have to be focused towards sectors that really need them, but even in those cases it‟s necessary binding them to some other targets. Brazil‟s experience in this area should be analyzed. If the current subsidy policy isn‟t modified, the Ecuadorian State will continue wasting considerable financial resources. These resources must have more efficient and productive uses, such as building more schools, more medical centers, etc. in neighborhoods and poor areas of Ecuador. On the issue of physical infrastructure in roads, airports and others, we must say that the Government has had successes that must be recognized. In terms of national income distribution, social inequities, poverty and wealth concentration, the Government assures that the indicators have improved as the effect of its public policy. We believe that all the announced achievements are completely marginal. In another article, we‟ll write about this topic. Notwithstanding the foregoing, it‟s certain that the economy isn‟t growing, unemployment doesn‟t fall substantially and the level of poverty remains

objectionable. It‟s not possible to hold firmly that these last years have been better than before the current Government.

Public finances and growth; famished alliance

Econ. Jaime Carrera

Excessive weight of current expenditure, the inability to sustain high levels of public investments, shortages of foreign direct investment and lack of incentives and security for private investments, a weak institutionalization and rule of the law; deficient infrastructures, narrow minded attitude towards trade and globalization; low competitiveness and productivity among others, are the adverse factors to the imperative of achieving a sustained and high growth and sound public finances. Budget for 2010

Despite the unanticipated revenue stream, the high oil prices and acceptable tax returns for the payment of the 2009 floating debt and the lack of credits to finance the deficit , in the first half of 2010, the government had to stop the public spending, mainly the investment..Until the end of the year it will be forced to keep the tendency and therefore reduce the deficit. A possible scenario is shown in graphic 1. In the first semester, the oil average price was above $70 per barrel, up $65 considered in the budget. As shown in graphic 1, there were also joined more than $400 million by the safeguard tariffs imposed by additional oil income and

Central Bank‟s profits resulting from gold revaluation. It‟s expected that for the second semester additional $400 million will come in for income tax advances. However these last wouldn‟t be enough to cover the expenditure estimates approved in the State‟s Budget. In the first semester the total expenditure was executed in a 39%, with a higher adjustment in public investment. Restriction despite revenue streams mentioned above. The IEES values weren‟t paid for 40% of pension payments and the items of goods and services were implemented only in 26%. Salaries consumed about 60% of current expenditure. Capital and investment spending largely limited itself to meet the Sectional Government‟s transfers to social spending which was estimated as investment. Because of credit lack and State inefficiency, until the end of 2010, is expected to continue the restriction that total spending could run on 80% of the initial estimate. Capital expenditure adjustments will be higher, about 30%, affecting the attainment of growth targets. Since the Estate won‟t have the dollars to enable meeting the expenditure requirements, it would be forced to reduce its potential deficit of about $ 3.800 million, 7% of GDP, to around $ 1.077 million at year- end, 2% of GDP; even so, it will have to get new credits. In the first semester, the Estate sold $ 550 million in bonds to the IEES and the ADC borrowed $ 250 million. It should be noted that in 2010, nearly $ 500 million of Petro china‟s loan capital will be cancelled and about $ 42 million in interests. It‟s possible finding another process in credit by $ 1.000 million with a Chinese bank to cover the financing gap. Low growth, old fashioned fault

In more than 300 years of colonial period the economic growth was insignificant. The economic activity was reduced to extraction of metals and spices, while in the West, inventions and innovations spread out that lead to the industrial revolution. Since the beginning of the Republic until the end of XIX century, stagnation of the colonial era continued. During 1900-1920 economy thrived, thanks to cocoa‟s high prices, which allowed several advances in road construction and other areas. In the following two decades, the Ecuadorian economy suffered a deep recession by cocoa‟s falling prices and its production; this happened around 1900. Since 1942, economy began its recovery because of new coffee, rice, rubber, wood, etc exportations. However, in those years, Ecuador ranked lowest in exports. In the decades of the 50‟s and 60‟s, GDP grew at an annual average rate of 4.7%, thanks to banana production. In the 70‟s with the rise of the oil boom, GDP grew by just over 9% on average. In the decades of the 80‟s and 90‟s, with low oil prices, economy grew around 2%, just to cover the population growth. During 2000-2006, GDP grew by 5% annual average with more oil and rising prices. During 2007-2009, at the climax of a new oil boom, GDP increased 3.2% annual average, and for 2010 it‟s estimated for the economy to grow by 2.5% (see Table 2) Foreign Reputation, ¡Reputation, reputation, reputation!

The Foreign Direct Investment (FDI) reached a maximum GDP‟s 3% by 2003 (Table 3). With the exception of 2008, since 2006 it didn‟t reach 1% of GDP. In the first three-month period of 2010, FDI shows a negative balance of $ 155 million, because the transport and storage sector has been divested, that is, payments of domestic subsidiaries to their foreign matrix, were higher than the received expenditures. (See Table 4). One part of the Foreign Direct Investment is authorized by the Superintendence of Companies to domestic companies and branches of foreign companies, whose first quarter sum was just $ 71 million. Another part is directly registered by the Central Bank in national accounts. Of the $71 million of FDI approved by the Superintendence of Companies, only 726 thousand dollars were used in the constitution of new companies; $ 69.7 million were company‟s capital increase. From capital increases, only $11.6 million were made in cash; $ 23, 7 million through debts compensation; $ 31.8 million was attributable to reinvested earnings. The FDI is fundamental for the country‟s development and promotion to its growth; however, there is aversion to be part of the club of countries that attract. The ranking of the 25 most attractive countries for FDI 2010 Confidence Index of Foreign Direct Investment from AT Kearney is led by China; Brazil is ranked 4 and Chile 22. Populism is regarded as a deterrent of FDI, the bad karma reputation of Ecuador, which with pain can exclaim the lines of Iago, in Shakespeare‟s Othello: ¡Reputation, reputation, reputation! And all that remains for me is the beast”. Public finance, growth and investment, poor relationship with prospects Public finances are unsustainable in the medium and long term; they turn unfeasible the economic model sustained by the expansion of public spending and investment to sustain its growth. A State Model, moreover dogmatic in assessing its prevalence in economic activity, leaving the private sector a subordination accessory role. In this environment, the prospects are poor to drive domestic and foreign investment decisions. The harmful combination of a public investment with little chance to be sustained, and even worse, to increase, plus an almost zero horizon of confidence for private investment, as a logical consequence will have little opportunity to maintain in the future high growth rates of the economy. The incapacity of using minds to create wealth has cultural roots of more than 500 years and has become secular, protected by populism encouraged under the natural resources. To reduce poverty, generate employment and improve welfare, Ecuador requires supporting for decades, economic growth rates above 6% annually, which is possible with a radical change in the State Model and inherent economic leadership. Countries that have strengthened this direction remain efficient states that as fair arbiters in the control and regulation facilitate and not obstruct the private sector, with which they consolidate the responsibility for economy‟s growth and generating employment, providing it with an atmosphere of confidence to invest and do business. All the above must be done through the unrestricted respect for property and the rule of law, stability and economic freedom, fiscal responsibility, integration to global capital and world trade.

Table 1 DESIGNING CENTRAL GOVERNMENT BUDGET OPERATIONS, 2010

$ Millions Codified In Total Concept Start or June July-Dec 2010 Projection TOTAL REVENUE 12.483 13.091 6.318 6.433 12.751 Tax Revenue 7.624 7.622 3.880 3.908 7.788 Rent (1) 2.543 2.543 1.094 1.449 2.543 IVA 3.121 3.121 1.563 1.558 3.121 ICE 519 519 247 240 487 Customs 836 836 387 449 836 Others (2) 605 603 589 212 801 Oil Income (3) 3.170 3.793 1.816 1.977 3.793 Non-tax Revenues 639 607 273 334 607 Common Transfers (4) 546 548 282 73 335 Others, Self-management 504 521 87 141 228 TOTAL EXPENDITURE 15.191 16.938 6.355 7.473 13.828 Common Expenditure 8.689 9.404 3.862 4.751 8.613

Wages 4.901 5.200 2.278 2.922 5.200 Products and Services 820 903 301 433 734 Common Transfers 2.332 2.622 1.056 987 2.043 IEES, ISSFA, ISSPOL 803 803 124 106 230 Human Development Bond 656 646 316 324 640 Energy Subsidy 256 256 0 256 256 Entities 417 417 368 49 417

Others 200 500 248 252 500 Interests 636 679 227 409 636 Internal 250 293 90 203 293 External 386 386 137 206 343 Capital Spending 6.502 7.534 2.493 2.722 5.215 Autonomous Governments 1.723 1.766 975 791 1.766 Public Enterprises 604 386 69 317 386 Common Expenditure & others (5) 1.700 1.700 456 1.244 1.700 Others 2.475 3.682 993 370 1.363 DEFICIT/SURPLUS -2.708 -3.847 -37 -1.040 -1.077

(1) Includes: $ 400.000 in advance of income tax in July and September (2) Includes: up to $ 145 million fee May safeguarding and $ 118 million for

oil imports. (3) Includes: presale oil, Petro china, and $ 179 million through May. (4) Includes: $ 125 million Central Bank profits. (5) Includes: Social Sectors programs and others are as an investment.

Source: Ministry of Finance. OPF.

Table 2 GDP Growth

Year % Variation

2.000 4.1 2.001 4.7 2.202 3.4 2.003 3.2 2.004 8.8 2.005 5.7 2.006 4.7 2.007 2.0 2.008 7.2 2.009 0.3 2.010* 2.5 Source: Central Bank

IMF Estimate

Table 3 Direct Foreign Investment

Year GDP %

2003 3.0 2.004 2.5 2.005 1.3

2.006 0.6 2.007 0.4 2.008 1.8 2.009 0.6 2.010* -0.3 Source: Central Bank *First Quarter

Table 4 Direct Foreign Investments. Sectors

2010 First Quarter

Sector $ Million

Mining 59.7 Manufacturing 30.8 Commerce 15.4 Transport & Storage -280.8 Other Sectors 19.8 Total -155.1 Source: Central Bank

Promoting Justice for all

Dr. Osvaldo R. Agatiello

Professor of International Economics and Governance at the School of Diplomacy and International Relations in

Geneva-Switzerland

If Freedom was the ordering principle of XVII century and equality of XIX century, the XX century commitment to Justice is violated in the XXI century that started badly for much of Latin America. With all seen from the perspective of long term, much has changed for the better in the two decades that have passed since the end of the Cold War. To begin with, the majority of the region‟s population has lived most part of their life in democratic legality: electoral legitimacy has become a rule rather than an exception. This is the intuitive notion of justice as regularity, consolidated in the social psyche get used to the electoral day. The above doesn‟t mean that there aren‟t abuses or democracies that work badly, if not simply fraud and violence, but what should be done to solving them is clear: to put in prison who believe they are above the law, and the order to return the unlawfully. In the 80‟s when among many political scientists and rulers of the region the illusion that the adoption of parliamentary systems of government at the European style would break the instability inherent within the constitutional presidential systems that Latin America adopted by the influence of U.S. model in the hemisphere and that too often have to choose between governance and legitimacy. That‟s how in many Latin American constitutions, own institutes

introduced the parliamentary tradition of “forming a government” as the heads of government (prime ministers as answerable to the legislature), popular initiatives, referendums and qualified majorities for certain par constitutional laws (such as on to public spending control or electoral regime. It isn‟t rash to assert, that in general, they served in the opposite direction to increase the excesses of executives unaccustomed to the checks and republican counterweights. Because the majority of problems are real and pressing, the discussion now concentrates in the capacity and efficiency of governmental systems to be fulfilled with the mandate of the voters, especially the public goods, physical and legal security and respect for the institutions and legal order. This is a very similar functional legitimacy to the responsiveness we expect to receive from the private sector in the provision of goods and services at reasonable prices and independently verifiable quality. It‟s the intuitive notion of justice as predictability, both in the acts of government and in legal proceedings and commercial transactions. In this area, Latin America has a long way to go. However, even if the advance is incomplete there is evidence of progress. There are countries already consolidated as liberal democracies, which assure the market‟s organization and freedom, and unfortunately still have not resolved the conceptual dilemmas for respect and preservation. There is another area of the righteousness which is still more difficult to achieve and has reopened the discussion of redistribution of wealth with authoritarian arguments that are considered obsolete. Indeed, wealth distribution in the entire Latin America is among the most regressive of the world, even worse than in several parts of Africa and Asia that are fall behind. It‟s the notion of justice as equity, rejecting the coercion that results from the action from individuals, groups or economic systems whose action distributes or redistributes wealth to the detriment of those who are on the brink and opposes the action of the State with public goods objectives. Their most outstanding demonstration is the use of gradual confiscation, through inflation and price manipulation by the government, on behalf of a magical representation of power. The real purpose is to obtain a more rigorous response to the mandate to govern, specifically responding to the demands of justice in a kneeling citizenship reality that wants to be part of reasoned and reasonable solutions, not merely a victim of the whims of power and corruption excesses. Twenty four centuries ago, Aristotle distinguished equality and freedom as the principles of life in democracy, “The safest of the imperfect forms of Government”. However, when identifying justice as the first virtue of political life, he meant that societies that don‟t achieve a practical agreement in the conception of justice –its moral material order – haven‟t got the capacity to organize themselves into political communities. There is more than one way to explain why all the countries south Rio Bravo are underdeveloped although not to the same extent and prospects; members of the G-20 or the OCDE. An expanded vision of justice in this era of

internationalization of life posed by society, in much larger scale and complexity, that community fail to articulate a manifesto of a political agreement –a tolerably fair, constitutional order – that aren‟t able to maintain a useful and sustainable dialogue with the rest of the world. That is, they are dominated by instability, opportunism and contradiction and aren‟t worth as partners.

Entrepreneurial “from head to toe”

Lucy Lazo de Ycaza Owner of “Esthetic Spa”

During the course of our lives as professionals and entrepreneurs, we are faced with different situations that make us reconsider the possibilities of fulfilling our dreams, especially those that emerge from our childhood. It‟s at this point when the story of people like Lucy Lazo de Ycaza, renews the hopes and motivates us to continue our daily work, with the firm conviction that it can be done. She is able and is authorized as a businesswoman from Guayaquil to write in that box in which you have to complete “Occupation”, to place: “making people feel beautiful and special, outside and inside”. She has a wonderful family to which she introduces as her greatest achievement, consisted by her daughter Lucy Daniela and her husband, Oscar Ycaza. Cosmetologist by profession and entrepreneurial heart, Lucy managed to position herself in the competitive and productive Beauty market; she is now the head of a small holding, consisting of Esthetic Spa with 8 years in the market and located in the Bocca Mall in Samborondon. Her School of Cosmetology Rosa Graf served three years since its launch and is located in Entre Rios and handles the representation of many major international brands such as Rosa Graf of Germany and Selverth Thermal of Spain for six and three years respectively, plus Obagy USA firms and Le Beatu of France with a fusion with Argentina.

The great ability and her extensive knowledge have opened the doors to be the official “speaker” representing global brands at local level. The German Cosmetic Rosa Graf was the first line to trust, keeping a sharp lookout to the huge potential of this businesswoman and her passion for cosmetology; her excellent development influenced for Selverth Thermal and Le Beatu, be incorporated into success. Her successful business life is the dream Lucy kept since childhood, and with moments of joy recalls watching her mother using her creams. At home she was the one who was willing to put one‟s makeup, cutting hair, manicure and other related actions which would finally end being her profession. Without doubt her vocation was aesthetics since her childhood as she mentions: “I started studding cosmetology because I felt having a strong predilection since childhood”. There is a part we cannot fail to highlight in this story, and its value is starting to study at 41 years old, becoming a total example of overcoming and motivation, rejecting all coercive stereotypes. A great experience to be considered, whose moral is clear and specific: “when undertaking any action in your life do not limit yourself by any factor, just do it, dedicate and place your heart in every step you make” she added. One great success story has an interesting beginning and this couldn‟t be the exception: the first business was promoted when she was single and was focused on the development of Shampoos and Conditioners after she founded a laboratory which fulfilled a life cycle of 4 years. While this project ended at the same time of being single, she is currently negotiating a cosmetic laboratory of masterly formulas of own authorship. All her actions are strongly linked to aesthetic realm and its services in each one of her businesses have a personalized approach. She‟s a perfectionist and is behind every detail, likes to leave a mark on each one of her customers, not only reflected in her high quality work, but in a more difficult part to reach within each one, always looking to leave them fully satisfied and renewed. This philosophy is one that she transmits to each one of her students in her School of Cosmetology Rosa Graf, which is the only one that offers degree in Cosmetics and is proud to say that it‟s the most complete regarding to equipment; the Curriculum is studied and developed so that the graduates get a relevant domain of the practical and theoretical. Lucy gets involved directly with each one of the tasks. Customization is definitely added value which joined to the excellent used procedures have locally achieved a privileged position in the market. This school has turned into a reference in the cosmetology field at regional level. The history of her continuous achievements goes on and will continue with new projects that are shaping and some dreams which is only a matter of time to start deploying, such as: launching her own cosmetic line and perfume with a view to US market. The level achieved as an entrepreneur has placed her in the local arena as a model for women, and has been invited to participate in the IWF (International

Women‟s Forum) a network in which important women at international level have gathered to discuss and share lessons learned during her working process. She is an independent, virtuous, responsible, courageous, full-time fighter woman; a special person born in Guayaquil to be admired. These are the immediate features and descriptions that arise from those who know her. She is a professional, worried until the last detail about her clients that trust their looks being sure to be impeccable from head to toe.

ELECTRONIC COMMERCE, an opportunity for

MSMEs

Econ. Omar Vigetti Director of Operations Latinvia@

Since long time ago, much has been said about e-commerce and everybodyl clearly sees its growth. But at MSMEs level we should ask ourselves how to turn this sustained growth into opportunity, applying simple and low cost strategies. According to the study commissioned by Visa AmericaEconomiaIntelligence,

e-commerce to consumers (B2C) grew 39.2% in 2009, which allowed it reaching US$ 21.775 million in all Latin America and the Caribbean. And for 2010 it might grow near 27% which would make it close with a total of US$ 28.000 million, certainly not insignificant, especially because it continues growing. This enormous change in the way that clients have to relate with the companies (regardless their size), it‟s intensely incentivized by introducing devises (from PCs, net book, Mobil telephones, etc.) and the strong growth of broadband (both fixed and mobile). Let‟s think that at the end of 2009, there were about 150 million PC users throughout Latin America and 40 million broadband accesses. Other elements that help accelerate the process for electronic commerce expansion are the availability and use of various means of payment, as well as the banking advances, together with all this increased perception of security by the public.

The supply has also done its part. Online management processes, led by airlines, tour operators or large retail chains paving the way for many MSMEs companies evolve their business models on Internet. From a simple search, through a comparison of prices and supplies, to the closing of a transaction offline or online, it appears that electronic commerce is a reality that generates increased turnover of all enterprises that incorporate it as part of a Multichannel strategy.

Diverse investigations or studies reveal that online advertising and electronic commerce are important in increasing value of MSMEs in the region, which not only already have their own websites, but also showing steady progress towards the adoption of online tools (from having online catalog to the closing of transactions). Another important element is that the majority of MSMEs understand that Internet has impacted significantly on the productivity of their businesses, as well as in reducing costs and expenses, and have also observed and confirmed the power to publicize their products and services outside borders of their countries, especially those working in “niche markets”. However, there is still a big margin to continue working and improving. Here are some tips that can help MSMEs in the assembly of a multichannel strategy, beginning with its very definition.

1. Multichannel Strategy: The means or channels of access to the company and its offer are multiple. Each client buys using the most convenient, attractive, simple lower cost means, or where he feels better. He might go to our local “physical” shop. He might buy through our web site. He might visit our website, compare and only then go to our shop. He might use his cell phone or he could have seen a graphic or online advertisement and finally buy through any of the means offered by our company.

The important thing is that everything has to be within reach of our customer “the king” and he‟ll choose. Therefore, it‟s critical that our MSMEs understand and apply a multichannel strategy. It‟s simple, easy and low cost. We must only watch and be creative. We must focus on creating a proposal that meets a real need and figure out how to multiply the scale to define and enable that the customer buys from us, where, when and how he desires.

2. Our website. Once the strategy is defined, we must clarify what the

purpose of our website is, as this isn‟t an aim within, but a means within the aim, which at the end is our purpose and business.

We must think based on our customers, suppliers, distributors and other components of our value chain. This approach ensures that the site can run

good the operations we need. Equally important is that the site is functional, that is, easy to handle to receive prompt and clear access to the mentioned sectors - such as “the same contacts”, “shopping carts”-. First of all, it‟s important to ask ourselves what the user is looking for, what is that he expects finding in our site, what information is relevant for him to take what he wants.

3. Income. A well implemented, measured and controlled multichannel, improves our income, because we are offering our customers, diverse alternatives to be able understanding the campaign, all the products and services which are available, and buy them where, when and how its desired. For it, it shouldn‟t only have attractive products and services, the prices our customers want, but I also must offer the greatest variety of payment for the transaction to be carried out and collect revenue.

4. Traffic generation: A variable that is directly associated with the

success of our business online, is the number of visitors and users it has. How can we be found by them in the net? How to attract them towards our business? What to do to transform this into continue purchases? Tools such as Google and marketplaces such as Mercado Libre have a key role in our multichannel strategy. This is important to attract people in the website, generate queries and/or sales, whether they are realized online or we bring our customers to shop at our “physical” shop.

5. The scope. In Internet our business hasn‟t borders. That‟s why it‟s important to be aware of our business strategy. In Internet, the amount of people that accede to our website is generated by ourselves and goes beyond geography and spaces. Therefore, we must consider the region in which we want to grow, taking into account the languages and customs, habits of consumption, the means of payment, logistic, etc and think how to move forward in our process in stages.

In this brief series of tips there are two simple things that have to be mentioned and for being obvious are frequently left aside:

1. We shouldn‟t be afraid of PROOF and ERROR.

2. It‟s necessary for us to evaluate always all the information from the interaction with the customers, to be able to correct and make business decisions.

All our MSMEs must continue striving to take every day more advantage of tools such as Internet, as well as the application of technology in general, especially such as:

1. Build confidence and position permanently OUR BRAND. 2. Build sustainable competitive advantages. 3. Active and creative marketing through searchers, directories,

participation in events, fairs, exhibitions. 4. Use of other sites as transaction markets and social nets to start

businesses. Finally, a multichannel strategy demands our MSMEs to adopt a continuous capacitating attitude about these topics, because the current generation that has been born and is growing with computers and cell phones already connected to Internet, will demand products and services through this means. In fact, it‟s already happening if you take into account –just as an example – those children between 8 and 13 years (called “teens”) influence 43% of household purchases, even when it comes to adult products. So, prepare yourselves and move forward with these strategies and tactics, which more and more businesses….and therefore MORE INCOME, are waiting for our MSMEs.

Democracy Vs Dictatorship

Econ. Otto Sonnenholzner Director General Radio Tropicana

It seems incredible that in 2010, we continue discussing something that requires only common sense to be able defining a position. Democracy Vs Dictatorship

History by itself should answer us. From it we should learn avoiding the mistakes of the past to construct the present and design the future. Democracy has failures and many leaders have found it easy disguise of democracy, political processes whose only democratic merit was at the polls. There the importance of highlighting that the universal suffrage is only one of

many elements that conform and strengthen democracies. We could say that in the democratic process, in terms of citizen participation, expressed in the polls, but they are reinforced key elements such as respecting a Constitution that represents a national agreement between all and accepted by all and that also limits the power and controls various formal operation of government, constituting a Rule of Law that shields institutionalization.

Lord Acton already said it at the end of XIX century: “Power corrupts, and absolute power corrupts absolutely”; the truth of this phrase has been confirmed in practice and historical experiences have led societies to include the concept of separation of powers in democratic models, to avoid not only the absolute

power, but also the power to control the same power. The existence of several political parties that adequately represent the different options or trends in a given society, with clear ideologies and open to citizen participation, is also essential to strengthen a democratic model The alternation or succession binding is essential for democracy, usually enforced by a Constitution that limits the re-election spirits who aspire to die in office. Alternation not only allows that general elections at some point be given equal and not against the candidates in Power that could abuse for their re-election, but also forces to refresh people within the parties and motivates the militants in the hope that any time they also be candidates. Of course there must be a permanent fight for the respect to individual and the minority’s freedom, avoiding dictatorships of the majorities. The freedoms of speech, press and Association are fundamental for a fair Democratic Estate, and it must be a priority for any democratic government to defend those freedoms. Those, who in Power claim that democracy, can exist considering the items listed above, only in part or in a demagogic way, lie on convenience and are the

ones who have betrayed their belief, if they ever had one, in exchange of their convenience. These components of democracy are enough arguments for the citizenship to expose those who insist that winning elections is sufficient explanation to justify any action, on the grounds that their actions gained legitimacy in the polls. That is to say, it‟s not legal but it‟s legitimate? A society that allows the State of Right to be violated under the excuse of any electoral victory or of popularity is a society that‟s not enforcing its democratic model that allows the lead of populism or political processes of the country, demonstrating that they still have much to learn about their political decisions. It‟s shocking for me seeing like Cuban leaders manage to convince the islanders and other supporters in the region, that the model of Castro is a role model and many enthusiasts dedicated to the Castro regime repeatedly say around the world that the Cuban model in health and education is unbeatable and that in the island there isn‟t mendicancy. How successful can an education model be if in more than 50 years they cannot find a release of power than Raul and Fidel, that is, the Castro‟s have failed forming anyone better than them? Can you call that a success? Is the Cuban model of democracy? The seriousness of the whole matter is that there are young leaders in Latin America who want to defend that and even admire and follow the Cuban situation in their countries. It‟s true that democracy has its flaws, as Winston Churchill said in 1947 before of the House of Commons. “Democracy is the worst form of government except all those other forms that have been tried from time to time”. That is, if we like it or not, democracy is the best option that men have developed until now as a model to achieve that human beings of diverse origins, belief and interests, are able living in relative harmony under a State model, in a framework of solidarity and respect. There are several flaws in democracy; Political Science identifies three as the main ones: Plutocracy, which is unbalanced influences in decision making in favor of a few who hold certain forms of power, for example, by inadequate financing of campaigns and political parties. The Party, Partidocracia (a government of one or more parties), an old acquaintance of our country, caused by a misguided legislative model which gets through the influence of certain political parties, directly influence the decisions of a President elected by the citizenry. And the mob rule which is rarely discussed but could be the most common in our region, is a powerful demagogic action shielded by the existence of popular ignorance or a leader shielded under a false governance argument. I think that there is much to be analyzed about this topic, but truly Oscar Arias, Costa Rica‟s former president and Nobel Peace Prize, in brief words gave us an important lesson of democracy in the following quote:

“It mustn’t be confused the democratic origin of a regime with the democratic functioning of the State. There are in our region governments that rely on the election results to justify the desire to restrict individual freedoms and persecute their opponents. They use democratic mechanisms to subvert the foundations of democracy. A real democrat without opposition must create it. He demonstrates his success in the results of his work, and not in the product of retaliation. He demonstrates his power by opening hospitals, roads and universities, and not restricting freedom of opinion and expression. A true Democrat shows his power by fighting poverty, ignorance and insecurity, not foreign empires, secret conspiracies and imaginary invasions.” Oscar Arias

Oil continues falling

The best way to evaluate the performance of an administration is comparing it with its competitors. In the case of the oil sector, production is a complex process that takes long for the different phases that are included, therefore an efficient administration is vital to increase production. If we compare the oil production of Petroecuador and our neighbor, Colombia, we can observe that in January 2007, both countries produced approximately 515 thousand barrels per day; however, three years later, the production differences are important; Colombia to April 2010, produces 776 thousand barrels per day, while Ecuador only 522 thousand per day, almost the same amount than three years ago. In a world of high oil prices, this production differential has a huge opportunity cost because those revenues can be used for hospitals, schools and roads that the country badly needs.

Oil Production (Thousands of barrels per day)

Source: BCE, ANH

The explanation to why our production in comparison to Colombia is less, can be found in the amount of Direct Foreign Investment that every country captures in the oil sector; in the case of Ecuador, between 2007 and 2009, we captured US$ 134 million, while Colombia in the same period of time US$ 9.358 million. Ecuador rejects investment with its legal insecurity, while Colombia thanks to its stability and clear legal rules, and attracts investment.

IED IN OIL (2007-2009) (In US$ Million

Source: BCE; Bank of Ecuador