Ralph J. Watkins, vice president of Surveys and Research Corporation, directed this study for the National Economic Planning and Coordination Board of the Ecuadorian Government. With the aid of competent specialists, he obtained a very thorough documentation from every available source of information, including field work and extensive interviews. Beginning with a brief examination of Ecuador’s few significant exports, this study proceeds “to determine the adequacy of the resource base, to appraise the effectiveness of production, to identify barriers to more effective performance, and generally to analyze the prospect for continued or enhanced export volume” (p. 10). Since 94% of Ecuador’s total exports comes from agricultural products,—84% of them bananas, cacao, and coffee—diversification is highly desirable to expand total exports and to minimize risks to the economy.
Ecuador’s abundant supply of fertile, still uncultivated lands, good climatic conditions, accessibility to the sea, coastal waters with rich fishing grounds, and low-cost labor place it in a highly favorable position to expand very substantially the output and hopefully the marketing of her traditional exports. This report strongly recommends that Ecuador should also by all possible means develop new industries to process its raw materials for export and thus multiply the values involved.
Aware of the inadequate managerial and technical talent, efficient organization, and especially capital as limiting factors of development, the author recommends attracting foreign capital investment, preferably by well-established firms which could bring their own managerial personnel and technicians for the period necessary to train nationals. It also recommends that the Sierra provinces, which are hardly exploited at all, be given much more attention in the search for additional export products than the tropical lowlands, where almost the entire export production comes from. Major opportunities for expansion and diversification of exports are found in using the whole banana plant; an integrated meat processing industry; expanded dairy and fishery industries; processing fruits and vegetables; and making chocolate and other confections, containers, and sugar cane products (mainly alcohol).
Serious obstacles stand in the way of achieving these projected goals, such as the need for easier access to loans, a better transportation system, storage facilities, adequate sanitary inspection services, quality control and grading inspection, research and development, and direct export promotion. The author does not appear to be overly optimistic about the projected American, European, or Japanese imports from Ecuador. In the United States, by far the greatest importer of all, the potential market increase may be limited to population growth only, since the per capita consumption has already reached saturation point. In Europe E.E.C.’s high tariffs and preferential treatment to former African colonies may limit imports from nonassociated areas. Ecuador’s best chances are said to rest chiefly on the prospects for the Latin American economic integration movement, in spite of the fact that it faces parallel production in many other ALALC countries. Projections for 1973 call for the traditional exports to grow at an average yearly rate of 5.4% in 1962-1972, and the aggregate exports at a rate of 6.9% per annum, which indicate that Ecuador’s formidable task of achieving a rapid rate of economic expansion is attainable.
The last chapter presents a fine summary of the findings and projections, together with specific recommendations, and the book ends with a very handy and useful statistical appendix of 107 tables covering trade statistics on 16 commodities. Unfortunately none of the statistics quoted anywhere throughout this report is dated later than 1963. Projection studies must of necessity be quite “iffy,” and this one is no exception. Unpredictability of world supply and long-range price trends make any attempt to assess the potential export volumes and values conjectual at best. But this is a sober, clear, logical, and systematic study of great value to the economic development planners, the historian, the economist, the Latin Americanist, and any potential entrepreneur.
