SEATTLE, Washington — Toward the end of 2019 and the start of 2020, the Trump administration had been working to strengthen U.S. relations with Ecuador. These efforts for better relations have manifested as greater financial investment in the country of Ecuador, an investment in the development of Ecuadorian people and businesses as well as the development of specific plans and strategies to address key areas in need of improvement.
Investing in the Women of Ecuador
Ecuador has committed to the White House-led Women’s Global Development and Prosperity Initiative by agreeing to come down hard on discriminatory practices against women, especially when it comes to gaining access to credit. The U.S. has agreed to assist in this process by expanding the size of its Academy for Women Entrepreneurs in Ecuador by training 1,000 women in each of its 24 provinces in business skills and networking, in order to help them become successful entrepreneurs.
In 2019, the U.S. Overseas Private Investment Corporation, now known as the Development Finance Corporation (DFC), committed to a $100 million loan to Ecuadorian bank, Banco Pichincha, with the intention of supporting women-led micro, small and medium enterprises in Ecuador. The money is expected to reach 53,000 female entrepreneurs in a period of five years. The investment comes after the DFC already committed $160 million to help Banco Pichincha “support mortgage loans and women-led micro-enterprises.”
The money is vital because of the large credit gap that exists for micro, small and medium enterprises in Ecuador, especially those owned by women. Research done by Goldman Sachs shows that closing the gender credit gap could increase per capita income in emerging markets by 12% by 2030.
These smaller enterprises are responsible for nearly 40% of the country’s workforce, lacking an estimated $18 billion in credit. Women own nearly 14% of these smaller enterprises.
In June 2020, the DFC approved $1 billion worth of investments to go toward emerging economies across the globe. Some $92 million is marked for a loan to Banco Guayaquil, to improve credit access for smaller enterprises in Ecuador, with at least 50% of the loan set to go to women-owned enterprises. Another loan of up to $150 million is to be sent to Banco Pichincha to provide long-term financing to combat the credit gap faced by women, which has only been exacerbated by COVID-19.
Speaking on the importance of investing in the women of Ecuador, U.S. Ambassador to Ecuador, Micahel J. Fitzpatrick stated, “Developing the economic potential of Ecuadorian women, who work on average, 20 hours more per week than men, will benefit all Ecuadorians. The loans that result from this financial agreement will boost women’s ability to provide for their families, improve their communities and contribute to the economic growth of Ecuador.”
Attracting US Business
President Trump and President of Ecuador, Lenin Moreno, have been discussing ways to strengthen U.S. relations with Ecuador by more deeply integrating their economies. This includes plans to work with Ecuador to improve its public infrastructure as well as its connectivity and cybersecurity. The U.S. Agency for International Development (USAID) has been providing $5 million in the effort of strengthening Ecuadorian democracy and governance. Additionally, the Treasury’s Office of Technical Assistance (OTA) is working with Ecuador to improve its public-private partnership programs as well as help the country strengthen its capital market and properly manage its debt. By creating a more stable and secure infrastructure system, U.S. businesses may be more inclined to expand into Ecuador.
Improving Security in Ecuador
Another critical way in which President Trump has been looking to improve U.S. relations with Ecuador is by helping President Moreno cut down on organized crime. On its end, Ecuador has agreed to implement the Automated Targeting System-Global, which will allow U.S. officials to help Ecuadorian officials identify whether passengers or crew members should be subjected to additional screening prior to entry or departure from Ecuador. The U.S. is also taking measures to assist in combatting money laundering in Ecuador. This effort will involve multiple agencies from both countries targeting the money laundering activities of drug-related criminal organizations in Ecuador.
The U.S. also intends on providing $250,000 toward the efforts of establishing a Conventional Weapons Destruction program which will include training on how to properly dispose of and store guns and explosives. Furthermore, the U.S. will be continuing to provide foreign assistance to Ecuador in order to improve its cybersecurity.
The Trump administration also has intentions of providing $7 million through the Department of State’s Bureau of International Narcotics and Law Enforcement Affairs, to strengthen Ecuador’s criminal justice and law enforcement capabilities in the fight against drug trafficking and other organized crime. While Ecuador might not be known for drug cartels, one-third of Columbian cocaine ends up traveling through Ecuador on its way to the U.S. and elsewhere, making these efforts to crack down on drug trafficking and money laundering critical for the safety and security of the U.S. as well as Ecuador.
A successfully growing relationship between the two countries is clearly evident from these endeavors. Efforts such as those between the United States and Ecuador set an example for other countries and are encouraged in order to strengthen global ties throughout the world.
– Scott Boyce