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The Political Situation in Ecuador

There are many concerns about the political situation in Ecuador. The government has taken a seemingly anti-business, anti-investor, anti-freedom stance over the last several years. Implementing an assortment of taxes, rules, and regulations.

High import taxes, a capital flight tax, and burdensome regulations have made Ecuador a place where running a successful enterprise has become increasingly difficult.

These moves have been costly. Many wealthier Ecuadorians have decided to keep there capital in places like the US and many investors are hesitant to commit capital to Ecuador as a result of the administrations moves.

We ourselves have been affected by the changes. Ecuadorians are largely skittish to purchase real estate given the current climate and we’ve had more than one deal fall apart with the buyer citing concerns over the political situation.

It is a concern I share. Rafael Correa seems intent on gaining control of all aspects of society, business included. More cops, more agents of all kinds, more government, rules, regulations, censorship, taxes, etc. All things I am opposed to.

So why am I in Ecuador, investing in land, running a business, and not running for the exits?

A few reasons.

The story remains intact. Cheap, fertile land, water, great air, lack of investment capital, great food, people, and infrastructure, etc.

Ecuador is just a wonderful place to live. The quality of life here is fantastic.

The political winds have changed. Correa is still in power. However he has become a bit of a lame duck. His socialist policies combined with his brash and charismatic style have stopped working. The people are now squarely against him. He can no longer push through his agenda. This was evidenced recently by two new tax proposals, which massive countrywide protests forced him to shelve.

Fear creates opportunity. This is a buyers market. The whole country is for sale, and there are very few buyers. At the same time, it’s a country being discovered internationally. It’s a country changing. Recent massive infrastructure projects have made its infrastructure on par with any. There is huge room now for growth in tourism, investment, real estate, and business. It’s a new market, with all the fundamental factors and anecdotal evidence pointing towards good years ahead.

So am I concerned? Yes. If Correa, or those of his ilk, were to have there way on a more permanent basis, would I stay here? Probably not. However from my standpoint it is clear that the will of the people and the political climate which gave way to the policies of Correa have shifted.

I can’t predict the future, and I don’t know what will happen. I will say, from my vantage point, besides from this being just a wonderful place to live, the opportunities are plentiful, and the risk-reward very good.

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