Background:  Divisions between Ecuador’s economic elite and the country’s productive sector and underclass, have produced deep distrust and economic policies that do not serve the national interest.  The productive sector is limited by a lack of capital and a lack of mature value chains to improve productivity and competitiveness.  The Productive Networks Program tackles the root obstacles to trade and investment-led growth in Ecuador by developing progressive leaders from a wide spectrum of stakeholders, including local government, private sector associations, civil society, rural producers, and academic institutions.  These efforts will lead to constructive new policies through new assumptions about the costs and benefits of growth, and an understanding of how diverse interests can work collaboratively.  The productive sector is supported by a loan guarantee program, investment attraction, and direct assistance to economic clusters that can increase full-time, formal employment.

Objective:  The purpose of the Productive Networks Project is to create conditions for investment led growth in Ecuador through establishment of a nation-wide network public-private economic development associations, to create new employment in promising sectors, and to support pro-growth and pro-competitiveness policies. 

Activity description:  The Productive Networks agenda has four interrelated components: (1) creation and strengthening of a public-private economic development council; (2) policy reform work related to private sector development and competitiveness; (3)  creation of jobs and increase income through increased competitiveness; and (4) communications support reforms and disseminate information on Red Productiva activities.

Results as of 2007: A major accomplishment was the creation of the Ecuadorian Committee for Territorial Economic Development (CEDET) as a representative entity to promote economic growth. Assistance also included helping create an Ecuadorian coalition that lobbied to modify draft legislation that would have undermined years of triple-digit growth in the micro-finance sector.  Because of its broad representation, CEDET has legitimacy to conceptualize, prioritize, and advocate on behalf of society-wide economic interests. In parallel and in support of this policy-focused role, the Program and the Council are supporting discreet productive activities in 15 potential productive cluster activities, including leather goods, Panama Hats, dairy products, cocoa, apparel, horticulture, and eco-tourism. A $13,250,000 Loan Guarantee agreement with three commercial banks support value-chains for micro, small, and medium-sized producers in the agricultural, agro-industrial, industrial and tourism sectors. 

Major expected results through 2008: CEDET will be further institutionalized and will become a key actor in policy debate. At least 6 policy initiatives coming from CEDET to respond to the needs of private sector will be accomplished. Ten productive clusters will be implemented creating more than 500 jobs. At least 750 SMEs will have successfully accessed bank loans or private equity as a result of USG assistance.

Partners: National Council for Regional Territorial Development (CEDET)National Council of Productivity and Competitiveness (CNPC)Corporation for Export and Investment Promotion (CORPEI) 

Implementing partner: IRIS/Carana 

Project duration: Two years (2007-2009)  

Investment: $6.9 million 

Contact: Thomas Rhodes, USAID/Ecuador, Tel. (593-2) 398-5367, This e-mail address is being protected from spam bots, you need JavaScript enabled to view it