Friday, February 3rd, 2023 18:58:44

India-Ecuador Season for Peacock-Hummingbird Duette!

By Dr Jyoti Kiran
Updated: August 18, 2022 10:46 am

Ecuador celebrates its independence day on the 10 th of August. Feliz Dia  de la  Independencia!

The country has a captivating and complex  history: from the period of Integration and arrival of Incas to the Spanish Colonial era ,the Independence struggle , Gran Colombia to the Republic of Ecuador.  The journey has many familiar shades, textures and  tones that are similar to Indian history   Colonial past , sure!

Yet, perhaps the modern history of the country is even  more intriguing  where the aspirations of the citizens of a  civilizational state, despite its divisive politics,  complex plurality and   critical economic  challenges , strive and    struggle to  preserve and institutionalise democracy. It is unique!

In that context, victory of the CREO party  perhaps is a turning point  in the politics of the country  . Ecuador is gradually emerging as a stable  economy with a promising future under the leadership of President Guillermo Lasso.  Despite the obvious challenges and legacy issues, he seems to  be having a clear blueprint  in his mind for the socio-economic development of ecuador.

In His book ‘Carta a mis hijos ‘or letter to my children, he strongly advocates that the  government  should devise plans and policies to develop the potential of its citizens. His pragmatic approach was apparent from his address at the US chamber of commerce’s 2nd global forum when the economy was just recovering from the pandemic with a comprehensive vaccination drive.

“The decisions of my government are made progressively and on a scientific evidence basis, in that way it’s possible to correct the direction if necessary. Nevertheless, it is essential to think ahead with optimism and enthusiasm.”

The same attitude of progressive democratic dialogue for  building peace and consensus  was reflected in  handling the recent protests too.

His promise to reduce government’s unproductive spending while enhancing governance resonates Prime minister Modi’s agenda of 2014 in some ways.

Good intentions and pragmatic approach  generally lead to good governance. So Ecuador’s current political environment looks conducive for  enhancing investors’ confidence.

From the  neo-liberal welfare ideas and innovative policy metrics, it looks like the country is determined to not only emerge as a  stronger democracy but also as an economy which is committed to  structural reforms, judicial reforms, free market and  a recovery with equality.  Speed might be slow due to the  inherent and obvious socio- political factors, yet the direction is correct!

Eighth largest economy of Latin America with a GDP of USD..192.8 and USD 11009 per capita income and around 18 million population, Ecuador has a dollarised economy. With reduced fuel subsidies and with ongoing financial reforms , inflation is moderate and the macro indicators are comparatively stable  to attract investment.

However, the trade  and cooperation potential between India and Ecuador , which may lead to multiple mutual benefits  through the  unique complementarity of the nature of economies,  has not been fully explored. Shared vision for the new world order and democratic governance  facilitates a conducive environment for deeper mutual cooperation and commerce between the two countries.

PM Modi’s recent emphasis on promotion of 3Ts at the state level-trade tourism and technology- might re -energize  India’s efforts to engage more with  the LAC region at the state level and Ecuador has a distinct opportunity here.

I have earlier written about the benefits of focusing on the LAC region overall ,especially at the state level.

Though  Ecuador has seven preferential agreements with around 284 non-tariff measures and a growing financial services and banking sector, which generally boosts trade, yet its  actual  trade potential with India  remained relatively subdued till 2015 especially compared to PRC. It took us a long time  to recognise that the country of orchids has much more to offer than panama hats!  Also,India was not perceived  earlier as an active technology provider  in Ecuador. But the perception on both sides is changing and the engagement is gradually increasing.

Ecuador has moved forward to become a major exporter of Petroleum oil, Bananas, Flowers and Crustacean and minerals and has shown active interest in technology oriented trade. The Indian corporate sector has also responded positively.  A few companies like Tech Mahendra,TCS, MSN labs,Cipla, Sharda. Cropchem, Hero Motocorp, Bajaj, Sonalika etc have presence in Ecuador. Yet to my mind the Indian investment and commercial potential needs to be examined at a wider scale and  with better speed. Various chambers of commerce and confederation  and federation of Industries have made some efforts in this direction, but a  more systematic and comprehensive effort is required. The impediment of distance and logistics is  less  relevant now looking at the complimentary nature and comparative advantage patterns in both the economies. More  trade  translates into more jobs.  Thus more collaboration  here means mutual growth and employment.  Equation fortunately is linear here! And I am not even talking about the geo -strategic advantages of expanding the  Indian presence in the LAC.

So what were the constraints that attributed to such slow progress?  .Before 2014, the lethargy can be summed up in one sentence. Distance, diplomacy and dilemma. Lets review that.

India  and Ecuador established diplomatic relations in 1969.The embassy of Bogota is concurrently accredited to Ecuador. Ecuador’s embassy opened in New Delhi, got discontinued and was   reopened in 2005. From April 2018 to Oct 2020, some sideline meetings and tele-meetings took place on increasing cooperation in the areas of business, health and extended development partnership.Some High level bilateral visits have also taken place at the level of MoS external affairs and other ministerial levels.

After the Joint Economic and Trade committee in 2015 and the protocol on the joint feasibility study for PTA the commercial relationship is  certainly getting stronger. The bilateral trade has picked up from USD 553.92 in 2016-17 to 1143.98 in 2021-22. And the nature of trade also has diversified.

India exports vehicles, iron and steel, pharma, chemicals, cotton etc. And imports mineral fuel, wood, coco, hides, zinc, rubber, manufactured items etc.

Under the leadership of  PM Modi, in recent years, the efforts to increase trade and commerce have been intensified and technical cooperation has also been growing. But as mentioned earlier, progress is  less than expected.

Thus, an altogether unorthodox approach is needed along with the ongoing efforts in the  conventional sectors. Following ideas may be explored. Viability studies  can be conducted even at the state level.

First, a huge collaborative effort can be made in the area of Education and skilling. With new education policy  in place in India, its international orientation, expansion of digitization, affordable cost, and plethora of collaboration  spaces are viable . This should be taken up with some consistency and velocity. Hybrid courses, apprenticeship and possibilities in AI, Pharma, agriculture and horticulture and petrochemical are some areas where joint efforts can be made at the higher education level almost instantly. Quality education in English medium is one of the primary requirements of  the growing higher  middle class  in Ecuador where India can develop an ever expanding credibility. Research collaborations will then be a natural outcome. And the relevant sectors will automatically evolve.

Another  such sector could be  the circular and green economy where India can provide technology, solutions,capacity building and institutionalisation. Ecuador is the first country to provide constitutional rights to the environment. Thus, the green,circular economy and renewable energy are big areas to probe and develop for Indian  investment and start ups. Many sectors  where immense benefits are projected have not even  been examined  in depth.

Just to give a random example, Indian printing  technology and  sustainable packaging industry has huge scope in Ecuador just because of its lower comparative cost.  Ecuador has resources and we have affordable technology.Same is true for the   urban utility industry. To sum up unlimited possibilities of professional connectivity, joint research and technology development do exist in several unconventional fields. A rare combination of  both competitive advantage and complementarity  is present.

Make in  india initiative has been introduced in the LAC region   in the recent past to explore such untapped opportunities . Intensified efforts should be made for  the MSME and start ups  too. Especially at the state level. Ecuador could cater to the growing demand of the Indian middle class .  From its best roses in the world to cocoa beverages, new varieties of fruits, spices and  processed food, India is a huge and growing market.

India has much to offer in service, governance, technology and management sectors. The Modi government’s greatest achievement is  financial inclusion of its marginalised population, formalisation of business of the government  along with DBT and procurement reforms. Ecuador  may need these e-governance expertise   and supporting mechanisms . If India can customise the know-how for their ecosystem  a whole range of avenues could be discovered in this direction too.  From telecom to fintech solutions and capacity building in e -governance,  financial inclusion  and urban governance india could be an affordable provider and  reliable collaborator. But the conventional model of trade and collaboration may not bring desired results. Fresh and innovative models are required.

Apparel, handicrafts, jewellery, minerals and  furniture could be some areas where trade can be fuelled and expanded. Likewise defence, biotech, space have  already been explored and  may need more strengthening.

Pharmaceutical industry too  has a fair presence in Ecuador. Yet it needs a whole new range of  reforms to enhance the ease of business.  Again, the emerging area of indigenous medicines Ayurveda and wellness has a growing interest and market. Organic cosmetic industry could be another such area. As  I said earlier, creative thinking is needed for exploring new frontiers.  Even different time zones can be used for advantage when it comes to certain service sectors. Comparative advantages  in energy and food security were appealing trade logics, yet trade should not be confined in these areas only . Many new areas and models  await  imagination and  initiatives.

But the most important fact now! The biggest hindrance is the absence of a cultural bridge. Why should we only focus on commerce? Countries are not just markets. Commerce without cultural connect is always less sustainable . Ignorance about each other has not been bliss here. Decades  of opportunities of growing together have  been lost despite similar values and shared democratic  vision.

Indian’s ‘academic’ knowledge about Latin America starts from Mexico and ends at Brazil. I have not come across any  mainstream history department teaching the history of Ecuador. Even  literature!  The best international studies departments also do basket-courses keeping Canada, North and South America studies packaged together which doesn’t make sense anymore . I could never understand how  Latin American history ever was perceived less relevant than European history ?

Again, I suspect if any university is offering india studies in Quito or Guayaquil.  Gap is huge. Even most well -read of us know nothing about the works of famous authors like Raul Perez, Marco Antonio, Francisco Proano or Vladimir Rivas whose story telling style (eg Intimate Visit) is much similar to the Indian style.

Nor have we heard about the music styles Passillo or Sanjuanito in any of the music festivals in India. Folk music of Ecuador has a strange similarity with the music of the north-east. No fusion was ever produced!

Familiarity leads to understanding and later friendship.Indian Embassy in last few years has done commendable job in  Ecuador in this direction from  organising Yoga weeks to Gandhi katha to gastronomy festivals. We anticipate more Equdorians will visit India in coming years.

Likewise  hopes are high in New Delhi from the newly appointed ambassador H. E. Teodoro Maldonado, an erudite scholar himself, who  has deep interest in Indian culture, art ,music and philosophy.

And while the friendship evolves, it is the right time here in India to  include Galapagos island, where Darvin discovered his theory of evolution, in the  Indian textbooks, with a better reference to the country where it exists . And by the time we build an ecosystem for collaboration on  the capacity building for financial inclusion technology , the environment is just apt to include a chapter on 132 species of the hummingbirds that are found in Ecuador when we next upgrade our courses in biodiversity.

With informative presentation and moderate selling Ecuador could be the dream destination to attract Indian higher middle class  younger tourists , biodiversity explorers and volcano enthusiasts. Distance  too will be an attraction if connectivity is better and journey is made interesting.

Spiritual tourism to India is on increase yet our monuments and history narrative need better presentation in Quito and Guayaquil and other major cities . We certainly need better connectivity for all this.

Pandemic changed the world forever. It taught us some unusual, unprecedented and difficult lessons.  World can not be conceived and comprehended in the shape of the  isolated contours and continents anymore.

Unexplored terrains  may need to be explored in difficult times as conventional connections might not be useful or  not even work. And thus distance is only a contextual concept.

Physical distance may be imperative even with neighbours  sometimes while completely irrelevant in some other contexts. Else India would not be able to send humanitarian and medical assistance to the other end of the Earth in those challenging times .

Mental distance between the  continents needs to be bridged by  insight .By forging people to people and cultural connects. This requires intention, ingenuity and imagination. New dulcet tones will intuitively evolve. Season is just right for a hummingbird- peacock duette!


By Dr Jyoti Kiran
(The writer is ex-chairperson, finance commission, Rajasthan)

Comments are closed here.