The Influence Of Flowers On Ecuador’S Gdp

The influence of flowers on Ecuador’s GDP

“Inflation is like sin; Each government complaints, but each government practices it.”Georg Christoph Lichtenberg

What is GDP?

The gross domestic product is a macroeconomic magnitude which is responsible for expressing the capital collected from the production of goods and services in the final way of a nation or region in a certain time stage.

Characteristic:

• In GDP only the final production is taken into account, but not known as average production.
• Since GDP is a magnitude of flow or current, it is calculated based on the goods produced during a certain period of time.
• So that to calculate the GDP, it has to be first multiply.
• So it can be concluded that a State would increase its GDP only with the increase in prices of different products or services.

According to the Economic Complexity Index (ECI) Ecuador occupies the number 69 as an export economy globally and also has the 102nd position as the most complex economy. In 2017, Ecuador imported $ 19.3 billion and exported the same amount of money, GDP reached $ 104 billion and GDP per capita reached the sum of $ 11.6 thousand .

The analyst Luis Luna, conducted a study for the College of Economists of Pichincha in 2011, where he states that Ecuador could get a GDP of USD 63.Constant 000 million until 2020. However, he declares that to achieve this goal, the Ecuadorian State must make an effort, since the annual rate should be doubled, having a 10% growth.

In these last three years, the Republic of Ecuador has achieved a growth of up to 4%, according to statistics from the Central Bank; So to sustain this rate, the government has formulated change the productive matrix.

The Florícola sector is very important within the Ecuadorian State. Flower exports are not something new, on the contrary, the first farm with crops with the purpose of exporting flowers has been recorded in 1982. Also on November 22, 1984, this is registered in the General Registry of Associations of the Ministry of Agriculture and Livestock the Association of Flower Producers of Ecuador, Expoflores. This foundation was created with the purpose of obtaining funds by the National Financial Corporation (CFN).

Since then with both economic and social aid by the CFN, this sector obtains greater efficacy in the 1990s, this thanks to the commercial opening policies that are facilitated in these years. An example of this is the Andean Tariff Preferences Agreement (ATPA) that was signed with the United States in December 1991, which greatly helped the Florícola sector, becoming 300%. Continuing with the agreements, in 2002, the treaty of Andean Trade Trade Promotion and Drug Eradication Act (ATPDEA) was signed which was valid until June 2013 since Ecuador partially and mandatory this agreement this agreement.

In this way, the evolution and development of the export of flowers can be constituted; There are many factors that verify it such as the hectares used for their cultivation. A small comparison is shown in 1996 since at this time 1484 were used.96 hectares of natural flowers, while in 2006 they were 3440.65 hectares which were used for flower cultivation. (Expoflores, 2013). In this same way, together with this evolution, it has also been improving its exports, which have had a remarkable improvement; For example, in 2007 the export of flowers was 473 million American dollars in the meantime 2012 ended 740 million dollars in fresh flower exports.

There are a wide variety of types of flowers that are used for exports, some of them are: roses, gypsophila, flowers for ornaments, carnations, áster etc. Of this great variety, the roses are the main product since it has a total of 80% of exports, where the majority of these are cultivated in farms located in the Sierra region, and its main provinces are Cotopaxi, Pichincha, Imbabura and Azuay.

The Florícola sector of Ecuador represents a large percentage of exports is annual non -traditional of the country. Being this important sector, it is managed dynamically and very different from the other agricultural sectors of the country

The flower index is of great importance in the maintenance of the economy of Ecuador. According to the complexity product index (PCI), the flowers and cuts cut have the 337 position of products with greater export in the world and additionally the 1222 position of the most complex product.

Our country has third place in the export of this product worldwide with a total of $ 846 million, being only exceeded by Colombia with $ 1.4 billion and the Netherlands with $ 3.68 billion. Flowers represent an approximate total of 10.4% of GDP throughout the country.

But the export of this product has been something risky over the years as the daily telegraph in one of its articles, for example, we have the situation that occurred in 2014 with the appreciation of the dollar with this, the loss of The competitiveness of Ecuador and I get the fall of the Russian market, one of its largest buyers. The closure of this market produced an oversight of 18% of the flower worldwide and this only resulted in a brief export crisis for Ecuador and the reduction of the production area.

In 2015 with the surplus between costs and production expenses the gain that remained was almost nil, but this was remedied in 2017 with the partial market stabilization. Ecuadorian flowers are exported throughout the world, but have a special reception in countries such as the United States, Russia, the Netherlands, Canada, Italy, Ukraine and Spain

The money provided by these exports is used for the construction and financing of public works, this has given us a great improvement and has caused a slight increase in the population in sectors such as Cayambe since it is in these areas where there is a better crop in the product and this has given new sources of work.

According to the Association of Flower Producers and Exporters of Ecuador, they argue that until June 2013 there are an average of workers per hectare of 11.8 workers more or less and 50% of employees in the flower sector are women, we also have to There are about 48.000 direct workers and 55.000 indirect workers in this area.

To conclude, GDP growth has an average of only 6.0% between 2015 and 2018, with this, the inflation and Gini index are stable.

The Republic of Ecuador, since 2014, has promulgated an adaptation of its economy to an international context, which has been characterized by low oil prices, growing commercial frictions, dollar appreciation etc. The Government in many situations and mainly due to the absence of tax savings, has established several processes such as the rationalization of public investment and current expenditure optimization. On the other hand, many commercial alliances have also restored and several partial measures have put into operation to increase non -oil public income.

Although Ecuador’s GDP is mainly based on the export of mineral fuel It is one of the world’s leading flower exporters in addition to having allowed creating new jobs for the community and has reinforced the country’s economy for construction works, even if it is a somewhat dangerous market, it is worth continuing to support its Export since Ecuadorian flower has made large investments in modern, effective and adequate technology for use in their farms, obtaining as a result a quality production, managing to consolidate in international markets, opening opportunities for the export and consumption of the various flowers and tropical foliage.

Previously the flowers were considered a new product, with very little supply globally, but in turn with a constant growth demand, today is one of the most carried out in the country, due to its diversification of intense colors And striking, Ecuador is considered the most appropriate for the planting of tropical flowers due to their characteristic climatic situations that occur in the three regions of the country being that of the Sierra the most suitable and that is why it is where a greater one is obtained production.