The Pacific's pearl: with favorable winds and calm waters, Ecuador's business capital is finding its place in the investments map

Latin Trade, March, 2005 by Maria Fernanda Egas

A change of direction was necessary for Guayaquil, main port and economic hub of Ecuador, to take a turn for the better in terms of services and infrastructure, and consequently in quality of life and incentives for tourism and investment. City authorities have succeeded in their 12-year effort to bring together the public and private sectors to achieve a common goal: reviving a city full of history, human warmth, and a tireless spirit for progress, making it the most populated city in the country. Guayaquil has a population of over two million and harbors 40 percent of Ecuador's industrial and business ventures.

"Investment is more than welcome here; the city of Guayaquil offers legal certainty," says Mayor Jaime Nebot who, separately from the rest of the country, is attracting investments through new tax breaks that can lower taxes up to 19 times for companies with new lines of business settling in the city. He also stresses that the dollar, as the country's official currency, invites long-term investment with no risk of devaluation. Nebot, recently reelected, is the most popular Mayor in Ecuador and credited with the urban transformation that has rejuvenated the city. He claims that his secret is to allocate 10 percent of income to expenses and 90 percent to public works and services. Of this amount, $30 million are spent in transforming the city, a seemingly never-ending project. He believes this is his way of creating a virtuous circle: tourists are attracted, more jobs are created and new investments pour in.

So far, the travel log for this project includes refurbishing the inner city and the buildings by the Guayas River, the city's birthplace, with its picturesque Santa Ana hill, with its 400 steps leading to bars, galleries, restaurants, and finally a towering lighthouse lighting the nights by the water. Other improvements include Malecon 2000, a modern pier with gardens, an Anthropological and Contemporary Art Museum housing over 50,000 artifacts and a valuable modern art collection, an art house movie theater, an Imax theater, malls and food courts. South of the pier is Palacio de Cristal, a metallic building dating from 1905 recently recycled into a convention center for events such as last year's Miss Universe designers fashion show.

Guayaquil is building a name for itself as an ideal city for conventions, conferences and fairs. And it started big, by hosting the fifth round of talks for a Free Trade Agreement, including delegations from everywhere in the region. "They have been to Cancun and Cartagena enough times already!" the Mayor pointed out, adding that Guayaquil provides all it takes to arrange an event and move on to the famous paradise destination of the Galapagos Islands and the beaches along the Ruta del Sol.

In fact, the city is firmly achieving this status and has inaugurated a new convention center at the Plaza Rodolfo Baquerizo Moreno, next to another recovered pier by the Estero Salado, a branch of the river that has overcome a long period of pollution and is again a natural recreation site in the city.

From his office in City Hall, a waterfront building built in 1929, Nebot is enthusiastic about his next project: Santa Aha Port. It will include not only a new convention center and a five-star hotel by the river, but also thematic museums dedicated to Guayaquil's most emblematic features--music, soccer, beer and great facilities for nautical sports.

THE KEY TO SUCCESS

No doubt, a fresh funding source has contributed to the realization of ambitious projects in the city that seeks to be reborn as the pearl of the Pacific. On October 15, 1997, a new law allowed taxpayers to contribute 25 percent of their due taxes to organizations and foundations such as Malecon 2000, a pioneer in this program with an initial budget surpassing $100 million. A wave of citizens' donations has made possible the first facility that thousands of citizens of Guayaquil and all of Ecuador really feel a part of.

The success of Malecon 2000 has meant that the same procedure will be applied to Santa Ana Port. According to the Mayor, donations have gone up 30 percent. The citizens' will for a better city and efficient management are to be honored for Guayaquil's new status as a national and international tourist destination, and for its recognition by the United Nations as a Human Development Paradigm in Latin America.

Tourism and industry flourish in Guayaquil's year-round tropical climate, which promotes the city for "light" tourism: just pack a light bag and enjoy the sun. Hotel occupancy has increased 15 percent, and exports from the city port 14 percent, between 2003 and 2004. The Mayor has forged strategic alliances with the city's port and airport--the gates to the city.

Nebot believes that Guayaquil, thanks to its location, may well become a key spot in the South Pacific as a cargo transfer point to the Atlantic through the route to Manaos (Brazil), and an air transportation hub in the center of the world.