AS Ecuador’s coordinating minister of production, employment and competitiveness, Nathalie Cely Suárez has seen her country’s ties with China deepen rapidly. She spoke to China Economic Review about the impact of Beijing’s investment.
Q: The government has been in contract talks with foreign oil companies with a view to increasing state revenues from the sector. What is likely to come out of this?
A: As conversations unfold, local and foreign companies have been very receptive of the government’s concerns. As far as they’ve let us know, no one has suggested altering any planned investments. We are confident our government team and the companies’ representatives will be proactive before the November 17 deadline for new agreements arrives.
Q: How dependent is Ecuador on foreign investment in the oil and gas sector?
A: Ecuador’s oil resources have traditionally been handled by Petroecuador, either in cooperation or through contractual agreements with foreign companies. While the question of dependence is tricky, our decision to negotiate new contractual terms suggests that much profit is being generated from investments in Ecuador. At the same time, there must be legitimate and reasonable benefits for Ecuadorians from those investments.
Q: How would Ecuador like to see Chinese investment in natural resources evolve?
A: The government is willing to promote foreign investment at large, as long as it fulfills ethical financial criteria: We want investors to create jobs, pay taxes and show respect for communities, consumers and the environment. Whether investment goes into new areas – mining, gas, and so on – or into more traditional areas, it’s ultimately dependent upon investors having good business ideas.
Q: How significant is Export-Import Bank of China (Eximbank) support of the Coca Codo Sinclair hydroelectric dam?
A: The significance of that credit agreement going forward is as big for our country as the project itself. Being the largest dam in the country, Coca Codo Sinclair is a good example of the future partnering opportunities between China’s financial institutions and our country. We believe the scale of foreign involvement in the energy sector is only defined by mutual interest and successful joint experiences.
Q: Eximbank is also backing the Sopladora hydroelectric plant. Critics say this means China will be financing nearly 60% of all current energy sector public works projects. Is there a risk of overdependence?
A: We’re working hard on leveraging our projects – and not only energy projects – and we have various foreign investors engaged in serious conversations. If our partnering options with China or any other country grow with time, and so does confidence and mutual trust, 60% should not be a scary number.