More taxes, Less Future

Why believe that Ecuadorians are ignorant and stupid, that only academics know what this is about? Human beings, even though they may be humble, have a clear connection between the pocket and stomach, then do not continue misleading saying that the increase of 5% tax on foreign output affects only a small group of wealthy who get the money from the outside because that is not true. That tax is a universal tax because it affects 14.5 million people, because every time you import raw material (recently it is said that raw materials and capital goods will be excluded), technology, equipment, etc.. And so on, at the time of paying they are taking the 5%.

The 5% is a confiscation by transferring money from the pockets of people to government coffers to keep at the carnival spending without quality or road map.

The Constitution of Montecristi was promised the right to work not only for young people just starting out, but employment even for older people. Such boom and economic bonanza was promised that would be work for everyone. But how can you generate this kind of effect creator of jobs chasing capital away? Who wants to invest in a country where freedom to move capital is more restricted every time, to the point of charging a rate of 5% to mobilize it outside Ecuador. This means that any goods or service for which the tax is applied automatically becomes 5% more expensive, not to mention the existing tariff for that product or service. All these taxes reduce the purchasing power of people and by reducing the pocket of people businesses sell less and instead of growing shrink producing unemployment as happened with the dismal returns of years 98 and 99. With this 5% devaluation (which is why the President said this tax would be eliminate if were turn to the SUCRE), who is harmed? The middle class and those with fewer resources, because everything will raise its price, this is not just a maze but the marginalization of the Ecuadorian people's welfare. Are they doing everything possible to bring the population into deeper poverty to prevent people having their homes, to produce again a mismatch between income and family needs, destroy the benefits of dollarization and start with the intoxication of waste?

We cannot continue supporting legal and tax changes every few months, how can you plan production and productive projects that generate new jobs if you want to reinvent the country every three months? In Ecuador we afford to build a crisis when neighboring countries are attracting investment that we throw away, and if to this we add the signing of Free Trade in Colombia, Panama and South Korea with the United States will be outcasts with no destination.

How is that in an environment of favorable oil prices and food prices and other commodities that Ecuador exports we cannot consolidate the Fiscal Fund and need more and more taxes? How is that we do not take advantage of this environment to sow the oil and convert Ecuador into an emporium of tourism and agro-production? How is it that we consolidated ourselves as an extractive economy (oil and then mining), repeating the mistake of the oil boom of the 70?

There is no economy here, there's only politics and circus.

Passivity leads to allow others to take the future of our children. Until when?

Images of the massive audience that participated in this day of

conferences, where where there were debated several important and interesting

issues for SMEs

XII Congress of the FIE called "Agents of Change:

Building a positive future to generate jobs and

distribute wealth" held on September 12, 2011 in the Isabela Grand Ballroom of the Hilton Colon Hotel of Guayaquil

From left. to right, Dr. George Peroni, UCADE-CARITAS, Ab. Joffre Campaña, General Director of Goberna; Ing Giovanni Ginatta, ExecutiveDirector of theFIE; Ing Freddy Cabello, UNOCACE; Ing Paúl Carrasco,Prefect of Azuay; Dr. Vladimiro Alvarez, Former Minister Govern of Education, and Dr . Luxio Ugarte, Mondragón

Cooperative (Spain).

From left. to right: Ing. Giovanni Ginatta, Mr. Rodney Goodwin, President of FIE Northeast Sector of USA; Ing. David Lemor, Former Minister of Production of Peru; Dr. Claudio de Rosa, President of FIE El Salvador; Ing. Joyce de Ginatta, President of FIE; Dr. Nicolás Ardito, Former President of Panamá; Dr. Luxio Ugarte and Mr. Daniel Viotto, Former CNN Latinamerica news anchor (USA)

La Ab. Domémica Tabbacci, Vice Mayor of

Guayaquil yand Ing. Joyce de Ginatta.

Econ. Mauricio Pozo, Former Minister of

Economy, talked about Autonomies.

Dr. Luis Fernando Torres, Former Mayor of Ambato and the Econ. Auki Tituaña Males,

Former Mayor of Cotacachi , talked about autonomies and decentralization.

Attorney Joffre Campaña, General Director of Goberna and Law and Dr. Vladimiro Álvarez, Former Miniser of Govern and Education, talked about the importance of

Legal Security.

At the end of the event Ing. Joyce de Ginatta received from hands of Mr. Rodney Goodwin, in the name of the member of the FIE, a plate for her magnificent labor as the head of this Institution dedicated to enforce the MSME’s.

Mining represents today the most important economic activity in Chile. Currently, and given the high price copper has reached in recent years, mining has come to comprise 20% of gross domestic product and 62% of national exports. On the side of the nation's income taxes collected by effects of mining activity reached 20% of the total in the 2010 tax year. The situation described above has enabled the country, starting in 2005, saving significant resources, which for Chile is unprecedented in its history. The country went from having a permanent external debt to be a creditor nation with financial investments in the international market. Tax revenue corresponding to public and private mining over the past five years amounts to the sum of 64,000 million U.S. dollars, higher than 30% of the annual budget of the nation. Chile is currently the largest producer of copper in the world with proven reserves equivalent to 23% of world reserves and annual production of over 5.4 million tons of fine copper, this figure represents over 34% of production the world. Likewise it is also within the major molybdenum and gold producers worldwide, metals that have seen significant increases in their prices during recent years.

This increase in mine production in Chile, recently boosted by high metal prices, is product of mining policy implemented in the country, mainly in the last 20 years, that managed to reconcile the state mining development and gave a boost to private mining. In fact in the last 10 years the production of Codelco copper mine, the main state-owned company, has been steadily rising but relatively small when compared with the development of private mining, which production has nearly quadrupled in the last decade. In fact between 2000 and 2010 Codelco copper production increased from 1.3 to 1.7 million tons of fine copper annually, in circumstance that private mining production increased from 1.0 1 to 3.7 million tons of fine copper per year, the latter representing today 69% of the country's production.

This situation is mainly due to the following aspects. First, in addition to the existing substantial mineral resources, Chile has a political and economic stability that allows and promotes foreign investment in terms profitable for the country, providing reliability and security guarantees in government policies, through a statute of foreign investment, which ensures non-discrimination for foreign employers, especially in tax matters, where the investors are guaranteed a tax motionless for twelve years, enough for an adequate long-term mine planning. Both, domestic and foreign mining investors have the same obligations, rights and regulations, which give a guarantee for the investment. Besides the above, mining property in Chile is granted by a court independent of the government, which is advised by the relevant government agencies to grant it. This mining property guaranteed by the Constitution and regulated by the Mining Code, is achieved through the delivery of a property title that has the same validity and legal force that the one given the owner of the soil. This figure applied and respected in Chile for decades gives legal certainty to the mining property that promotes investment in general.

Importance of the Estrategic Mining for Chile

Ing. Santiago González Larraín

Director of Mining Development Program

Central University of Chile Former Mining Minister

The economic dependence of non-renewable mineral resources in Chile raises serious questions, we must now address. The country today is betting its development based on the exploitation of mining resources. This will allow, if operating levels and high prices remain, Chile reach its development during this decade. However, this situation will not last forever so that the country must invest today in areas that will maintain the growth tomorrow. It is in this line that was proposed to boost research and development in matters of innovation in areas of various kinds related and unrelated to mining, incorporating an internal capacity in the country to generate knowledge in areas where they can stand out and produce future income. Product of this latter policy in Chile begins the discussion of the so called Mining Royalty, which corresponds to a contribution made by all the big mining companies whose fate will be to promote the development of innovations in Chile. This legislation takes place in a framework of respect and seriousness, since bad legislation could discourage mining investment generating an income reduction of this concept is the country. Finally it agrees to incorporate in the tax burden variable percentage calculated on the net benefit of its operation, which considers, in its calculation, changes in metal prices, and costs, which must be incurred for exploitation and profit.

Chile currently has major challenges to maintain its global leadership in mining. An investment plan of more than U.S. $ 50,000 million tests the country's ability to take on projects of this magnitude successfully and realize expected benefits. The promotion of mineral exploration in Chile will be key to maintaining this leadership, since an increase in investment in exploration will enhance existing reserves today and so give greater viability of the mining business in the long run. Good water management is also one of the most important challenges since large projects are located in desert areas, which has forced the development of a technology to operate the sites with desalinated seawater or directly without desalting. Currently there are two major sites operating with this technology, which certainly increases costs, but allows to carry on the exploitation. Another important matter is to maintain the energetic production capacity needed to supply the mining and development. Chile currently has in the mining area energy supply sources based primarily on electric heat, in recent years two major gasification plants were built to use natural gas and improve the quality of the energy matrix in the region.

Last but not least is the need to train professionals in Chile that can successfully address these challenges. The interest of young people to pursue careers related the mining has increased very slowly and insufficient to address the demand for technical professionals that the country now requires, in this aspect should make efforts. Chile is a mining country and its development is and will be closely linked to mining. To do this we must promote public and private investment in order to maximize the benefit to the nation. Mining is the fastest and closest vehicle that Chile has to defeat poverty and achieve development in this decade, and that is why public policy should be enacted and implemented with the greatest of responsibilities, so as to achieve the cherished desire that this benefit reaches all the Chileans.

Does the human being change? Our mind is influenced by a number of factors, through culture and learning process "set up" certain paradigms (structured ways of thinking) that trigger reactions and behaviors that characterize our particular way of being. Our own experience is one of those factors, however, CHILDHOOD IS NOT DESTINY, as previously determined by studies of human behavior. We now know (new paradigm) that regardless of what we have lived, of what we have passed, the suffering we have experienced, or the pain we have gone through in our lives, what determines the quality of our thoughts, emotions and reactions, even our own happiness IS NOTWHAT WE HAVE PASSED THROUGH, but the way we INTERPRET WHAT WE HAVE LIVED. Hence: "Growing old is mandatory Growing up is optional."

So then,: "Does the Human Being Change"?. Popular sayings such as: "Genius and figure ... to the grave", "twisted growing tree ... never straighten its trunk", and many others "mold" a particular way to develop thinking, build morale, and this, linked to your attitude and to your conduct, reflect your being a person in this world.

I ask again: Does the human being change? Despite the environment, despite these legacies of thought, despite our historical slow pace to learn in this area, despite the great omissions of our culture, THE ONLY THING THAT DOES NOT CHANGE ... IS CHANGE! including humans. The older cell of your body today is going to die ... and renewed ... and so on with the foolish consistency that is the cycle of life, an endless rebirth. Nothing dies ... Everything is transformed. The human being does not resists change, resists to be changed!

We find it so hard to adapt to a world that changes before our eyes in a vertiginous way, knowledge is potentially reproduce and multiply before our proven ability to assimilate, that our navigation through life invites us to embrace it more like our "little board of salvation" to that way which allowed us to" float "and not" drown "(I mean survive) in the mysterious particular world of everyone, and then when we realize that life required more that "breathe" is time to die.

HUMANS.... DO NOT CHANGE, UNLESS ... "he is tired of suffering." When he declares the "ENOUGH!" that has not dared to testify. When he cries out to the world and to their own eyes that are tired of being "addicted " to suffering, and chooses to defend "the bite of the meal" that he is destined to enjoy. When you choose to be happy, when you learn that no one can hurt you without your consent, when you realize that the only agreement we have done at birth, is not with life but with death, and death is so sure of its victory that is even giving us this life in advantage.

The pain is different from the suffering, pain is human, it wakes us up with the necessary dosage, it "connects" us with life, but does not kill, the suffering does ...The pain itself is mandatory, suffering is optional.... These are the stories you tell yourself, this are the stories you create in your mind, this are the narratives that accompany you boycotting your days, your months and often your years, and creates the habit to never "want" to get out. Any attempt finds a good reason to stay.

Change is destiny, Development is optional

Mrs. Adriana de la Fuente

Consultant and General Director of CAASE Training Center Mexico

You do not need of professional therapists, you need the courage to look in the mirror and realize that we can deceive half of the world ... and the other half ...TOO! But to yourself, to yourself ... the person in the mirror ... NEVER

¿WHAT IS CHANGE? There is six billion people On this planet. Imagine if everyone had the same tastes, dress the same, eat the same thing. It would be very boring ... Right?...,thank God, all human beings are different and so far we have not found anyone like another, including twins. In the world there are many ways of doing things and also many possibilities different of the one we already learned; to

drive us or to propose alternatives. The important thing is to be aware that we must be open to learning new things and recognize that they exist. Sounds simple ... but it is not ... as experience teaches us that although this type of logical reasoning, we deny with our attitude the possibility of being wrong, to admit that there are other ways of doing things. Change in simple terms means things stop being what they are, to transform things, find different ways of doing ... and for this, the first thing is to accept that possibility exists around us.

Why change? - It is also a question that we have done many times. Yes, I'm fine, just as I am! Does this sound familiar? I think so. We change NOT TO BEOBSOLETE, to meet needs, to improve or to adapt. But here we must clarify something: Not all change is necessarily for the better, as there are changes in which we are not going well (in the sense of obtaining results), but if we take the experience, So then, we realize it was worth a try! All improvement involves change. The first stage of change is when we accept that there are other ways of doing things. The second stage is usually when we find it important to the direction in which we must direct our efforts for change. This is because we do not know deep down our needs or the needs of those around us. Therefore, the change must be directed towards THE SATISFACTION OF OUR NEEDS, or towards the SATISFACTION OF THE NEEDS OF OTHERS, THE CUSTOMER (THE CITIZEN).

If we discover a need and do not direct our energy to it's satisfaction, we enter into a process of frustration (it is the time it takes us to discover a need and satisfy it) or of resignation. In the case that the need we discover is the customer and we do not change to satisfy it, the customer as irretrievably lost, in our case: the citizen.

This is the thinnest point of change. We know that the direction we have to change is to the satisfaction of needs. But how? It is through taking responsibility for this change. But what if we know there are different and better ways of doing things, or which can give better results, or that we like and make sense to us ... we do not do it? First, we must recognize that there is an unmet need and there is something of us we do not like or that we should change.

Something very important in reference to change is that we are responsible for ourselves. Our boss or partner is not guilty or responsible

for what happens around us. We are responsible for our salary, our professional and personal development, and in general things that happen to us.

The things that happen to us, either we provoke them, allow, or create them. Or are we part of the problem or are we part of the solution. You cannot be part of anything. The alcoholic solves half of his alcoholism at the time of accepting it as a problem. Human beings resist change when nature does change a law of life.

The change does not change, it is a constant in our lives. Just turn around and take a look around to realize it. One thing we can take in this regard is that the human body moves daily between 300 and 800 billion of dead cells, it changes every second, it is impressive to know that the tongue, for example, renews a 100% of its cells in a week; this means that older cell that today composed your tongue was born seven days ago and today is going to die. We see this in the technology, media and society, although the latter has shifted sadly decaying process.

Therefore, the term life and the term change can be confused with the same. But here we will concentrate on analyzing the human side of change and how it affects the willingness of individuals, resistance, anthropological facilitators and what attitudes are assumed to change. The men who made history are those who have committed their time in history, with its present. Even the word "change" can only be conjugated in the present tense, since I can not change the past and I can not guarantee that the future arrives.

Change does not mean that we shouldn't observe and learn from the

past, and that whoever does not learn from history are doomed to repeat it, that is, not to change. Nor does it mean that we lack future projects, it just means not to live there and really learn to live the present. We cannot live in the present if we use past practices that today are obsolete.

We must learn from the masters of mankind: the children. They live in the present tense and are playing at the time, really are not very concerned about the future, only concerned about the present. However, adults have been responsible for taking away hours of game play for the sake of their preparation, being that their training is precisely that they play intensely their games, the kids today hardly play, the entertain; waste time

First change factor, Responsability.

Challenge or

Change?

te está

Some might consider that now is not the right time and there are always those who think it's always time to bring your values to your service and responsibility for your present. What does not occur in nature does not occur in you and if there is not in you, it will not be in your company; a way of illustrating this is: Imagine a drop of water falling into a pond completely calm, how expands in waves, from where it fell to the round wave form getting bigger. Thus, the change is from you to others and depends only on you that this is carried out.

6 BASIC FEAUTURES THAT RULEOUR TIMES

1. Exponentially Accelerated.- In our time change is going faster so it's easier to lose your way. 2. Qualitative Change.- Every day more people are interested in a qualitative change and this gives us hope and promise that things will improve. 3. Economic globalization and Lifestyle.- It offers threats and opportunities, allowing us to share economies and other intellectual as spiritual values. 4. Ability to produce information.- Our time produces more information than we are able to process, to the extent that invades us. 5. We have Changed BEING for BEING ALIKE.- Our culture is marked by the “being alike”. We are the culture of pretending, however there is a clear trend towards the rescue of the existence and quality of the person. 6. New Actors in our community and the world.- have appeared in an active way these new actors, such as women, a group of environmentalists and human rights groups.

This requires us to be better employees, or rather, requires us to be employable, and in turn requires us to be better people, and must be innovative, because we have fewer resources or alternatively, more controlled resources. It is a challenge that shows this reality.

DIFFERENT TYPES OF CHANGE

Tecnological an social

changes evolute

constantly.

The planned

change

requires pain

and decision

To built, you first

need to destroy

Evolutionary change.- This type of change has to do with the evolution of nature, the past. People get older. The species are transformed. Is the change that I cannot influence but only adapt. For example, if it's cold I cover and if is hot I fresh up, and so on. Most importantly, this change is the adaptation that we can have, and accept that things are as they are, and declared myself satisfied. At this rate the human being is not taken in consideration. There are two attitudes to this. Agree or object. If you object you will enter a process of frustration, and if you accept you can do something through the acceptance of your reality. Planned Change.- This hedonistic world (pleasure for pleasure) has shown us an easy change, and like that have sold it to us, this causes us to move in the ends, to go for the easy things (from which we are great customers ) or take the attitude of "I do not need", or "it cannot be done". When we talk about planned change, the first thing to analyze is that the change is not easy, on the contrary, is extremely difficult, because it takes a dose of investment, pain and loss. When facing change on the basis that it is not an easy process, we have come a long way. Teens face great frustration when they realize they have to inject a lot of effort in life to do something and "be somebody", that's why is of big the importance showing the difficulty of this process.

This type of change is the result of identifying needs and plan and direct our energy to your satisfaction, for what we do and develop specific programs. This is where we want to work, because it is where we have great potential to influence. It is usually an orderly change. But most importantly it is a change that depends on us to be successful, therefore, becomes our responsibility. This implies that is the most difficult change to perform, since it affects our willingness to do and accept things. In this regard, we mention that the planned change is not a straight line from one point to a desired point, is a line that initially has a depression, in the sense that things seem to be wrong and may be worse, but this is normal, since we are experiencing new things and we are removing obsolete things. Maybe this will bring frustration, but if we have this in mind, we know that is a normal process and positive results will come later, and our depressed line will become an ascending line.

Unplanned change is composed by four stages that connot be modified ot eliminated.

1. Denial .- When facing with an unplanned or unwanted change, the first reaction is denial, that it is not true and that I could not be happening to me. 2. Defense .- This is the second step, after having refused or not accepted it, we defend from it, we try to look for alliances to fight the inevitable. 3. Acceptance .- It is the third stage of unplanned change, which we accept the reality and start something in this regard.

4. Adaptation .- We learn to live according to our new conditions

Unplanned

change puts me

in risk

and find beautiful things we can be rewarding in our lives.

These steps cannot be ignored, there are no shortcuts to take, however, it is possible for you to stay permanently in one of them. The change requires us to learn or we are condemned to repeat history and not to change, and the proof is that humans are the only animal that is justified and falls for the same stone.

RESISTANCE TO CHANGE What is the Resistance to change?

We have learned that resistance to change is bad, and therefore, we must overcome it. We cannot go against nature, we can not go against the resistance, since resistance is common in humans.

Let us forge a vision for resistance imagining a vector. In the physics concept of vectors are energy moving in a certain direction and with a specified force, this energy is going to find a counterforce, with the same speed. This is nature.

The researches of change in their beginning thought that if the vector (proposal) was much larger than the opposing force (counter) they would win, but their surprise was that they always found a resistance so great as great was the proposal. This in business has a name, the leader - follower, marketing - operations, sales and administrative or, simply to be proposed by someone who you do not like for disagreeing, for what must make the resistance our main strength. In short, we must end the idea that resistance to change is bad and therefore we have to overcome. Understand that it is a natural reaction because: not all change is good, is part of the human process and nobody likes to lose what he has earned, in short it is to make from our resistance, our main strength.

IN SHORT, WE MUST RECONCILE WITH THE CHANGE AND NEGOTIATE WITH ITPROPOSING OR LOOKING FOR A BENEFIT AND INTEREST FOR US

TYPES OF RESISTANCE 1. Those related to our personality.- Everyone has a certain personality type that gives us security in our behavior and determines us as people, so we feel fear of the unknown, because that takes away the stability and, above all, we don't like to risk or lose what we have achieved. 2. Those that are linked to the social process.- In this sense we mean that us adults teach how to learn and consider it the best way to do it because it worked for us, for example, the person who says "I lived the company as well and the duty is for him to live like me ...From the bottom! "Rules that certainly worked in a given time, but do they work now? In this area those who resist the most are those with the most benefits

So it is normal to feel

resistance to change?

3. Those related to the implementation form.- This resistance is common in business, since it is linked with the old leadership which does what "I say". Although it is said the old leadership is most common today, what happens is that many effective forms of leadership have already been discovered. In this type of resistance is common to find opposition even though the proposal is appropriate, since it does not take into account those involved in change.

ANTROPOLOGIC FACILITATORS OF CHANGE These facilitators are legacies that our ancestors have left us and as with many things, we don't take them into account or we have forget it. 1. Ritualize.- The rite is a facilitator who helps the process of acceptance. We ritualize the birth of someone, or someone's death, the new year, or together with the family and say this cigar is the last you see me smoke, all that is ritualize, and in the business world takes place also in the sense of engaging signing a change project or overall quality. 2. Make groups.- Towards with the difficulty of change, making groups that share the same challenges and values facilitates the process of change. For example, Alcoholics Anonymous groups facilitate to stop drinking, enterprises can form groups to achieve a specific change. 3. Dose the change.- Many times we sabotage ourselves by putting us definitely impossible goals that can not be carried out or seem far away, so we put a facilitator goals or steps in the process of change so that take in doses. 4. Controlling Chaos.- The excess of success or failure could trigger chaos in our lives or the lives of our company, so it is recommended to perform a small laboratory tests in our plans, or develop pilot schemes, where we can document the process and being able to carry to other areas.

BASIC POSTURES TOWARDS CHANGE

1. Inactive - I don’t mind, it is ok the way I do it. 2. Reactive – I do it because I’m forced to, or because others do it, therefore doing it gives me

acceptance. 3. Proactive - I do it becaause I’m interested in doing it and I know I need it. 4. Interactive – I not only do it, but I promote actions.

The only way to be proactive to change is is with an attitude to transcend your life and your community, is breathing existentially, as the trees that open their foliage in the summer to nourish nature, and in the winter they protect closing their leaves from inclement weather. By transcending we refer to the fact of caring about my community without forgetting myself, or not forgetting my community, by thinking I am the only valid and important.

As alienated living outside - buys what they do not need with money they do not have, that one day will earn in a job that they do not love. He that does not love his work is an unemployed, or, as the self-absorbed - who lives in himself and believes that the world is. The planned change is a cognitive decision that we are responsible for.

CHANGE IS TO CHOOSE

1. Choose is resigning: is having a "yes" and many "no’s" between good and good. 2. Choosing without sacrificing divides the man: wanted to be a lawyer but I am a doctor.

3. Giving up without choice reduces the freedom of man: at the end you are choosing not to choose. 4. Choosing constitutes: as a lawyer or manager, "would" is the cheapest drug. It evades you but does not change reality itself and is addictive 5. Choosing maturely teaches: choose the means, goals and consequences. We can not and should not borrow money, and not get fat eating or take drugs and not create addiction. No one chooses to exist but the attitude you take to it. 6. Choose properly humanizes, human act = intelligence + will

VALUES IN THE PROCESS OF CHANGE The value is like a cognitive decision. • The values as changing are a cognitive decision. This means that the value we have to take a conscious level, and understand that is a decision we make about how we decided to live.

Limits of values • It is important to consider that the values, like everything in life must have limits. But they must be clear and not too flexible. For example, some have decided to stick with the value of not kill, but possibly if the limit is violated he would. This is referred to, to death threats, if I see my life or my family in danger I probably will act accordingly exceeding the limit where my value moves.

Value as a Conduct • Have you heard this? - "Dad someone is calling you on the phone " - "Tell them I'm not here." Does it sound familiar? This example tells us to say that the values must be accompanied by a behavior. We have listened. "For me, the truth is a value, because my parents raised me well." But we were not taught that there must be a behavior behind them, because without conduct a value is not value. Will we have values that are not always accompanied by a behavior?

Values are the stage where the Actions are moving • We can place that values are the territory where they actions move. All our actions must be moved within that demarcation. If honesty is a value that I have decided to be part of my lifestyle, my actions must be moved within that demarcation socially understood as honesty. Choose your values, put them "landing gear", practice them, and when something does not go well, take charge of what you responsibly provoke, feel free to do what you want, but take charge of the damage they cause, but also learn to deserve the blessings that lavish on you, and whatever your choice is, go for it! Life has to wait, because it is designed for the brave, for those who throw the heart in the front, look to the sky, dreams, pointing to the stars and feet on the ground.

Summary of Lecture by Dr. Alvarez in the International Congress of the Federación Interamericana Empresarial (FIE): AGENTS OF CHANGE, BUILDING A POSITIVE FUTURE TO CREATE JOBS AND REDISTRIBUTE WEALTH. September 12, 2011. One of the fundamental axes of development of a country has always been the investment. Productive and financial investment, investment, domestic and foreign investment, private and public investment. And is that the investment is so important when submitting a project of small or large proportions, either in private or public sector, that one of the first questions that arises spontaneously is: where are the economic resources?

The investment involves the action of putting capital to carry out any work for the installation of a company to perform a business, for scientific research or to achieve a social objective. But in order to have investment there must be stability, freedom and labor in a security framework, individual and collective security, and largely legal certainty. Laws to be respected, the division and dependency between the functions of the State, contracts to be respected and that there is a fair administration of justice in cases where there is controversy over investments. Assure that there is fair justice without subjecting judges and the courts to political and social pressure and threats, and economic temptations. In short, it requires a credible impartial administration of justice that conforms to the facts and that conforms to the law.

At a time ideological concepts against globalizing economies led to prevent or limit foreign investment, not only by government action, but also setting standards and multinational control agreements to such investment, such as the Cartagena Agreement in which Ecuador was one of the signers of the agreement and faithful follower of the control on foreign investment, resulting in the diversion of foreign investment to other developing countries allowing other economies.

Currently in the country foreign investment is driving away with so many legal reforms, as there are scattered rules that scare the investor, when what the country needs to ensure and guarantee the legal framework within such investment should develop in freedom and security. According to statistics by the LEXIS at December 30, 2010, Ecuador has had 20 different constitutions and206.176 General rules issued in the country, showing a little legal certainty for Ecuador.

In order to exist trust and confidence in a country political and economic stability, legal security, individual and collective is required, as the crime also affects investment. Topics on which we must all work and contribute in some way to eliminate individual insecurity, and for purposes of collective investment legal uncertainty. In proposing or participating in a development project, the analysis should be raised in 3 conditions or fundamental questions:

1.- Is there stability for the work that is going to be generated? 2.- Is there freedom and legal security to develop the project you want? 3.- Where is the money? (Relating to resources)

IMPORTANCE OF LEGAL SECURITY

Dr. Vladimiro Álvarez,

Former Minister of Govern and Education

Summary of the Lecture by Dr. Campaña in the International Congress of the Federación

Interamericana Empresarial (FIE): AGENTS OF CHANGE, BUILDING A POSITIVE FUTURE TO

CREATE JOBS AND REDISTRIBUTE WEALTH. September 12, 2011.

There are certain phrases that become fashionable in Ecuador as "economic reactivation", with the passing of time and certain statements other phrase that has become a kind of catch phrase, especially in the investment theme, is "legal certainty".

But what is legal certainty? Is generally thought that legal certainty is a matter of business, lawyers and judges, they start talking of legal certainty as a distant matter , far to the citizen, which is a mistake. Legal security is a topic of interest and concern to all, for example, when a woman from a popular sector goes to the neighborhood store, get to the store and buy a gallon of milk and suddenly that liter of milk came out rotten, what does the lady do?, she claims to the owner of the shop and the shop owner will tell her that's not his fault, but the producers' who gave him the milk, and there is noted an important issue for who is responsible for damaged milk. On the one hand there is the shopkeeper, on the other hand the consumer and the producer on the other side, then who is responsible for rotten milk?

Seeing things a little further, it happens that someone wants to make a significant investment in the country, for example about 100 million dollars to be invested in housing. The first thing to do ischeck with the attorneys what is the law governing those 100million dollars to be invested in housing. And that's when it comes to a total confusion since the first thing that draws attention for the lawyers, the firm or studio is, okay, and what is the current legislation in this country? Not only are thousands and thousands of rules, to make a brief example of specific and real issues, exists a private system calledSilec LEXIS that allows to have a legal codification, compilationthat is available to some lawyers to be an expensive system, is available to some judges and is available to public officials ingeneral.

Recalling a bit in December 2010 was approved the Production Code, lengthy code that few people have read. At the end of that Code the commercialization of bananas Act is reformed and that Act establishes certain sanctions for those who do not pay by using the interbank payment system of the Central Bank. Then, note that is issued a Production Code in which in a hidden provision an Act of banana is reformed. If for an issue of professional practice you search for banana Law in the SILE system, observe that the reforms are not reflected in the Production Code published in 2010.There is thus a serious issue, because if new Codes and Laws are not constantly review you couldn't kept in mind that there are some reforms. So if you think about judges and lawyers from different provinces and counties of the country you will notice that there are many who can hold his head to the thousands of amendments to different laws, so there will be a bad advice.

So the first big issue when it comes to legal security is certainty as to where the existing law, important particularity. Legal certainty involves certainty of what is the current law and in Ecuador unfortunately there is no certainty about this because there is no official system to determine which is that law

IMPORTANCE OF LEGAL SECURITY

Dr. Joffre Campaña General Director of Gobern and Law

The second important issue is that Ecuador now lives in legal matters, a process that has been called the "new Latin American constitutionalism," a process that is characterized by sustained in synthesis that above the law is the legitimacy and justice. And between the Law and Justice what we choose? Many will say justice, but the question then is: with justice from who's the point of view? The point of view of justice depends of each person and will be completely different, culturally and sociologically because human beings are different.

The legal certainty from the light of this second requirement is simply that it is certain that the legal rules governing a society will be interpreted and applied uniformly across the country and will not be subject to different interpretations of justice. That is, you should know that if the milk rot in the the store of Guayaquil, the same laws with the same rules of interpretation apply in Guayaquil, Milagros, Manglaralto, in Loja, Cuenca, Riobamba and Sucumbíos. However, you can have dozens of statements that say one thing in Guayaquil, Quito and something else else in Loja. Unfortunately, what the current neo constitutionalism says is that you must forget the text of the law, what matters first is the Constitution and the interpretation made from this may void the Law

Thus, how a person who wants to invest 100 million dollars can be certain that the law X in Article X applies as stated? Because today is anyone's guess how some men in the courts decide how to interpret or how these laws must be followed depending on what the Constitution says.

The third key element of the legal security is the certainty that those who administer justice and judge, effectively enforce the sentence. There is no legal security if judicial decisions are not met regardless of the excuses.

Given that a society is not exempt from conflict, what it requires is that there is a person who resolves these conflicts and at the same time that the person chosen can never be accused of being a "sold referee." So legal security involves certain that those individuals responsible for compliance of the laws, does not obey instructions or act according to interests, but to act with complete independence, so that their decisions having in mind what the law says and everything under that legal system should be known, may issue a resolution that does not do more than meet the definition of justice.

What is justice from the concept as an element of legal certainty? Nothing more than to give each what they deserve. This is the problem of the rotten milk, if there is someone responsible for that fact that someone has to answer. That is legal certainty, be assured of all the theory and the theory of everything, the attributes, powers, etc.. An additional element of all these features of legal certainty is the delay in court cases, in which judges often take a negative attitude towards the trial for not having sympathy for the lawyer or the people involved.

Legal certainty is not a distant or remote subject or something that people is not interested in, is a topic of interest as much for a taxi driver because someone can hit his car, the shopkeeper because there may be a rotten product, to the the employer who wants to invest 100 million in housing, matters to the Chinese who have lent hundreds of millions to the country, because no one knows if they will be paid with oil or not, or whether it will declare a moratorium on bonuses. The key question is, if any of you had a couple of millions of dollars saved and did not know what to do with those couple of million dollars, would you invest in Ecuador with that legal certainty or you look for a country that is certain that these things are not going to happen?

So we can conclude that sometimes people do not have the awareness that legal security is an issue that involves us all, absolutely everyone, because without a system of legal security in the country nor small or big things can be achieved and if we do not have small nor large investments there are no jobs and if there is no employment other uncertainties such as crime, etc. will appear

Traditionally, the concept of microfinance is linked to the cooperative and has amore rural than urban focus, which in Ecuador has allowed people to access financial products and services. In December 2010, for example, cooperatives banked all regions of the country except for the island region, highlighting the Sierra region with 32.32% and the Amazon with 28.09%. The performance of this subsystem of the national financial system represented 33% of total banking index, and a total of 10.1 million customers, 3.3 million correspond to this system according to statistics from the Superintendency of Banks. The main element for this behavior was the behavior of the partner and the coverage and penetration of financial products and services in the country. But, in what extent this increasing performance of the cooperative influence on the concept of undertaking from the classroom with social finance?. Precisely the universities that keep business or technical schools that have a responsibility to promote a culture of savings and investment in their professionals in training, that in the future will be part of new clients in the financial system.

"Growing Together" by the students of the School of Management in Banking and Finance of the University. It is important to note how in the lapse of a year of the existence of the project the savings rate went from 0 to USD 130 on average per partner, and the number of members from 40 to 192, many of them for the first time had access to credit. The portfolio placed to December 2010 was $ 486.000,00, and the default level is below the average of the financial system. The confidence in the member is the key for the placement of credit. The concepts learned in class are the raw material for decision making: financial and strategic planning, marketing of financial products and services, as well as aspects related to customer service and personalized attention with which students begin management training. Parallel to this summarized management and performance, it is important to note that thanks the project an advisory board was formed, whose members are the same managers of cooperatives, mutual societies and local banks, who twice a year meet in the UTPL to advise the managerial level of the Fund and and sponsor its initiatives, which promote financial literacy in all students of the university.

The business projects in the classroom are important because they encourage training, but mostly because they generate employment and are a source of talent that later will be working in financial institutions or in their own cooperatives. So, despite the uncertainty of a new law that will regulate popular and solidarity finances and economic and political instability in the country, it is clear the role that education institutions have to encourage in the classroom through their teachers. It is essential to promote "financial literacy and entrepreneurship" in the future to have a country of entrepreneurs and consumers only.

Embarking with the Solidarity finances from the classroom

Miguel Ángel Peñarreta

Teacher researcher UTPL

The Interoceanic Canal provides Panama significant connectivity with all major ports in the world. This fact and the international activities adjacent to the canal are placing the country in the center of logistics that joins South America, especially the Pacific coast, with America, especially the East Coast and Gulf of Mexico. Also keep Panama connected with the main logistics trade flows in Asia Pacific, North America and Europe. The expansion of the Canal to accommodate the transit of more ships and so-called Post-Panamax, with an investment in performance of $ 5.200 million will contribute to the greater integration of markets in this hemisphere and with the rest of the world. As a result, the Panama Transit Interoceanic Regional is home to 80% of national economic activity and 60% of the population. The advantage of the strategic geographical position has made 77% of the country's economic activity and 75% of exports to be services. These are in a high percentage of international transport intermodal, logistics, maritime activities, port transshipment, trade, tourism, telecommunications, banking and finance, and several professional services.

Has emerged in economics What is called a "cluster" of related activities, complementary, competitive, which productivity and sizes increases by the proximity between them. For example, the canal, container transshipment ports, Free Trade Zone, the international airport, are linked and complement each other in their businesses by increasing productivity. The registration of the merchant marine, the services of lawyers, repair and maintenance of ships, aircraft certification, the offices of shipping companies in Panama are linked together. And so it goes from 26 international service activities provided from Panama.

SINGAPUR

HONG KONG

SHANGHAI BUSAN

ROTTERDAM

HAMBURGO

DUBAI

LA/LB

NY/NJ

SHENZHEN

HAMPTON

RDS.

SAVANNAH

FREEPORT

KINGSTON

ALGECIRAS

PANAMÁ

Principales Centros

Logísticos

La globalización ha aumentado la relevancia de los centros logísticos y

Panamá se ha transformado en el principal “hub” de las Américas.

The services conglomerate of geographical position of

Panama and the National Economy

Dr. Nicolás Ardito Barletta Former President of Panamá

Source: Compair Data

SavannahYantian

Kwangyang

KobeHong Kong

Pusan

SavannahKeelung

Wilmington

Kobe

Pusan

Manzanillo

NJ/NY

Rotterdam

Le Havre

Halifax

Felixstowe

Savannah

Long BeachLos Angeles

BremerhavenRotterdam

Kaohsiung

Kobe

Charleston

Nagoya Thamesport

Oakland

SeattleTokyo

Colombo

Shanghai

Yokohama

Newport News

HakataManzanillo (Mx)Manzanillo (Mx)

Kobe

Miami

Everglades

Rotterdam

Kobe

Baltimore

Osaka Hamburg

Shimizu

Port Said

Colon

Zeebrugge

Chabang

Tahiti

Auckland

Doniambo

Brisbane

Sydney

Melbourne

Tanjung Priok

Singapore

Marseilles

La Spezia

Tilbury

Dunkerque

Veracruz

New Orleans

Qingdao

Buenaventura

GuayaquilCallao

Arica

Coquimbo

San Antonio

San Vicente

Puerto Limón

Iquique

Manta

AntofagastaValparaíso

.

CartagenaMaracaibo

Puerto Cabello

La GuairaGuanta

Balboa

Kingston

Antwerp

Manaus

Houston

Puertos del mundo conectados a

Través del Canal de Panamá

Puertos del mundo conectados a

Través del Canal de Panamá

Its development already has true proportions of international significance. Thus, the canal passes 4.2% of the global maritime trade and 31% of the transport of Asia - Pacific to the U.S. East Coast. The ports transshipped 5.5 million containers in 2010. The Colon Free Zone had a total transaction volume of $ 19.2 billion the same year. Both activities are the largest in Latin America. The railroad moved 360.000 containers between the Pacific and the Caribbean. The sale of fuel to ships in transit (4.767 in 2008) was 3.3 million metric tons, one of the highest in the region. About 230 turistic cruises with 0.5 million passengers stopped at Panamanian ports. The merchant marine has the largest ship registry in the world (202 million tons). Tocumen Airport had 4.9 million passengers of which 1.8 million were transits. Air cargo was 86.6 thousand tons, a high percentage of the Free Zone. The regional banking center has 91 banks with $ 71 billion of assets. Thirteen of the largest shipping companies in the world have offices in Panama and coordinated from here some regional logistics activities. More than 26 law firms manage maritime businesses and other international businesses from Panama. More than 24 insurance and reinsurance companies complement these activities. The international telecommunications fiber optic cables are the best in Latin America and grow fast. Tourism and trade channel is a significant percentage of the total tourism. 96 international companies of a certain size located here its international offices. The Panama-Pacific area and the City of Knowledge, besides the city itself, are their favorite sites.

With the expansion of the canal in the next 3 years, the volume of traffic will increase, contributing to the growth of all these activities. Assuming a normalization of the global economy and the adoption of consistent policies in Panama with this development, the prospect is that the country can grow 5 to 8% per year for 15 years. To achieve this is needed a lot of people training, modernization of physical infrastructure, strengthening of institutions, more efficient public services, more effective fighting poverty and strengthening democratic governance in the country. Important and profound issues. Geographically, the challenge is also interesting and substantial. Economic and urban developments occurring in the expanded cities of Panama and Colon in the Pacific and the Caribbean, while hereby maintenance to the canal basin is given, which provides water, essential to its operation and is house of one of the richest biodiversity in the hemisphere, just thirty minutes from the cities. That biodiversity, producer of oxygen, is also used limitedly for scientific research and ecotourism. The territorial ordering involved in the above is essential to projecting how to keep in the next thirty years. Faced with this reality and opportunity, business-level view, sectoral, regional and global corresponds to a strategic action well structured public-private partnership to realize the potential.

Maintaining openness to the world is essential. Strengthen the institutional as a basis for consensus and continuity is key. Train and empower Panamanian to take advantage of the great opportunity the country has using modern technology is the foundation of success.

Tránsito

Interoceánico

CANAL

ACP

LOGÍSTICA

CUENCA

HIDROGRÁFICA

HIDROGRAFÍA

TURISMO

COMBUSTIBLE PARA

BUQUES EN TRÁNSITO

FORMACIÓN

GREMIOS

AGENCIAS

NAVIERAS

SERVICIOS CONEXOS Y

COMPLEMENTARIOS

BASE DE

DATOS

ZONAS REGIMENES

ESPECIALES

SERVICIOS

PÚBLICOSAEROPUERTOS

TRANSPORTE

CARRETERO

SERVICIOS FINANCIEROS

SERVICIOS DE

ALMACENAJE

TELECOMUNICACIONES

CÁMARA MARÍTIMA

PRACTICAJE

IINSPECCIÓN

GRUAS FLOTANTES

SERVICIOS

INDUSTRIALES

REMOLCADORES Y

LANCHAS

SEGUROSBANCA

JUNTA DE

INSPECTORES

ENERGÍA

AGUA

REFRIGERACIÓN

SINDICATOS

DRAGADO

CONTROL DE

TRÁFICO

MUSEO

DEL CANAL

PESCA

DEPORTIVA

FACILIDADES

TURISTICAS

GUÍAS

TURISTICOS

COMERCIO

TRANSPORTE

URBANO

HOTELES

RESTAURANTS

UNIVERSIDADES

CAPACITACIÓN Y

ADIESTRAMIENTO MARÍTIMO

PUERTOS

ESCUELAS

SERVICIOS DE

COMUNICACIÓNABOGADOS

FIBRA

ÓPTICA

ARMADORES

GREMIOS

INTERNACIONALES

FERROCARRIL

REPARACIÓN Y

MATNENIMIENTO

Conglomerado del CanalCONGLOMERADO DEL CANALCONGLOMERADO DEL CANAL

"Let us not pretend that things will change if we keep doing the same. The crisis is the greatest blessing that can happen to people and countries, because the crisis brings progress. Creativity is born from anguish, as the day is born form the dark night. It's in crisis that inventive, discoveries, and big strategies are born. He who overcomes crisis, overcomes himself, without being 'overcome'.

Whoever attributes to the crisis, failures and hardship, neglects his own talent and is more respectful to problems than to solutions. The real crisis is the crisis of impotence. The inconvenience of people and nations is the laziness to find solutions to their problems. There is no crisis without challenges, without challenges life becomes a routine, a slow agony. There's no merit without crisis. It's in crisis where we can show the best of each one, because without a crisis, any wind becomes a tender touch. Talk about crisis is to promote, and shut up in the crisis is to exalt conformism. Instead, let us work hard. Get this over with, the only menacing crisis is the tragedy of not being willing to overcome it.

THOUGHT

The crisis according to AlberT Eisntein

The market is a synonym for abuse and therefore it should be regulated by the state, said the most radical promoters of the Antimonopoly Act (AMA), to celebrate legislative approval of this dangerous legislative body, which pompously denominated it Market Power Regulation Act. There was no shortage of voices of support to the law of some entrepreneurs who managed to raise significant fortunes from the protections, licenses and incentives that the State gave them and not others, exempting them from the challenges posed by innovation, productivity and competition. The discussion of the AMA hinted the power of the statist and socialist mind, among those who profess this view and also among those who calling themselves liberals did, probably because of their lack of formal training, a series of naive concessions. The larger and more solid the market was, the entrepreneur and, in general, the citizen has the best opportunities to establish businesses and create jobs. In socialist systems there is no place for the market. The state takes its place. The Cubans had to wait 41 years to buy and sell their vehicles.

In Ecuador, is in the market where businesses are established and are offered jobs, despite excessive regulations. The bakery, the mechanical workshop and grocery store are not part of the state but of the market. They work and offer their products. With the same logic, on a larger scale in the market are also big business companies, including supermarket chains and mass-production industries. Does the AMA will serve to the State to control small and large business or only to them? To all, in a very selective form. Behind the Act are latent aberrant prejudices against the market, which is seen under the Marxist perspective, as a simple tool for social and economic exploitation of the poor.

In the words of famous Ludwig von Mises, in his monumental work, Human Action, the market economy is neither a place nor a thing but a process based oncooperation rather than compulsion of individuals who produce, buy and sellguided, not by public officials, but by the price (314). Its main axis is the private ownership of the means of production, not State property. And the idea of capital,unknown in socialist systems, with all that implies in terms of investment,economic calculation and accounting, makes practical sense only in the capitalist system developed by the market economy. Furthermore, as Mises emphasizes, "the market economy is the result of longprocess of evolution" (323). It is not, therefore, accidental and artificial systems, "replaceable, without more, by any other. This is a way of acting, "under the sign of the division of labor, that man has engineered." It is the human "strategy" that has allowed men prosper from the primitive savagery. The market economy and capitalism are not passing phenomena. They express the freedom and ingenuity of human beings, but, above all, are the only organization systems that allowhuman action "to apply economic calculation in the planning of action" (324).

ANTIMONOPOLY ACT AND THE MARKET

Dr. Luis Fernando Torres

Former Mayor of Ambato

Monopolies, as such, are not relevant, except when called monopolists set monopoly prices higher than would be the potential price of the market in the absence of such a monopolistic position. This occurs, according to Mises, when the monopolist harvest a "higher net benefit selling less at a higher price than selling more at a lower price" (338). If the antitrust laws are limited to avoid monopoly pricing, there would be no problem with such laws, nor if they serve to protect people from corporate fraud. Unfortunately, in Ecuador and in other places, including the U.S. and EU, antitrust laws have gone further, paving the way for the static and distortion of the market economy. The law passed by the Ecuadorian Congress is a powerful weapon in the service of those in power to intervene in the highly regulated small Ecuadorian market.

In principle, "circumstances never allow that everyone can compete in any market sector, whatever it may be" (334). If consumers are assisted in their unsatisfied needs by existing businesses, the verdict of them , the buyers, is enough to not squander resources on new similar business, unless the business innovation is such that the new employer successfully compete with better products . The abundant legislation of revolution is aimed to restricting public liberties anddestroy the market progressively. The message that brings the Constitution ofMontecristi is clear. The social market economy disappeared from the constitutional nomenclature. Who, other than socialist or mercantilist capitalism can be convinced that the AMAis intended for the Ecuadorian to enjoy more economic freedoms, more free competition and, ultimately, more market?. Beyond the legislative debate, with the experience of the Antimonopoly Act (AMA), the real fight should be waged in the field of ideas, where the thesis ofsocialism and mercantilist capitalism were imposed, and that has much attractionfor entrepreneurs beneficiaries of privileges state.

Summary of Lecture by Dr. Ugarte at the International Congress of the Internacional de la Federación Interamericana Empresarial (FIE): AGENTS OF CHANGE, BUILDING A POSITIVE FUTURE TO CREATE JOBS AND REDISTRIBUTE WEALTH. September 12, 2011. The concept of utopia was created by Tomas Moro in the sixteenth century in the Renaissance era. Utopia is a Greek word whose meaning is: no such place. This question is whether the particular place exists or looks something like a utopia.

1. THE MONDRAGON COOPERATIVE EXPERIENCE. The Basque Country is located on the border between France and Spain, consists of 2 ½ million people, is an old village with its own language, has no natural resources of any kind and has been through difficult situations through the history. Their culture is associative in nature, values, focus on cooperation and solidarity that is where there is the cooperative, which gives it its inception in the province of Guipúzcoa in the center of the region. Mondragón Corporation was born in 1956 led by a priest named Jose Maria de Arizmendiarrieta, who seeing the poverty of the country and the situation in which it was decided to establish a cooperative enterprise. The company and the model are considered and described as the best examples of democracy at work and regional development, making it the world's largest cooperative. Their mission is a socioeconomic reality of entrepreneurial character putting roots of culture in the Basque Country, created by and for people, inspired by the basic principles of the cooperative experience, committed to the environment. The best competition is customer satisfaction, to generate wealth in society through enterprise development and job creation. One of the foundations is to create employment, and so the mission and vision of the company is creating new jobs that are fair. Currently, in the area of cooperativism, specifically in the area of Mondragón, the unemployment rate is 6%, while in the Basque Country and in Spain the average of this indicator is 11% and 22% respectively. So we can say that in the area of Mondragón exists structural unemployment, where unlike the rest of Europe are creating new jobs. The main values is cooperativism, as the owners are the same employees of the company, participation in the struggle for equitable distribution of wealth, social responsibility in management commitment as the workers work both, in management and in the capital; innovation, as you can not stop innovating towards globalization and the current crisis given the fierce competition between countries, which may allow a takedown to another at any time.

The cooperative patterns are of work, workers are protagonists of a collaborative project, commitment to the local environment, experimentation, adaptation, and formation of society, because you work for society and the environment in which you are. Inside the company assumes the risk and competitiveness, as it also seeks profitability. The Mondragón cooperative principles are the free membership, democratic organization, sovereignty of labor, instrumental subordinated character of the capital, participation in

FROM THE UTOPIA TO THE REALITY OF MONDRAGON

COOPERATIVE EXPERIENCE

Historical significance and lessons learned and current

challenges facing globalization

Dr. Luxio Ugarte

University of Mondragon

management, distributive solidarity, inter-cooperation, social transfiguration, and universal education, the latter being the most important point. These principles are the same as the ICA (International Cooperative Association) and are fulfilled to the letter.

• Free membership.- anyone can join without problems of race or religion, where the only requirement is that the person provide a part of capital to become a member of the company. • Democratic organization.- the company's highest body is the assembly and its schema is that each person represents one vote, regardless of position held within the company. • Sovereignty of work - the cooperative is in constant movement, you never stop working. • Subordinate instrumental character of the capital.- the company seeks liquid money through the capital which is in second place. • Participation in management.- Any person member of the cooperative must participate in management. A vertical structure does not exist; you work through projects and equipment, without the rigid figure of a chief in charge. • Distributive solidarity.- is sought that in the society in the distribution of wealth is full and fair, so the GDP reflects a high standard of living.

• Intercooperation .- each enterprise member of the cooperative provides acommon fund, the same that is used in the case any member is in financial difficulty as a capital contribution for the company emerge from the crisis. Thus,the member companies of the network of cooperatives have maintained andcontinue to remain despite the crises that have hit the world economy. • Social Transfiguration .- cooperatives seek social transformation towards abetter and fairer society. • Universality .- cooperatives located throughout the world, providing labor and capital in areas where they are found to have a better future. • Education .- Mondragón Cooperative believes in continuous training.

2. ENTREPRENEURSHIP IN MONTREGÓN COOPERATIVE EXPERIENCE IN THE PAST AND THE ROLE OF ENTREPRENEURSHIP IN THE CURRENT CHALLENGES. Entrepreneurship is a key point, so before the crisis the cooperative seeks to create new companies and businesses, starting with learning from the classroom at the University of Mondragón and teach students to be entrepreneurs. The Basque Country went through many difficulties, from the Civil War to the dictatorship, where there was a closed market and further protected with little or no technology. The only solution was to be formed, to undertake and persist to transform society to a country where people had to survive. In the beginning the Basques instituted microenterprises with the aim of creating jobs, testing things that could be sold at that time in Spain as small refrigerators. Given the need for acquisition of capital for the purchase of heavy machinery and technology appears the idea of founding a bank, whose formula was to make money. The structures that facilitated the venture are the networks created by the Mondragon

group because you can not compete alone against the world, you need to get together with other supportive structures forming to compete. In addition to research centers engaged from management to high technologies andcounty groups that consist of multiple networks.

Two features weigh deeply on the Ecuadorian economy and are structural factors that limit their development: on the one hand, monopolistic and oligopolistic strong concentration of production and finance, on the other hand, rates of unemployment and job insecurity, as we have a mass close to 50% of Ecuadorians classified as underemployed. Given this situation the traditional New Keynesian models, which although takes up the role of the state, absolutizes it, so that leaves no room for a revival of production in our country, and therefore, are shown to be insufficient to solve the structural problems of the Ecuadorian economy. Faced with this situation we require viable alternatives for the productive development of Ecuador. One is the social economy that covers a segment of the proposals for meeting the needs of the Ecuadorian population. Another is the one we propose in this moment, the partnership. Associative models, where there have been implemented at a sufficiently large and sustained scale, have led to the following objectives:

1. Tend to a society of producers and owners, so that production is becoming more democratic by extending the wide layers of the population entering the production process. 2. Conditions are created to improve production processes and thus generate production systems that are able to compete both in domestic as international markets. 3. To produce an intermediate economy between small producers, aiming in particular to the social and solidarity economy, and large producers, who tend to concentrate and to be the main beneficiaries of promote policies of the State. This intermediate economy corresponds to forms of association. 4. Competitiveness focused on the added value that comes from strengthening the resources of a given territory, plus the components of an organic production and attached to improving the quality of life of the inhabitants of a territory.

In our experience, partnership as a way of production enables to solve the problems of scale that are the most limiting, for example, the development of social economy of small producers and at the same time, provide the basis for competitiveness, as we have indicated. This level of intermediate companies, such as production chains, have access to credit in a double way: integrating the dynamics to cooperatives, credit unions, community banks, savings banks, solidarity funds, set up to capture savings and grant loans, and credit of the national and international banking. Along with this you may find possible a new rurality, based on these axes: social and solidarity economy and partnership, which leads to:

Promote agricultural production, irrigation and transforming activity.

Strengthen supply chains

To promote eco industrialization and boost tourism.

Partnership: An alternative for the productive development in Ecuador

Ing. Paúl Carrasco Carpio

Prefect of Azuay

For these levels of partnership to manage functions effectively and be sustainable in the long term have to attend some essential conditions. For example, in the case of Lactjubones (mixed-economy companies in the prefecture of Azuay which brings to 1,600 small dairy farmers), we propose that should enter obligatorily:

- The primary sector, which produces the raw material. - The tertiary sector, especially oriented to issues of credit and services. - The secondary sector: the processes of industrialization and marketing.

It is around these three axes that partnership can be effective, the weakness of any of them may cause the failure of the project. Therefore, it is a requirement that the different chains occur simultaneously and have a sequential development jointly. This resulted in a mixed economy model, which in this case tends to articulate the public sector with the private sector, not at the level of central government intervention, but from regional governments, which are much closer to the needs and requirements of people in their daily work.

Business associations of mixed economy that practically equates the participation of the two sectors-both public and private-that in this way reinforce mutually.

Of course, behind this model are profound ideas about democracy and participation, because democracy in its political side makes little sense unless it has its economic democracy counterpart.

Political democracy remains at the superstructural levels, in the management of power on behalf of the people and does not returned to the people the ability to self-government and self-management.

For this reason, the success of social solidarity economy initiatives and partnership are closely linked to demand for a radical democracy. When we speak of an economy of producers and owners, we are proposing at the same time, a model of democracy.

And when we talk about mixed-economy companies between associated producers and intermediates governments, based on strong territorial roots, we are proposing a new model of state.

We believe that this type of model, that will have be enriched with the different experiences in our country and in Latin America, are the only ones who can solve structural problems, especially to overcome the chronic unemployment and underemployment.

In 2012 the economy will show a modest growth, dependent also of the high and rising public spending supported by oil revenues and rising public debt. The adverse environment of mandatory conditions to boost economic dynamics at high rates will be more accentuated through plenty of internal and external private investment and accelerated progress in productivity and competitiveness. Low growth, with fewer incentives for private investment In 2012 the government expects GDP to grow by about 4% (Table 2). International organizations like the IMF, World Bank and ECLAC, place it around 3%. Expectations distant from the need to increase production above 6%, which is essential to meet the need to create jobs and increase the income of the whole society, to reduce poverty and promote the general welfare. Next year will demonstrate more rigorously the development time lost by not taking advantage of the oil boom in creating conditions for sustained high growth.

Private investment, both internal and external, will have less reason to risk their capital. The Law on Control of Market Power is added as an additional and very important element, in the set of negative factors that push investment away. The macro environment conducive for investment will continue inadequate, further weakened by the institutionalization of a judicial system without guarantees of independence, the political uncertainty of an election year, the risks involved in ownership, fiscal fragility with messages of tax changes and many other factors. Micro reforms for a good business climate will remain forgotten: improvements in the times to build businesses, labor flexibility, better qualification of workers, efficient public services and infrastructure, etc. Foreign direct investment in 2010 was only $ 11 per capita (Table 1), the lowest in Latin America, and will not find in Ecuador a friendly atmosphere, with a high opportunity cost in terms of assimilating technologies and new ways of production

High public spending, half flying ticket to Greece The excessive expansion of public spending will continue the trend of recent years, expanding its increasing participation in the economy to levels close to 50% of GDP (Chart 2). The pre-election year will be crucial in expanding the high political expenditure. If oil revenue does not present the abundance of previous years because the stagnation of developed economies and the lowest dynamics of China, the financing of the incremental spending and deficit will require new large and expensive debts. A public expenditure, which represents half of national production, becomes the axis of economic activity and conditions the functioning of the private sector. Faced with a horizon of distrust and uncertainty in the medium and long term, private business decisions are short term to meet the demand generated by the public sector, either by maximizing the use of installed capacity, minimum investments or increased imports. Therefore, the flow of long-term investments in new companies, machinery and equipment that respond to a real private incentive environment to produce will continue postponed.

The growth of current expenditure fixed and inflexible, also covered by oil revenues of varying nature will accentuate the deterioration of public finances, sending unmistakable signs of fiscal unsustainability. It has announced additional costs for nominations of 40,000 teachers, salary, health and education increases well as others demanded by the State model. Spending on wages

ECONOMICAL EXPECTATIONS 2012

Econ. Jaime Carrera Director of Fiscal Policy Observatory

across the public sector has increased from 7.5% to 13% of GDP. When since the action of the state society is invited to live of the benefits from public expenditure sustained by oil and debt, this is used to an easy status that is unresponsive to their actual production capacity. By the time that spending cannot stand, debts cannot be paid and the economy does not respond, the social benefits should be limited, public spending should be reduced and the economy should adjust to settle at its true dimension. People see their living standards deteriorate and companies suffer huge losses. It is the path trodden by Greece and other European countries and the U.S.. The year 2012 will be another step in this direction, without appropriate corrections that can be perceived. Trade, progressive red numbers The high public deficit will be accompanied by its parallel in the country's external accounts. State spending will continue determining factor in the increase of imports, therefore, in the increasingly negative balance of non-oil trade balance (chart 2). The increase in oil exports as the government hopes, by increased production of oil, does not guarantee the stability of the external sector due to the volatility of prices. Imports of petroleum products will increase by the growing consumption and repairs on the Esmeraldas refinery, further deteriorating external accounts. The weakness of the economies that buy products to the country, lack of competitiveness in the export area, lack of diversification of export products with value added, the absence of trade agreements and new markets and, in general, lack of conviction in a policy open for commercial development, are factors to keep in the future as an obstacle to the strength of the external sector of the economy, foundation of economic growth.

Growing gaps with the rest of the world. Shortening the development gap with advanced countries is a sin equa non for reducing poverty and raising living standards of the majority. However, 2012 does not present encouraging prospects in this direction. The position 105 in the Global Competitiveness Ranking of 105 countries is not a good note for progress, the set of conditions to overcome this position will not be a priority. The business climate will suffer a marked deterioration in both, internal and external economic conditions, for the approval of the Law on Control of Market Power, which will deepen the static view the model that, per se, is adverse to the free exercise of individual liberties. Therefore, the position 130 among 183 countries in terms of ease of doing business, rather it may degrade.

Equal reflections are valid as to the country's position in the rankings for Information Technology and Telecommunications, Economic Freedom, of Economic Climate in South America, and many other global standards in which Ecuador occupies unfortunate positions. Even in Latin America, growth prospects and competitive progress in many countries are higher than in Ecuador.

Lost Advancement Time Next year will be more obvious the signs of unsustainability of the populist-authoritarian statist model. The high spending and unsustainable public investment with more debt and high oil prices, the continued deterioration of the non-oil trade balance and external accounts, the low dollar reserves, the low economic growth, inefficiency and inadequacy of social spending despite the substantial oil revenues, high unemployment and underemployment, limited per capita GDP, high levels of poverty, etc.. are factors that magnify lost advancement time in the years of exercising the model.

The 2012 pre-election year, will present the scenario to measure the costs of progress achieved in the future given the need to adjust the size of the public sector to the economic capacity of the country, to rearrange economic variables to return to the path of growth based in private dynamics, real progress in trade and integration into the global flow of capital, constitute to each Ecuadorian a competitive globalization shareholder.

Chart 1

Direct Foreing Investment

Dollars Per Cápita

Country 2.010

Brasil 251

Chile 878

Peru 248

Colombia 149

Argentina 153

Uruguay 485

Bolivia 62

Paraguay 42

Ecuador 12

Venezuela -48

Mexico 163

Panama 670

Costa Rica 310

Honduras 105

Guatemala 47

Nicaragua 87

El Salvador 15

Source: CEPAL

Chart 2

Public Expediture, Non-oil commercial Balance, GDP Growth.

Year Public Expediture Non-oil commercial

Balance Variation Rate

% GDP $Milions of GDP

2000 24,3 -728 4,1

2006 23,6 -3715 4,7

2007 27,1 -4.336 2

2008 40,2 -7.281 7,2

2009 39,6 -4.860 0,3

2010 42,1 -7.609 3,6

2011* 46,1 -8.821 5,2

2012* 46,1 -9.410 4,2

Source: Finances Ministry * Estimated

Chart 3

Some Indicators in Greece

Concept 1976 2009

Transferencias sociales. (% PIB) 8 21

Public wages (% PIB) 8 12,7

Non-public employees 282.000 768.000

Public debt (% PIB) 20 140

Public expediture (% PIB) 30 52

Source: OCDE