Ecuador MANUFACTURING
Workers in a cooperative in Chimborazo Province
Courtesy Inter-American Foundation (Miguel Sayago)
Sewing children's clothes in a small shop in Guayaquil
Courtesy Inter-American Foundation (Miguel Sayago)
Industrialization occurred later in Ecuador than in most other
Latin American countries. As late as 1960, the small industrial
sector consisted almost entirely of textile production, food
processing, and artisan activity. Manufacturing began to develop in
the mid-1960s, and during the 1970s, spurred by petroleum revenues
and exports to other nations in the Andean Common Market (Ancom,
also known as the Andean Pact), manufacturing became the most
dynamic sector of the economy. Manufacturing stagnated in the
1980s, however, with an average annual growth of only 0.8 percent
for the period 1981-87. In 1987 it accounted for over 17 percent of
the GDP.
Food processing and textile manufacturing accounted for almost
60 percent of the total value of manufacturing in 1986. Nonmetallic
minerals and metals comprised 12 percent of the total value; all
other industries accounted for the balance (see
table 14,
Appendix).
Most industrial establishments were small and barely more than
handicraft operations. A government industrial census in the early
1980s listed more than 35,000 firms, but only 28 of these had more
than 500 employees; more than 31,000 had from 1 to 4 workers.
Individual proprietors owned and managed most firms. Shoemaking
shops, woodworkers, or furniture makers represented nearly half of
the establishments listed in the census.
Guayaquil was the most important industrial center, followed by
Quito. Together the two cities accounted for about two-thirds of
total factory employment. Agricultural and beverage processing
plants, sawmills, shipyards, iron foundries, and cement and
chemical plants were Guayaquil's main industries. Textile
production and food processing topped the list of industrial
activities in Quito. The government had made an attempt in the
early 1970s to disperse industrial activity by promoting industrial
parks in other cities, with some success.
Sugar refining, rice milling, and flour milling were among the
largest sectors in the food-processing industry. Two sugar mills
dominated the industry and processed most of the sugar used
domestically. Rice milling was concentrated in the Costa and
consisted of numerous publicly owned mills, as well as many smaller
private ones. Most flour mills were located near larger cities in
the Sierra and used locally grown wheat; the three large flour
mills near Guayaquil used mainly imported wheat. Ecuador also had
a large baking industry, and nearly all cities had commercial
bakeries producing bread and cakes.
The textile industry, which ranked next to food processing in
value of production, was concentrated in the Sierra, where it
originated as an outgrowth of home weaving. Most textile plants
remained small, although one Quito firm was among the largest
employers in the country.
The construction industry showed a steady decline during the
1980s and accounted for only about 4 percent of the GDP in 1987.
Because over 95 percent of the construction in Ecuador resulted
from government-financed projects, the industry remained highly
vulnerable to periods of austerity in government spending. Indeed,
the sector's only growth year in the decade of the 1980s occurred
in 1987, reflecting large-scale highway rebuilding after the
earthquake. High interest rates and a shortage of cement also
hampered construction projects.
Artisan activity constituted a large part of the manufacturing
labor force. Although many of the artisans had considerable skills
in such occupations as weaving, their wages were among the lowest
in the labor force, and as machine-weaving became more widespread
their skills were increasingly obsolete. In the 1980s, the
government offered special credits and loans to encourage a
transition from artisan workshops to small factories.
The largest number of artisans produced clothing and furniture.
This group included dressmakers, tailors, shoemakers,
cabinetmakers, and carpenters. Several thousand additional artisans
were goldsmiths or silversmiths.
Data as of 1989
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