Ecuador - Defense Industry

Ecuador has a small but growing market for U.S. high technology defense and dual use products. The economy maintained growth rates in the 3-4% range during the mid-1990s. The greatest opportunities are and will continue to be in telecommunications equipment and services, both for the commercial and military sectors. However, opportunities also exist for commercial aircraft, environmental equipment and services, medical equipment, and military equipment of various types.

The Ecuadorian Army owns and controls a group of industries. These industries are located under the Office of Industries of the Army, known by its acronym, DINE. DINE's industries include the production of explosives, munitions, uniforms, shoes and boots, tents, packs, and miscellaneous military gear. DINE also participates in a variety of joint ventures in non-military fields. The Navy controls two shipping lines and the Air Force controls Tame Airlines. Traditional suppliers of defense equipment have been Germany, the US, Great Britain, France, Israel, Brazil, and more recently China.

Bids for military or dual use equipment normally are not advertized. Sellers employ an Ecuadorian agent to pursue sales. Foreign bidders must be legally represented in Ecuador or associated with an Ecuadorian company in order to bid. There are no barriers to American firms receiving bids. U.S. companies should consider the use of the agent distributor service and gold key service to find appropriate agents. The Ministry of Defense is responsible for defense trade.

Some business sectors complain about the existence of military enterprises, considering that they are disloyal competitors and remove the military from their specific missions. Other entrepreneurs, on the other hand, look for security in their investments by participating jointly with the military enterprises, which provokes ample concern among those who believe that there is an alliance of the dominant sectors with the military, thus augmenting their power.

National defense industry is constituted by industrial enterprises and services, under the responsibility of the armed forces. Actively supporting the development of the national economy; It employs skilled and contributes to the growth of Ecuadorian society.

The defense industry is a driving force of investment in research, development and innovation (RDI), generates new jobs which contribute to the economy of the Ecuadorian State. The Ministry of national defence harmonizes the efforts of the military companies through greater coordination to produce, at the lowest cost and with maximum performance, products and services required by our armed forces, focusing on the areas: harmonization of the demand for military equipment, research and technological development, as well as support for small and medium-sized enterprises in the country.