научный журнал «Актуальные исследования» #26 (105), июль '22

Bilateral economic and political relations between Ecuador and Russia in modern conditions

The article deals with the key issues of political and economic relations between Ecuador and Russia. It is emphasized that for Russia the countries of Latin America today are a strategic foreign policy vector, and for Ecuador the Russian market is of particular interest in connection with the strategy of expanding foreign trade as the main factor in the development of the national economy. The problems that hinder the more active development of Russian-Ecuadorian relations are noted, namely: socio-political instability in Ecuador, the growth of influence in the United States, the situation associated with anti-Russian sanctions, serious problems in supply chains, the consequences of the Covid-2019 pandemic. The author concludes that to expand Russian-Ecuadorian cooperation, it is necessary to increase the initiative of the parties, the absence of political conjuncture, the search for effective ways to solve logistical problems, and the stabilization of the political situation in Ecuador.

Аннотация статьи
Russian-Ecuadorian relations
foreign trade
bilateral relations
Latin America
Ecuador
Russia
Ключевые слова

Acknowledgements for support to the Secretariat of Higher Education, Science, Technology, and Innovation (in Spanish SENESCYT), Postal Code: 1701518, Quito-Ecuador.

Introduction

Latin America was traditionally considered a strategically important region for the Soviet Union, and the Latin American vector long dominated its foreign policy. However, the collapse of the Soviet Union and the ensuing consequences led to a weakening of ties with the states of the region. At present, in the context of attempts by Western countries to isolate Russia economically, caused by the Russian army's special operation on the territory of Ukraine, expanding ties with Latin American countries seems extremely relevant. Despite the fact that Russian-Latin American relations have great potential for development, today it is possible to state the fact that this potential is not even half-fulfilled.

Although there has been a growing interest in the Latin American region in recent years in academic journals published in Russia, the specifics of bilateral relations with individual countries are virtually undiscovered. For example, despite the fact that Ecuador is Russia's second largest trading partner in the Latin American region, very few authors have devoted their works to the Russian-Ecuadorian relations. Although these relations have enormous potential, they are fraught with several challenges in the current political, economic, and social climate. All of this makes it necessary to study Russian-Ecuadorian cooperation in more depth and look for the most effective ways to develop it further.

Peculiarities of Russian-Ecuadorian political relations.

The last decade has witnessed Russia's sustained interest in the Latin American region and attempts to strengthen cooperation in various fields - political, trade, investment, cultural, technological and others. As fairly noted, Karpovich O.G. and Shangaraev R.N., for Russia in recent years there is a new prospect of profitable long-term relations in case of flexible diversification of interests [2, p. 26-30]. And V.L. Heifetz emphasizes the so-called "return" of Russia to Latin America [8, p. 521-533].

The countries of the Latin American region and Russia have common political strategies, advocate the sovereignty of modern states and non-interference in internal affairs, commitment to international law, strengthening international security, multipolarity, etc. [6, с. 17-32]. Ecuador as one of the key partners of Russia in the Latin American region adheres to the same principles. It should be noted that particular successes in strengthening political cooperation between Russia and Ecuador were achieved during the presidency of R. Correa who was aimed at active development of multi-vector relations with Russia. For example, just a year after Correa came to power, in 2008 the countries signed a protocol on the development of cooperation relations in the field of civil defense and disaster management; in 2009 a declaration was signed on strategic partnership, including in the peaceful uses of atomic energy, information technology, energy and security. Over the past decade, there has also been an agreement on visa-free travel between the countries, a law "On Ratification of the Treaty between the Russian Federation and the Republic of Ecuador on Extradition" was adopted in 2020 and an agreement on cooperation in the field of mass communications was signed.

For the first time in the history of diplomatic relations between the two countries, the Ecuadorian president visited Russia. Also, since 2007, one could notice an increase in activity in inter-parliamentary and inter-institutional contacts between the countries - visits to Russia by representatives of the Ecuadorian National Assembly, the National Chamber of Accounts, and the National Electoral Council of Ecuador. Since 2019, meetings of the Russian-Ecuadorian Intergovernmental Commission on Trade and Economic Cooperation have been held [4].

Major trends in economic relations between Russia and Ecuador

Economic relations between Russia and Ecuador have developed successfully over recent decades, but according to experts, their potential has not been sufficiently unlocked (Ecuador's share in Russia's foreign trade turnover is no more than 0.2% in the structure of Russian trade turnover with the world). In 2021, Ecuador became Russia's second-largest trading partner in the Latin American region in terms of trade turnover, overtaking Argentina and yielding only to Brazil. In 2021, the volume of Russia-Ecuador trade cooperation increased by 28.8% (in monetary terms the trade turnover amounted to $1.92 billion). The main indicators of foreign trade between the countries are presented in Table.

Table

Foreign trade criterion

Indicators

Trade between Russia and Ecuador

1.92 billion.

Trend in turnover compared to the previous year

28,8%

Russia's exports to Ecuador

$460.4 million.

Dynamics of Russia's exports to Ecuador compared to the previous year

113,7%

Ecuador's exports to Russia

1.46 billion.

Dynamics of Ecuadorian exports to Russia compared to the previous year

14,4%

Source: compiled by the author from: [3]

Based on the data presented above, it can be concluded that Ecuador is more interested in the Russian market, as its exports to Russia are more than three times higher than Russian exports to Ecuador. The largest share in terms of product categories imported from Russia to Ecuador is observed for oil and petroleum products, chemical products, metals, timber, machinery and equipment. Ecuador exports mainly food products to Russia (fish and crustaceans, bananas, cocoa, and flowers) [3].

In addition to trade cooperation, it is important to consider other areas of economic relations, namely investment cooperation. Even though Latin America is now a strategic region for Russia, joint investments are rather underdeveloped. Most investments are made by representatives of the Russian side and among large corporations (Rosneft - exploration of oil fields in Ecuador; Inter RAO - construction of the Toachi-Pilaton energy complex; AvtoVAZ - construction of the assembly plant for VAZ cars) [1]. Ecuadorian investments in Russia are sporadic and mostly involve small and medium-sized projects.

Challenges for the further development of Russian-Ecuadorian relations.

Despite the positive development of relations between Russia and Ecuador in recent years, there are a number of challenges in continuing their cooperation today. For example, bilateral political relations between Ecuador and Russia will depend primarily on Ecuador's continued stance on the Russian sanctions issue. Although the country has joined the UN resolution on Russia, Ecuador is trying to maintain its neutrality between the United States, whose influence in the country has continued to grow in recent years, and Russia, with which Ecuador intends to continue developing multi-vector cooperation. However, such a balance is extremely difficult for the Ecuadorian government. Several experts emphasize that the threat of a "new bipolarity" in Latin America as a whole, which the US is actively trying to establish in the region, imposing neoliberal economic concepts and political manipulation [7, p. 153-167]. The role of China is also growing in the region, which considers the Latin American countries as the sphere of its interests [9, p. 31-58]. China's economic interests in the Latin American region are associated primarily with its resource potential, as well as with the available market for finished products and capital investment areas [5, p. 30-46]. In this regard, Russia faces a serious situation of severe political and economic competition in the region.

Due to the socio-political conflict that began to unfold in Ecuador in June 2022, the issue of power stability in the country today raises a number of questions. If Lasso G. remains in power, then in the next few years we can expect problems in Russian-Ecuadorian relations to intensify, as Lasso's course is aimed at more active development of relations, mainly with the United States.

In addition, the further development of Russian-Ecuadorian relations may be affected by the effects of the Covid-2019 pandemic, which has already led to a decrease in purchasing power in the two countries and a drop in demand for certain goods (for example, demand for Ecuadorian flowers and other plants from Ecuador has dropped in Russia). The economic crisis caused by the pandemic may also affect the volume of investment projects implemented by the two sides.

The logistical problems that Ecuador and Russia are currently facing are also noteworthy. For example, Ecuadorian goods destined for Russia go by sea to European ports (Amsterdam, Rotterdam) and are then transported overland to Russian territory. The tightening of anti-Russian sanctions has led to cargo blockages, resulting in delivery delays, making it necessary for the parties to find alternative logistical chains.

Conclusion

The unstable political, economic, and social situation in which both Russia and Ecuador find themselves today affects the prospects for future relations between the countries. However, bilateral Russian-Ecuadorian cooperation can be expected to develop, albeit less actively, both politically and economically and in areas such as culture, sports, and education. Such multi-vector cooperation will contribute to achieving the most important goals for both Russia and Ecuador. Nevertheless, for such relations to develop more actively, political initiative of the parties, constant search for common ground as well as minimization of problems hindering further development of Russian-Ecuadorian relations are necessary.

Текст статьи
  1. Ministry of Foreign Affairs of Russia. Official website [Electronic resource] Mode of access:http://www.mid.ru/ru/maps/ec//asset_publisher/CFYBCMnKwk3G/content/id/539574 (accessed 04.07.2022)
  2. Karpovich O.G., Shangaraev R.N. Prospects for Russia's Cooperation with Latin American Countries // Russian Journal of Management. 2019. №2. P. 26-30.
  3. Report on foreign trade between Russia and Ecuador in 2021: trade turnover, exports, imports, structure, goods, dynamics. - Russia's foreign trade [Electronic resource]. Access mode: https://russian-trade.com/reports-and-reviews/2022-02/torgovlya-mezhdu-rossiey-i-ekvadorom-v-2021-g/ (date of access: 06.07.2022)
  4. Embassy of the Russian Federation in the Republic of Ecuador. Official website. [Electronic resource]. Access mode: https://ecuador.mid.ru/ (access date: 06.07.2022).
  5. Safronova E.I. Latin American vector of China's current foreign policy // Latin America. 2020. №2. P. 30-46.
  6. Trojansky M.G. Modern Latin American vector of Russia's foreign policy // Bulletin of the Diplomatic Academy of the Ministry of Foreign Affairs of Russia. Russia and the World. 2018. №3(17). P. 17-32.
  7. Trojansky M.G., Karpovich O.G. Latin America through the prism of modern global changes // Bulletin of the Diplomatic Academy of the Ministry of Foreign Affairs of Russia. Russia and the World. 2021. №1(27). P. 153-167.
  8. Jeifets V.L. Dreaming on Latin America: Reflections on Russian Diplomacy in the Region // Vestnik RUDN. International Relations. 2020. Vol. 20. №3. P. 521-533.
  9. Serbin A. ¿Un triángulo escaleño? América Latina y el Caribe, China y los Estados Unidos y las narrativas del nuevo ciclo // Anuario de la Integración Regional de América Latina y del Caribe. 2016. №13. P. 31-58.
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