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Pablo Lucio Paredes

October 2011

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Visiting economist speaks on Ecuadorean society

Language, continents, customs and more than 3,100 miles separate De Pere and Quito, Ecuador. But they share a common currency – the U.S. dollar – and a love of sports.

While Ecuadoreans are not as crazy about soccer as Argentineans or Brazilians, they are ardent supporters of their teams, says Ecuadorean economist, author and consultant Pablo Lucio Paredes. He will present the lecture “Is Society in Latin Oil-Producing Countries Really Different?” at 6:30 p.m. on Oct. 11 in the Fort Howard Theater. The lecture is free and open to the public.

Lucio Paredes is economics chair at the Universidad de San Francisco de Quito, with which St. Norbert shares a study-abroad program. He will be in the Green Bay area Oct. 3-14 as part of the St. Norbert College/University of Wisconsin-Green Bay International Visiting Scholar Series.

The former journalist, TV personality, entrepreneur and national minister of finance holds a master’s degree in nuclear physics and a doctorate in economics from the Sorbonne. He authored “Soccer Is No More a Dream” when Ecuador qualified for its first World Cup nearly 10 years ago.

Sound management fuels soccer success
Although Ecuador’s best soccer team has an annual budget of only $7 million and the level of play in local tournaments is low, the country has been successful in international competition, says Lucio Paredes.

The national team played in the 2002 and 2006 World Cups, and its best team, LDU of Quito, has won the last four major South American competitions.

The teams have done so well because of “professional organization, continuity in management and technical direction, and a good development of our skills,” says Lucio Paredes.

Low payrolls have led some 20 players – including the country’s best player, Antonio Valencia, now a winger for Manchester United – to move to teams in other countries with “better markets, brands, global connections and advanced marketing.”

For example, Valencia’s team in Ecuador traded him for some $7 million to a Spanish club that a few years later traded him for $28 million to Manchester.

The great issue, Lucio Paredes says, is keeping those players longer so they generate more value for the Ecuadorean clubs. The solution, he says, is to “have more valuable and attractive continental competitions.”

An oil-producing economy has its challenges, too
Similar economic challenges confront Ecuador, and most South American countries, in other industries, he says. “We sell cheap products – cocoa, for example – and we buy the most expensive – chocolate made from our cocoa.”

The solution is to offer more value-added products, such as banana baby food instead of raw bananas, and to penetrate the whole economic chain to sell directly to consumers, as Colombia does with coffee, he says.

One thing Ecuadoreans are pleased with is their switch in January 2000 to the U.S. dollar after a rapid devaluation of their own currency, the sucre. This devaluation followed what Lucio Paredes calls “the seven plagues of Egypt” in 1998-99: bad weather, a severe drop in the price of oil (Ecuador’s leading export) and financial problems.

While using the dollar means “that you don’t have your own monetary policy,” he says, “in the medium and long term I think it is better not to have that freedom.”

Eighty percent of Ecuadoreans are satisfied with the dollar, Lucio Paredes says. “Our actual president is rather popular, but people say that the only thing more popular than the president is the dollar.”

Oct. 4, 2011

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