Uh, no. SOCIALISM was hurting the Ecuadorian economy.
Dollarization was actually stabilizing it. Ecuador has gone through several collapsed currencies. They have a whole museum dedicated to it in downtown Quito in the old central bank building. Dollarization has actually contributed to a relative level of stability in Ecuadorian history.
I didn’t know that, I’ll have to check it out. Thanks.
The only reason I know so much about is I took a tour of that museum, lol. There's fat stacks of cash, bags of cash everywhere in the museum. Their old currency, not US dollars. Nobody steals it because it is worthless. They don't even need to lock it behind glass or in a safe. It's completely worthless. Not worth the paper it's printed on, as they say. When Ecuador switched to the US dollar, it initiated the longest period of stability and growth in Ecuadorian history because it installed a level of trust and stability in the system.
There are some downsides. The Ecuadorian government is socialist and manipulates the value of the dollar by subsidizing certain things to keep prices artificially low on certain goods and services. There are very high tariffs on foreign goods to protect domestic industry, except there is no domestic industry to protect. This stifles economic growth by making imports too expensive for most people to buy. There is a perpetual cash shortage, but this is caused by other internal cultural factors, not just the government. The cash shortage has actually been around since the founding of the country, but having to import the money supply can exacerbate it. So in Ecuador, you will see the phenomenon of lots of things being either very cheap or very expensive and not much mid range.
In exchange for building the roads, highways, bridges, ports, and drilling the oil, China gets a free pass to import and sell their goods without tariffs. So there is a lot of cheap Chinese crap in Ecuador.
Thank you so much for that explanation, I appreciate it.
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