Commentary

Letter to the Editor: Ecuador Clings to the Greenback

Dear Sir,

The reportage by John Paul Rathbone and Andres Schipani (“Ecuador’s starring role as champion of human rights beset by contradictions,” June 25) states that “… Ecuador’s economy is pegged to the US dollar.” No. Ecuador is dollarized.

On 9 January 2000, President Mahuad announced that Ecuador would abandon the hapless sucre and replace it with the US dollar. By 2002, the process of official dollarization was complete. Since then, Ecuador has endured a great deal of political instability. But, thanks to dollarization, the economy has turned in a most respectable performance. That’s why President Correa, for all his bluster directed towards the US, clings to the greenback.

Steve H. Hanke is a Professor of Applied Economics at The Johns Hopkins University in Baltimore and a Senior Fellow at the Cato Institute in Washington, D.C.