Last Tuesday, we cited Forbes editor-in-chief Steve Forbes' advice to President Javier Miley to urgently dollarize the economy as he promised during the election campaign.
Now, we all have a huge, almost existential doubt: What would our daily lives be like under a dollarized system?
We have Ecuador as an example. There, dollarization was implemented in 2000, when the country was going through a serious financial and social crisis.
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Dollarization consists of replacing the sucre, the national currency, with the US dollar, as legal tender.
Walter Spurrier is an Ecuadorian and an economist, which are two reasons why he can tell us so well about how the process unfolds.
How does the process begin, what happens to people, and how does it affect them?
What about prices and wages?
Why has the country become competitive in your opinion? Because today Christina Kirchner said that dollarization means “losing the possibility of development forever.”
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Key phrases of the interviewee
• With dollarization, inflation stopped completely in Ecuador. This prevented people from losing purchasing power, and the dollar was well received by the population. Whoever has his money knows that he does not lose his purchasing power.
• It is the rule that opens doors and closes others. Ecuador should have opened up to international banking to get more credit, and this did not happen because there is a more closed economy mentality being discussed internally.
• If one follows its economic policy, it has many advantages. If not, you have problems.
• In Ecuador, we have not maintained adequate public spending.
• I don't think a central bank is necessary.
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The entire talk is in the attached audio.
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