As far as I can see off the Reuters, the country is in a pretty bad way, but not very much worse than Mexico in '94 and certainly not as bad as it got in Asia (Russia is another matter). This is exactly the sort of time when the government ought to be keeping its head when all around it are losing theirs, and agreeing a deal -- any deal -- with the IMF, to try to get some sort of finance and let the external balance take the strain.
Instead, they seem to be going ahead with a mad dollarisation plan -- does anyone know if Steve Hanke is in the area? The PetroEcuador strike seems to be related to this plan, which is not exactly calculated to help the worst-off in society. They're demanding the president's resignation, but if Mexico is a precedent, they'll settle for money.
The thing that seems mad to me is that Ecuador has announced reserves of US$1.28bn (up 2.5%). As an import cover figure, I'd have thought that was about 3 or 4 months -- as a money supply for the whole country, it looks woefully inadequate.
On the other hand, assuming that they manage to do a deal with PetroEcuador that keeps the oil flowing, this could very well be the lowest ebb which is the turn of the tide -- Camdessus has just been on the wire saying that the dollarisation idea, while mad, won't jeopardise the EFF. The protests could get nasty, as they are basically organised by the indigenous population, so they can't expect anything like fair or even sane treatment by the police. But in macroeconomic terms, I don't see them as a force.
The boys chatting on "bradynet.com" don't seem to be worrying unduly, and indeed don't think that dollarisation will happen:
http://eve.bradynet.com/cgi-bin/cyberexchange?authorization=GUEST&ticker=ec pdi
dd
Please respond to lbo-talk at lists.panix.com
To: lbo-talk at lists.panix.com cc: (bcc: DANIEL DAVIES) bcc: DANIEL DAVIES Subject: Ecuador
Ecuador seems to be blowing up - economic crisis, strikes, protests. Does anyone know what's going on?
Doug
___________________________________________________________________________
_____
---------------------------------------------------------
This email is confidential to the ordinary user of the
e-mail address to which it was addressed. If you are not
the intended recipient, please notify the sender
immediately on (44) 171 638 5858 and delete the message
from all locations in your computer. You should not copy
this email or use it for any purpose, or disclose its
contents to any person : to do so may be unlawful.
Email is an informal method of communication and is
subject to possible data corruption, either accidentally
or on purpose. Flemings is unable to exercise control
over the content of information contained in
transmissions made via the Internet. For these reasons
it will normally be inappropriate to rely on information
contained on email without obtaining written confirmation
of it.
----------------------------------------------------------
___________________________________________________________________________ _____
---------------------------------------------------------
This email is confidential to the ordinary user of the
e-mail address to which it was addressed. If you are not
the intended recipient, please notify the sender
immediately on (44) 171 638 5858 and delete the message
from all locations in your computer. You should not copy
this email or use it for any purpose, or disclose its
contents to any person : to do so may be unlawful.
Email is an informal method of communication and is
subject to possible data corruption, either accidentally
or on purpose. Flemings is unable to exercise control
over the content of information contained in
transmissions made via the Internet. For these reasons
it will normally be inappropriate to rely on information
contained on email without obtaining written confirmation
of it.
----------------------------------------------------------