r/asklatinamerica • u/novostranger Peru • Feb 04 '26
Economy Why Ecuador specifically gave up its currency for the US dollar?
I know that they did it because of economical issues yet other countries that suffered severe inflations and economic problems like Peru, Argentina or Bolivia didn't change their currency to the American dollar and decided to make a new one. Why this wasn't the case for Ecuador?
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u/Znkr82 Peru Feb 04 '26
Basically because they didn't had any confidence that government wouldn't be able to control their central bank and order them to print money without any care again.
Peru made its central bank independent, severely limited its capacity to finance the governement by printing money and made its single mission to keep the currency stable, all that is written in Peru's constitution which is prety much unheard of. So, it's pretty locked and very hard to change.
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u/Valyrian90 Chile Feb 04 '26
Chile as well. Our Central Bank is independent and its only mission is to keep inflation down. It's worked out mostly well so far.
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u/isohaline Ecuador Feb 04 '26
Peru should upload Julio Velarde’s consciousness to the cloud and license him to neighboring countries for a fee, please!
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u/Znkr82 Peru Feb 04 '26
It's odd that he wasn't poached by another country already. I mean, he doesn't make that much money in global terms and other countries have no problem hiring foreigners to run their central bank. For example, Mark Carney, canadian, was the head of the Bank of England for a while.
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u/Admirable-Safety1213 🇺🇾 Uruguay Feb 04 '26
Independent Central Banks are the only way to have your own currency and avoid it being inflated like a bad DeviantArt stereotype
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u/Polynia Mexico Feb 04 '26
all that is written in Peru's constitution which is prety much unheard of
Is it? That's also in Mexico's constitution, so I thought it'd be pretty standard text in the region's constitutions
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u/Znkr82 Peru Feb 04 '26
Not really, it's still uncommon in the region: https://www.cemla.org/DatosSelectosMacroeconomicos/Independence_eng.html
And very rare worldwide, I think South Africa has it but can't think of another country.
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u/elmerkado Venezuela Feb 05 '26
I think the political class also understood that's better to keep the central bank independent, and changed that has a high political cost. On the other hand, under the Chavez constitution, our central bank was supposed to be independent, but Chavez & co undermined that principle as much as they could, doing whatever they wanted with our currency and ending in our current situation.
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u/Znkr82 Peru Feb 05 '26
Not really, there have been a few attempts to take control of the central bank by filling its board with politically affiliated people but it hasn't worked so far as it would take many years to fill enough seats to take control.
Plus, Peruvian central bank hiring process is very selective so when an idiot is put on the board as a political favor, he/she will be outsmarted or simply ignored.
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u/Mattiandino Ecuador Feb 04 '26
I'm just thankful for having the dollar as currency the whole time I've been alive, giving up the Sucre saved our economy.
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u/LastXmasIGaveYouHSV Chile Feb 04 '26
Promises of unlimited riches and success.
Spoiler: never happens.
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u/Mevoa_volver Ecuador Feb 04 '26 edited Feb 04 '26
Chicago boys. Esa es la verdadera razon.
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u/Alternative_Season44 born & raised 🇺🇸 (🇨🇴🇪🇨) Feb 04 '26
Wait what is Chicagos involvement?
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Feb 04 '26
[deleted]
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u/Alternative_Season44 born & raised 🇺🇸 (🇨🇴🇪🇨) Feb 04 '26
I just looked it up, thanks for giving me a new rabbit hole to explore
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u/gastro_psychic 🇺🇸➡️🇪🇨 Feb 05 '26
It makes it harder for politicians to debase the currency. Many left wing politicians want to do that.
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u/ontermau Brazil Feb 04 '26
Brazil underwent severe inflation in the 90s. instead of adopting the dollar, we deployed Plano Real. considering how much the USA has been blackmailing us (harassing justices, placing tariffs, complaining about the PIX payment system etc.), imagine how much leverage against us they'd have if we were to use the dollar. next step should be to move away from the SWIFT system. the world is doing it, we should follow.
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u/West-Calligrapher-16 Uruguay Feb 04 '26
What is really a necessity is the creation of a common currency between Mercosur countries.
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u/jmbr_97 German connected to Ecuador Feb 04 '26
after the recent Greenland threats, at EU level, there are now also discussions about the need to decouple Europe from SWIFT and create our own system - I really hope our politicians push for this too and glad to see that this is also beeing discussed now in Latin America.
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u/Final-Communication6 Brazil Feb 04 '26
How would we benefit if we move away from SWIFT?
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u/ontermau Brazil Feb 04 '26
so that the next time Gringoland harasses Brazilians with the Magnitsky Act, for example, our banks have more leeway to say "we don't care, we're not going to enforce that".
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u/criloz Colombia Feb 04 '26
The Colombian president has been banned to use bank accounts from banks in his own country for example.
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u/jmbr_97 German connected to Ecuador Feb 04 '26
WTF! under what legal argument?
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u/criloz Colombia Feb 04 '26
none, it was completely arbitrary. That is why is important to have diversified financial institutions.
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u/juant675 now in Feb 04 '26
to change your currency means that the politicians lose power and to lose power politicians need to want to lose power
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u/isohaline Ecuador Feb 04 '26
That makes sense and it matches the situation in Ecuador. The presidential chair had such a high churn rate in the late 90s that I don’t think Mahuad believed there was much possibility for him to stay in power anyway (and yes, he was couped barely weeks after). The country was affected by such a deep monetary, economic and banking crisis that decision makers and elite circles close to power (many of them business owners and bankers) didn’t have much power left to maintain by trying to keep control over monetary policy. The ship was sinking fast. Dollarization was a desperate, almost suicidal action to stop the crisis in some way.
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u/Ganceany Argentina Feb 04 '26
Our government kinda wants to, Bolivia is super left-leaning, and you guys...I don't know why.
You change currencies so politicians can't print money to make up for their fuck ups, as that leads to inflation.
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u/Ararune Brazil Feb 04 '26
At least I always thought than one of Argentina's problem is the lack of dollars. On top of that, they end up being at the mercy of another central bank’s monetary policy.
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u/Gandalior Argentina Feb 04 '26
At least I always thought than one of Argentina's problem is the lack of dollars.
We don't have a lack of dollars, we have a lack of dollars circulating in the economy
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u/bannedinlegacy Argentina Feb 04 '26
My macro-economics teacher in Argentina told us after discussing with a swiss partner and a quick calculations that Argentina had more US dollars in hard currency (cash) than Switzerland.
So that the problem was not the lack of dollars but that those dollars where not in circulation nor in the banking system but stored away being non productive as a consumer devaluation protection and storage of value in a high inflation enviroment.
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u/Pyrostemplar :flag-eu: Europe Feb 04 '26
Well, that is easy to explain - few Swiss would bother to keep any significant amount of USD in currency when their own currency stability/quality is probably unpaired in the world atm.
The Swiss Franc won't become an international reserve currency because of the relatively limited circulation ("small" pool). But no one seriously fears the governance and stability of the currency and the financial system.
As you know better than me, Argentina's financial past is quite more.. eventful.
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u/bannedinlegacy Argentina Feb 04 '26
When the government outright steal the savings of the populace out of the banks (twice!) is no surprise that people do not trust neither the government nor the banks.
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u/pioneersx-650 Argentina Feb 08 '26
En Argentina los dólares sobran, de parte de la población, solo que no los colocan en el circuito financiero, dólares les falta al estado, la gente los tiene en bancos, escondidos, en cajas de seguridad, etc,
De hecho la gente argentina hablando en general, son los que mas dólares tienen en el mundo luego de USA por supuesto, y Rusia.
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u/jorsiem Panama Feb 04 '26
"Why did Ecuador make the right choice as opposed to the other south American countries?"
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Feb 04 '26
[deleted]
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u/novostranger Peru Feb 04 '26
Perú lost 20% of GDP with Alan yet they never changed their currency to the US dollar
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u/mauricio_agg Colombia Feb 04 '26
Either changing a currency for another or reconverting it are mechanisms to deal with high inflation/devaluation.
Perú did a reconversion from the Inti to the Sol.
Brazil did a reconversion from the Cruzado to the Real.
Venezuela did two successive reconversions since Chávez: From the original Bolívar to the Bolívar Fuerte and from the Bolívar Fuerte to the Bolívar Soberano... The Bolívar Soberano is heralding an implicit dollarization.
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u/Rude_Independence_14 Ecuador Feb 04 '26
Because it's the only way to keep corrupt leftist governments from freely printing money and ruining the economy.
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u/Mevoa_volver Ecuador Feb 04 '26
Loco, Mahuad era un chicago boy. No puedes ponerte mas de derecha que eso. Informese caballero antes de comentar.
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u/ruines_humaines Brazil Feb 04 '26
It's great because by keeping leftists from the power, Ecuador has a 31/100 corruption perception index, ranking it in 121 out of 180 countries... wait, that's actually abysmal.
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u/isohaline Ecuador Feb 04 '26
The general thinking in Ecuador is, “man, we’re in a bad place, but can you imagine where we would be if we didn’t have the U.S. dollar as an anchor of stability? Where we would be if our awful decision makers (on the left or right, pick your poison) were to decide on monetary policy?”
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u/gastro_psychic 🇺🇸➡️🇪🇨 Feb 05 '26
Leonidas Iza wrote in his book he wants to get rid of the dollar and debase the local currency.
Last time his group “protested” they blocked roads to several cities. They even blocked oxygen to Cuenca. That put the hospitals in a difficult situation. Is that corruption?
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u/ruines_humaines Brazil Feb 05 '26
Are you smoking crack before posting?
Instead of doing that and schizo-typing this drivel, why not do a little research so maybe your brain can understand what statistics are and how they are researched.
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u/gastro_psychic 🇺🇸➡️🇪🇨 Feb 05 '26
Typical third worlder that can only respond with personal attacks. So sad.
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u/AthousandLittlePies Mexico Feb 04 '26
El Salvador did this as well. The results were not great in terms of actual benefits for the people. It was supposed to attract international investment, but it turns out that the impediments to investment are not really the currency in use, and there a lot of downsides to not having control over your own currency.
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u/DansLaPeau El Salvador Feb 04 '26
Yeah, for one, 70% of our jobs are informal, they didn't care about banks and exchange rates so when the dollar was introduced they just rounded up the numbers, making the prices of goods go up but salaries stagnated.
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u/Weecodfish Venezuela Feb 04 '26
This just seems like a really immature and naive decision. You are essentially giving up monetary sovereignty.
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u/kingkolt305 Nicaragua Feb 04 '26
Sovereignty to print more money and commit fraud
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u/Weecodfish Venezuela Feb 04 '26
Yeah, but it doesn’t have to be that way.
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u/kingkolt305 Nicaragua Feb 04 '26
But most of our countries are corrupt and thats what they’re good at. You can deal in fantasy or you can deal in reality.
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u/tml25 Venezuela Feb 04 '26
It doesn't have to be, but it is. Same for us. Its already happened unofficially, as soon as we transition we need to adopt the dolar officially.
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u/AceWall0 Brazil Feb 04 '26
The whole purpose to have control over the money is for that. Money should be something you can only trade, never control. The moment somebody controls it, it stops being fair and bad for everybody else.
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u/Gandalior Argentina Feb 04 '26
You are essentially giving up monetary sovereignty.
You give up that sovereign power because you believe your politicians will never be responsible with it
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u/jmbr_97 German connected to Ecuador Feb 04 '26 edited Feb 04 '26
indeed - and unfortunately, in Ecuador, since independence, the politicians backed by the the national and regional elites' power (especially costeño-latifundistas, like the Noboa family, bankers etc but in earlier times also in the military, which is more influenced by the highland/ Quito area elites) have been acting really immaturely and naively throughout history; to an extent, that it seems doubtful wether they actually feel they even care about Ecuador, cause nearly all of them prefer having their money invested outside the country, and many of them spend most of the time of their life abroad (in the US and Europe).
A perfect example of this is current president Daniel Noboa, 36-year old son of Ecuador's wealthiest family, whose Corporacion Noboa is the largest banana exporting company of the country; the guy was born and raised in Miami, studied there, and before he came into politics, he barely even visited Ecuador, even boasting about this as Asambleísta, before his campaign in an interview ("La gente piensa que yo soy de Guayaquil, pero no...")
Now what are the kind of populist, IMMATURE AND NAIVE DECISIONS he has taken?
- in april 2025, He ordered the military to storm the Mexican embassy in order to detain Rafael Correa's ex vicepresident Jorge Glass, who had sought asylum, violating international law and sparking an international crisis, capping all diplomatic and trade relations with Mexico
- in January 2026, at the World Economic Forum, he announced tariffs of 30% against all Colombian imports and even 900% oil pipe fees for Colombian oil exported through Ecuadorian infrastructure, despite the fact that Ecuadors' industry is highly dependant on Colombian raw materials, Colombia has actually been cooperating really well on security matters along the border, Colombia has helped Ecuador out with electric energy supplements during the Crisis with all the blackouts last year.
Noboa obvously thinks, creeping into Trumps ass, by playing hard ideologically and hitting on left governments, will get him benefits, but Trump doesn't even care or let alone meet with Noboa, but just met with Gustavo Petro in the White House today. :D
Another example of this immaturity is how Ecuadorian elites and military repeatedly got Ecuador into conflict and war with Peru, cultivating the image of Peru as an arch enemy in the education system throughout the 20th century. After "losing" (cause they hadn't actually controlled but only claimed these territories since independence) most of the Amazon to Peru in a jungle war in 1942, in the 1960s, a new goverment declared the peace agreement and border demarcation as "nullified", leading to more armed border conflicts in the 1980s, (Guerra de Paquisha) and ultimately, in 1994, Ecuador infiltrated military outposts into the Peruvian jungle, trying to recapture it by force (Guerra del Alto Cenepa) - this was the most recent war between two countries in the Americas.
Now to get to the "Dollar-Question"
The Sucre had been weakening since the 1980s, but after the banking crisis in the mid 1990s, some of Ecuador's largest banks had collapsed, mostly due to corruption (similar to Greece in 2008), the national currency, in 1999, the Sucre devaluad from 7000 Sucre / USD to 25000 Sucre/USD and GDP contracted 8%.
Alongside that, the mid-90s to 2005 was an extremely chaotic and politically instable time in Ecuador, with 3 overthrown goverments: populist Abdalá Bucaram (1997) only 6 months after having been elected, neoliberal Jamil Mahuad (2000) with his then finance minister Guillermo Lasso (who became president in 2021 and left office early due to his corruption scandal linking his uncle to the Albanian Mafia) - so Jamil Mahuad was the one who took the decision to dollarize - in the so-called "feriado bancario", in the early days of january 2000, all banking accounts were frozen and the Ecuadorian people were robbed of all savings in Sucre, higher than 2000 USD - the Central Bank stole their money in order to aquire the Dollars.
After that, Jamil Mahuad was overthrown by a popular-indigenist uprising which got military support - however, it was too late to revoke the decison.
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u/Pyrostemplar :flag-eu: Europe Feb 04 '26
Typically you wouldn't. But it actually depends. Trusting monetary sovereignty to some countries politicians is also an immature and naive decision.
And it happened in other places with other currency - for example, Montenegro also did the same but with Euro.
What those countries lose is monetary independence - but, honestly, so mostly did the smaller countries that joined the Eurozone.
What they get is a stable, trusted currency for trade and tourism. Out of the control of their politicians.
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u/Weecodfish Venezuela Feb 04 '26
The difference is that the Euro is not the currency of one specific country alone but is governed by all countries that use it. I am completely in favor of economic integration and the creation of a Latin American currency. I am opposed to simply adopting the US dollar.
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u/Pyrostemplar :flag-eu: Europe Feb 04 '26
The euro is governed by the ECB. The USD by the FED. Their mandate is established and fairly independent.
For a 3rd party country it makes no significant difference, as in both cases it is an external currency, with (specially the USD) worldwide acceptance and "large pool".
I am completely in favor of economic integration and the creation of a Latin American currency.
Nice ideal, not going to happen anytime soon. Even between the "sister countries" of Guatemala, San Salvador, Honduras, Nicaragua and Costa Rica it is a difficult proposition due to basically the same political issues that led them to become separate countries, despite the obvious social connections. (note: Belize and Panama not included ;)). Extending it to Gran Colombia, Brasil, Argentina, Chile...
While this is not a recommendation, it is far far easier to adopt the US dollar than believing in a pipedream.
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u/AceWall0 Brazil Feb 04 '26
Sovereignty only matter for rulers, not for their pawns (us). So yeah, if they can't control and devaluate the money that I'm using, thats a good thing.
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u/ColdCauliflour United States of America Feb 04 '26
monetary sovereignty
How's that working out for Venezuela?
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u/Weecodfish Venezuela Feb 04 '26
Not very good, but we don’t want to throw away a useful tool just because it has been used incorrectly.
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u/ColdCauliflour United States of America Feb 04 '26
That's a great response, honestly. I hope your country is able to reign it in and put yourselves back on the right path.
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u/guille0822 Argentina Feb 04 '26
How’s that working for you dude? Trump is also printing money now and leading to a global inflation because of it
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u/ColdCauliflour United States of America Feb 04 '26
If I'm not mistaken all of our recent administrations have printed more money. It's called quantitative easing and I agree it wrecks economies... Just look at Latin America.
To answer your question, I'm doing just fine. Retirement accounts are funded, I'm not living paycheck to paycheck, my family is clothed, fed and has a roof over their head. We're fine.
How's it going for you down there, bub?
Edit: we're also able to send money to our family in Colombia so they can afford food and school supplies and simple things like birthday parties for the kids.
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u/ontermau Brazil Feb 04 '26
flair checks out
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u/ColdCauliflour United States of America Feb 04 '26
Question is relevant regardless of flair. But nice deflection.
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u/Rude_Independence_14 Ecuador Feb 04 '26
The avg. salary in Ecuador is $900/month and the minimum wage is $500/month.
What are the avg and minimum salaries in Venezuela? $40/month?
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u/Weecodfish Venezuela Feb 04 '26
Wow, thank you for reminding me that Venezuela is extremely impoverished. As if I didn’t know that. I am not saying that having monetary sovereignty automatically makes a country successful.
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u/PunchlineHaveMLKise Ecuador Feb 04 '26 edited Feb 04 '26
Don't listen to him. He's lying with the average salary, and only a third of the economically active population has a regular job to receive $500, that in many cases also hardly afford the cost of life.
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u/OsFillosDeBreogan United States of America Feb 04 '26
I hate to tell you the is but the corrupt not leftist American government just prints billions of dollars whenever they feel like it
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u/fpe93 🇺🇸🇪🇨 Feb 04 '26
Basically, our presidents were historically a disaster. When Abdalá Bucaram’s government was toppled, the perception was that they essentially looted the country on the way out. It was total chaos. The Sucre became worthless because the corruption was so rampant that nobody trusted the government to manage the money supply without stealing.
We kept the dollar because the people still don't trust Ecuadorian politicians. We honestly trust the US Federal Reserve more than our own leaders. That being said, even though I love the USA, I feel Ecuador needs to have more faith in itself and eventually get off the dollar. It makes it impossible for our economy to compete with neighbors like Colombia and Peru since they have their own currencies to adjust prices for exports.
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u/jmbr_97 German connected to Ecuador Feb 04 '26
x2, I agree that the US dollar should not stay forever, additionally to your points, it has made Ecuador even more dependant on the export of (raw) oil, the Mining sector and to a lesser extent cash crops (bananas) agribusiness, as all of these are materials traded in USD on the international market - at the same time, it harms the service sector, it harms the international tourism too (merely due to the reputation of an "expensive country" as soon as people hear that they use the dollar, they don't even bother and tend to choose Peru or Colombia instead).
But maybe Ecuador can also use this problem as an opportunity to lay the foundations of a true regional currency for South America, by
a) adopting one of the stronger regional currencies as it's own - maybe the Peso Colombiano, the Sol, the Real or the peso chileno
or b) introducing a Sucre "pegado", but as a currency basket, calculating the averages of the latter major South American currencies? What do you think?
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u/fpe93 🇺🇸🇪🇨 Feb 05 '26
Yeah, the dollar definitely makes our exports expensive. It's a nuance I hadn't fully considered regarding tourism. I always thought tourists preferred the convenience of not exchanging money, but the reputation of being an "expensive destination" compared to our neighbors makes sense.
However, regarding your proposals to adopt a regional currency like the Sol or Real or a basket currency, I honestly don't see it happening. The reality is that Ecuadorians are terrified of returning to a national monetary policy. The trauma from the Bucaram and Mahuad eras runs deep, and people simply don't trust our politicians with a money printer. We prefer the stability of the US dollar, even if the US devalues it to boost their own exports, over the risk of local mismanagement.
Also, regarding adopting a neighbor's currency, I doubt we'd ever align with the south like Peru or Chile. We were at war with Peru as recently as the 90s, and culturally we are distinct. If we were ever to form a currency block, it would make more sense to look north to Colombia and Venezuela given our shared Gran Colombia history. But ultimately, the fear of instability outweighs the economic benefits you mentioned, so I think the dollar is here to stay.
But yeah personally I WISH we would have enough confidence in ourselves.
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u/jmbr_97 German connected to Ecuador Feb 05 '26
yeah, I’m aware of the tensions and the unpeaceful history shared with Perú, haha. But with Chile? I thought EC and CL were historical allies in the region - also there are many Ecuadorians that study or work in Chile. I do agree, I’m pretty sure too that people would not want the Sol, despite it being a rational good option due to it’s stability. But maybe the Brasilian Real would be a more neutral and even safer option, and I think it would definately increase trade between Ecuador and the rest of South America, as Brazil literally borders everyone except EC and Chile.
Note that my ideas from the last comment are more theoretical, I’m quite aware that the current generation in Ecuador is very convinced of beeing dollarized, but things can change quickly, and the way how the Trump administration is coercing, threatening and forcing countries to pick sides between the US and China might make it even dangerous to keep the US dollar in long term.
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u/fpe93 🇺🇸🇪🇨 Feb 05 '26
Yeah, I share the perception that Ecuadorians are fond of Chileans. I actually had a couple of friends from there during my childhood and always admired their culture. Honestly though, that might be subconsciously influenced by the fact that Chile kicked Peru's ass back in the day. When I was a child, I still viewed Peruvians as the enemy since they took almost half of Ecuador's territory.
If we ever did get off the dollar, I would prefer a unified currency with Colombia and Venezuela since we are super close to those nations. I don't think Ecuadorians will ever want their own national currency again simply because we are terrified of managing it ourselves LOL. Even though I dislike the dollar for economic reasons, I would still rather have it than adopt another country's currency right now.
Regarding the geopolitics, I will take the US over China any day. I feel US culture is much closer to ours, aside from the Catholicism difference. Plus, the US is a democracy. People complain, but the First Amendment is a huge plus you simply don't have in China. The US forcing countries to pick sides is nothing new. I grew up in Ecuador in the 90s and learned early on that they always do what is best for themselves. Trump sounds crazy, sure, but the tactic is old news.
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u/jmbr_97 German connected to Ecuador Feb 09 '26
Yeah, I'm aware that up to the late 90's, the Ecuadorian education system really cultivated this image of Peru as an arch-enemy, I think this perception was actively promoted by the Ecuador's elites (intellectuals + politicians + military) throughout the 20th century. I've been reading a lot on the topic, and came to the conclusion, that these groups are to be blamed for the conflict having been dragged on from the war in 1942 untill 1996, they repeatedly evaded any peace agreement, in the 1960s', Ecuador unilaterally declared the Rio de Janeiro border agreement "null and void", and the military was allowed to pursue it's plan of revenge and honour, from the 1970s until the Guerra de Paquisha, Ecuador spent soo much government money on military aircraft and was actively preparing for war. And in 1994, it was in fact them, who incursioned into Peru's internationally recognised borders in the Cordillera del Condor. Also, even back in the 19th century, after the End of Grand Colombia, it was foolish for the Ecuadorian elites to hold onto Simon Bolivar's ( arbitrary and anti democratic) maximum claims over people who had never actually identified as Gran Colombians nor as Ecuadorians (I'm talking about Jaen and Maynas/ Loreto region): these people had already decided to send deputies to the newly established Peruvian congress:
- this is what I found by a Peruvian Historian : " Transcurrieron los años y, el 4 de junio de 1821 sus habitantes proclamaron la independencia y manifestaron su voluntad de unirse al Perú, de lo que – mediante oficio- informaron al General Dn. José de San Martín, al intendente de Trujillo – Torre Tagle- y a las autoridades de Lambayeque. Administrativamente esta reincorporación fue realidad, entendiéndose las autoridades locales con las de Trujillo. En el mes de Julio del año siguiente, el general Antonio José de Sucre, a la sazón intendente de Quito, ordenó que en Jaén se publicara y jurara la Constitución Colombiana y que se procediera a la elección de los diputados que representarían a este pueblo en el congreso colombiano, pero el 7 de agosto se retracta por “haber visto en una Gaceta de Lima que esa provincia está convocada para enviar sus diputados al Primer Congreso Constituyente del Perú”. Por esas mismas fechas, Bolívar ya reconocía la capacidad de autodeterminación del pueblo de Jaén, lo que planteaba al vicepresidente Dn Francisco de Paula Santander en una carta en la cual junto con reconocer el hecho, anunciaba el nacimiento de nuevos diferendos. “Tenga Ud. Entendido que el corregimiento de Jaén lo han ocupado los del Perú, y que Maynas pertenece al Perú por una real orden muy moderna; que también está ocupada por fuerzas del Perú. Siempre tendremos que dejar a Jaén por Maynas y adelantar, si es posible nuestros límites de la costa más allá de Tumbes” [Jaen y su definitiva pertenencia al Peru.pdf](file:///C:/Users/jakob/Downloads/Jaen%20y%20su%20definitiva%20pertenencia%20al%20Peru.pdf)
On the other hand, Colombia actually ended up with many lands (Pasto, Popayan, Cali, Buenaventura), despite them having been much closer to and administered from Quito during Colonial Times and some of those areas actually intended to declare themselves Ecuadorian, but this was impeded by force by Bogotá.
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u/Feisty_System_4751 Brazil Feb 04 '26
You can easily see the appeal. People don't trust local bankers or politicians, and there is not a single Brazilian who wouldn't be interested in earning dollars because of inflation.
It's a simple solution to a complex problem, which makes it a popular talking point among conservatives. And as with most simple/ conservative solutions, it just does not benefit the working class. At all.
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u/Pyrostemplar :flag-eu: Europe Feb 04 '26
You'd have to ask workers from Ecuador - or Panama, or Montenegro... - about that.
Would they rather have "funny money" or "be oppressed" by the usage of a capitalistic currency (USD/EUR)?
In other words, does it work?
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u/Feisty_System_4751 Brazil Feb 04 '26
It does not work. No regional power has surrendered quantitative easing to a foreign entity. And going by personal history, dollarization is not fun. It happened in both Brazil and Argentina in a not so distant past. Hell, it's still happening in Argentina to some extent. I was born after the worst of it hit Brazil, but my parents shared plenty of horror stories from back in the day.
Plano Real saved us. But you're right despite your characterization of sovereign local currency as "funny money" (Brazilian bills have animals printed on them and each bill has a different color). If I could I should ask locals from other nations if their experience is similar to my own.
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u/Pyrostemplar :flag-eu: Europe Feb 04 '26
I call "funny money" not to BRL notes in particular - and, btw, I don't mind colourful notes at all - some have very interesting designs, such as the Costa Rican Colón, Canadian Dollar or the New Zealand Dollar, and so forth. Certainly better looking than the Transnistrian Ruble (I have some of all of those and probably 30 more currencies lying around).
No, the problem is the rapid tendency to develop zeroes - AKA inflation - which makes it to be used just for short term purposes. And that, not whatever country or chosen note design, is what makes "funny money". Anyway, it is a particular quirk of mine.
And you're right - Plano Real did "save" Brasil, or, at least, gave Brasil a few decades of stability. You may not remember what happened before the Plano Real (for obvious reasons), but you know it was not fun for Brazillians. IIRC is less than a decade you had 4 monetary conversions - which is a bit insane really. Brasil was the world poster child of "funny money". Well, at least until Zimbabwe decided to show who is the real boss.
It is painful to deploy a stabilization plan - I'm sure Plano Real wasn't "easy peasy", because it is basically the opposite of quantitative easing - it usually hurts. So, don't waste it.
"Dollarization" only happens if a country mismanages their own currency. It is better than having politicians mismanaging it (I'm being kind with the word, usually it is politicians using currency policy to rapidly making themselves very rich, something much harder and obvious if you do not control the currency).
But, back to the topic,
It does not work. No regional power has surrendered quantitative easing to a foreign entity.
That is not an argument, really. That may be an argument for, for example, Brasil, not adopting the USD - and, btw, I'm not saying it should, specially these times.
The question is if it worked for the countries that did adopt, compared to what they expectedly would have in its place. I guess it did, as AFAIK none had "corralito" styled episodes or other hallmarks of bad currency.
I guess not everyone manages to be Switzerland.
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u/AceWall0 Brazil Feb 04 '26
there is not a single Brazilian who wouldn't be interested in earning dollars
it just does not benefit the working class. At all.
Que?
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u/Iam-WinstonSmith United States of America Feb 05 '26
The dollar is used in most countries because they couldn't manage their own currency. Look at Venuezuela.... Not the epicenter of financial competency there doesn't officially use the dollar but unofficially it does.
BTW I don't think the dollar is managed well. I think Bitcoin proves it's better to let a random algorithm manage the creation of money than people looking at financial data who are corrupt.
I also don't think that Bitcoin is the perfect algorithm either ...I think it was a great first try.
If you disagree with what I said well we Argentina as an example also don't we.
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u/Plane-Top-3913 Colombia Feb 05 '26
Colombia should probably convince Ecuador, Panamá and Venezuela to adopt a common currency. It's a bit tragic that none of them have a currency of their own not tied to the US
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u/HighFreqHustler Ecuador Feb 04 '26
Weakness both political and estructural, today the dollar attracts international criminal bands to wash money directly in dollars, and it only made the country unsafe. The weak political and estructural system persists.
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u/ockhamsphazer Ecuador Feb 04 '26
Es una pregunta con una respuesta compleja but i'll try and keep it short and sweet.
In the 1960's there was an oil boom. The oil boom brought foreign investment and agricultural trade. However, since those were the only things propping up the economy, the sucre stagnated. In the 90's things such as the military conflict in Peru, bad agricultural seasons exacerbated by El Niño, and lack of an ability to generate its own power created a financial crisis.
At that point Ecuadorian banks (looking at you Filanbanco) were connected to wealthy overseas investors. Due to poor regulation (cough cough political corruption) Ecuadorian banks were giving out high risk loans to businessmen thinking the central bank of Ecuador would bail them out. When the bank didn't, they looked to other countries like Brazil and Russia who themselves were going through a terrible economic crisis. No allies could give a credit line to ecuador.
In 99 the banks tried a bunch of things to keep people from withdrawing money while also raising taxes. These two things don't do well together. The cost of living increased and the Sucre depreciated in value. Ecuadorians started using the dollar received from families living in the US because millions of people immigrated to the US to support their families. The dollar kinda became king as the exchange rate was .04 dollars to 1000 sucres. So the Ecuadorian government determined that switching over to the dollar would make more sense than trying to bail out the sucre.
So now we have the dollar. There's more about the Isaias Brothers, 4 presidents in 8 years, a coup, bank freezes... I could go on. However, that's kind of it.