> ecuador actually got itself into a very serious currency bind precovid, and it seems to be staying that way.
Ecuador had protests over removal of fuel subsidies to satisfy IMF debt conditions in Oct 2019. Hard to see how that's a "currency bind" in any sense.
> This is the first time ecuador gets in trouble post USD adoption.
Uh...what? You're just making stuff up.
Ecuador defaulted on two bond issues in 2008.
Ecuador had to borrow billions from China in 2015 when petroleum prices collapsed. This affected the country for two or three years. Public sector workers had to wait months for their salaries at times. In an alternate reality where Ecuador uses its own currency, the government would have printed its way through that problem and the resulting devaluation would have hurt everyone with savings or wages.
A currency bind as in, they have no reserves to pay for their expenses / debt. This specific sort of problem no country that can print their own currency has but that doesnt mean that such recourse does not cause problem on its own. But thats not my point.
I dont argue for printed currency. We are actually in agreement there. I'm responding to parent halukakin who said
"Strong currencies are not the solution to poor governance. Good governance and democracy makes a country and its currency strong. Not vice versa. "
I contend that ecuador could prove that statement wrong. The 2008 crisis caught everyone off guard. Once Ecuador comes out of this crisis, we will really see if this experience will be enough to institute good governance reforms which were elusive during the constant ups downs of local currency inflation.
Ecuador had protests over removal of fuel subsidies to satisfy IMF debt conditions in Oct 2019. Hard to see how that's a "currency bind" in any sense.
> This is the first time ecuador gets in trouble post USD adoption.
Uh...what? You're just making stuff up.
Ecuador defaulted on two bond issues in 2008.
Ecuador had to borrow billions from China in 2015 when petroleum prices collapsed. This affected the country for two or three years. Public sector workers had to wait months for their salaries at times. In an alternate reality where Ecuador uses its own currency, the government would have printed its way through that problem and the resulting devaluation would have hurt everyone with savings or wages.