Disgust and confusion in dollars and sucres
Ecuador's leaders hope to stabilize the economy and spur foreign investment through dollarization, but many citizens aren't buying it.
QUITO, ECUADOR — On a bustling street corner in the heart of colonial Quito, lottery- ticket vendor Petrona Sanchez is having problems making change. Dressed in the traditional blue shawl and beaded necklaces of the Quichua Indians, she pulls out a handful of coins from a pouch at her waist.
"They don't have numbers on them," she says, poking a gnarled finger at US nickels, dimes, and quarters. "How can you tell what they're worth? I can't understand this money at all."
But come Sept. 13, Mrs. Sanchez will have little choice. Hoping to encourage foreign investment and tame spiraling inflation as well, the Ecuadorean government has decided to switch the national currency, known as the sucre, to a dollar-based economy.
"For many of us, this is very hard to accept. We see dollarization as another way that the US is trying to dominate Latin America," says student Katherine Salazar, working at an Internet cafe in the leafy Barrio Mariscal Sucre. Like the doomed currency, the neighborhood is named after the national hero who liberated Quito from the Spanish.
President Gustavo Noboa insists that dollarization is the only way to bring stability to the country's chaotic economy: Last year, inflation topped 60 percent, and the sucre plunged from 7,000 to the dollar in January to nearly 30,000 by the end of the year.
Conversion to dollars has ended currency speculation by pegging the exchange rate at 25,000 sucres, but many Ecuadoreans fear that prices will be forced up. Critics say that while the government and importers may benefit by trading in dollars, the losers will be the 8.5 million Ecuadoreans trapped in poverty, most of whom are native Indians.
Earlier this month, thousands of Indians and students marched through the city, demanding a referendum that could lead to the dissolution of Congress and halt dollarization. And in January, larger indigenous protests, backed by sections of the military, forced President Noboa's predecessor, Jamil Mahuad, from office.
Mrs. Sanchez was there both times. "We hoped we could save the sucre," she says.
Between them, she and her husband earn around $18 a month selling lottery tickets. For the Sanchez family and many others, the dollar is proving to be well out of proportion with their spending needs.
Most of the old coins and notes have already been withdrawn from circulation, but the government has yet to issue a new set of Ecuadorean coins with the same value as the US ones.
Meanwhile, it seems that nobody in Quito has any change.
A passenger who tries to pay for an 18,000-sucre (72-cent) taxi-ride with a dollar bill may be forced to spend half an hour asking passersby if they can break the greenback into small change. Outside of tourist hotels and restaurants, it is nearly impossible to pay with anything over a $5 note.
In a toy store named The Virgin of Consolation Bazaar, it takes several minutes of hotly debated arithmetic for a small boy to buy a pair of Pokmon dolls. He hands over one crisp dollar bill and 40,000 sucres in coins and stained notes. Maria Suarez, the owner, gives him 10 cents and a 500-sucre piece in change. "It's not that complicated. I have a calculator," she says.
Like most shopkeepers, taxi drivers and street vendors, Mrs. Suarez still hasn't changed her price list to dollars. "But I think dollarization is for the better," she says. "Before, the sucre got weaker every day. The dollar is much more stable."
Outside the 16th-century church of San Francisco, Graciela Bonilla's market stall is crowded with votive candles, rosaries, and amulets.
Jammed between a plaster cast of the Virgin Mary and a statue of the Buddha is a bowl of magnets and odd bits of metal bristling with iron filings. Among the horse shoes and pig iron is a handful of old coins: 1-, 20-, and 50-sucre pieces withdrawn from circulation in the 1990s.
"Coins always lose their value in the end," says Mrs. Bonilla. "These ones are good against the evil eye, but they're not worth a cent."
(c) Copyright 2000. The Christian Science Publishing Society