IO Podcast | Episode 63
In a country with political instability and recurring crises, dollarization has become an economic cornerstone in Ecuador. After 25 years of using the US dollar as legal tender, even interventionist political factions no longer advocate abandoning the system.
Gabriela Calderón, an Ecuadorian classical-liberal advocate, publisher at ElCato.org, and columnist for El Universo, explains that opposing dollarization has become political suicide. For now, she argues, the US dollar remains the most reliable currency, given its relevance in the global economy. However, she notes that Ecuador still has a central bank and a manipulated, protectionist banking system.
Calderón emphasizes that Ecuador has no point of comparison for a non-dollarization scenario. Any new currency would have likely fallen under the control of the same irresponsible political class that once printed money to fund hollow promises: “Dollarization limits populism, and Ecuador will continue to have populist governments.”
Calderón also points to Panama and El Salvador as regional examples where dollarization has contributed to economic stability. It has supported a thriving international banking sector in Panama and restrained inflation in El Salvador.
Recommended Links
- Follow Gabriela Calderón on X.
- “Joselo Andrade: Ecuadorian Voters Dodged a Bullet,” Impunity Observer.
- “Una propuesta mejorable,” El Universo.
- “Javier Milei’s Ingenious Path to Currency Competition,” Impunity Observer.
