Economy
--Alyssa Holmgren
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Economically, Ecuador is one of the most unstable countries in South America. Its current inflation rate is approximately 50 percent, the highest it has been since the 1960s, and commodities such as food and clothing are becoming more and more difficult for its citizens to afford. The new president, Jamil Mahuad, is attempting to pay off the country's foreign debt - a task that should not be difficult since Ecuador's land is rich with resources such as oil, bananas, coffee, and cocoa. Unfortunately, the instability that faces the country is hindering its further development, and Ecuador remains one of the least-advanced countries in Latin America.
This year has been particular harmful to the economy. El Ni�o has caused more than $2.6 billion in damages, and the low price of oil throughout the world has limited petroleum revenues, resulting in the current rise in inflation and civilian unrest.
The popular opinion varies concerning Mahuad's approach to the growing debt and inflation rate. His approval rating sits at a mere 16 percent, but supporters still feel that the steps he is taking are necessary to bring Ecuador out of its recession. Unions and moderate to left-winged analysts feel that actions such as the recent 200 percent hike in the price of gasoline are too harmful to the financially destitute population. The banks were closed for several weeks, and although they have recently been reopened, patrons are only allowed to remove small amount of money at a time to avoid bank runs and the collapse of the banks, many of which have been shut down. Mahuad declared the country in a state of emergency and has sent troops to protect the banks and patrol the streets. He also lowered the gasoline price so that the increase is now at 30 percent.
OUR EXPERIENCES
When we first arrived at the airport in Quito, the exchange rate was 11,400 sucres per dollar. The currency had just been devalued and the people, within three days, had forced the government to shut down all of the banks, which have not yet fully reopened. With many of the workers on strike, we had a difficult time exchanging money after our initial stock had been depleted, but a few hotels offered reasonable rates, and the vendors on the street were occasionally willing to bargain. Luckily, for four days of the strike we were in the rainforest and thus unaffected by the situation. However, when we returned to the market at Otavalo, we had to rely on the cash that had been exchanged upon our arrival in Quito six days earlier. On the way to Otavalo we drove through several union road blockades, and we had to bypass shallow ditches that had been dug out of the roads. All in all, we were not very affected by the strike, but it still gave us an appreciation for the stability that we take for granted in the U.S.