| Dollarization - another social earthquake In the midst of the worst natural disaster ever to hit their country, Salvadorans must also cope with the social earthquake caused by dollarization. Dollarization means U.S. currency is now legally accepted for all business and governmental transactions in the country. It will also greatly impede the government's ability to determine its own monetary policy. Since its implementation on January 1, 2001, dollarization has caused massive confusion and anger. Some places now only accept dollars while some only accept colones; some people have access to dollars while others do not. There are numerous reports of price gouging in the exchange rate; the high level of illiteracy makes this much easier. The process of dollarization in El Salvador is heavily criticized and contested by the FMLN and social movement. A simple majority in the Legislative Assembly (47 out of 84) passed the law to implement the currency change, even though a constitutional change such as this requires a two-thirds vote in the currently seated and subsequently seated (May 2003) Assemblies. ARENA forced the legislation through and began dollarization in less than two months. FESPAD, a legal NGO, the FMLN, and the United Democratic Center (CDU) have all filed court challenges to dollarization. |