Ecuador has traditionally been a fragile democracy.

However, the events over the last twenty years have greatly exacerbated existing problems. The economic situation in

Ecuador deteriorated sharply throughout the 1990s, causing skyrocketing poverty rates and giving rise to a host of social challenges that continue to this day. During these years,

Ecuador experienced a number of economic, political and natural crises, which led to rapidly climbing inflation rates, record levels of unemployment, and eventually a mass exodus from the country. As a result, one million Ecuadorians, a record number in

Ecuador’s history left the country between the years of 1999-2000 alone. In the aftermath of these crises, the social indicators in Ecuador deteriorated sharply, with increases in insecurity and conflict as well as inadequate access to services.

Unfortunately, little has changed in the past year or two.

Economic crisis forces Ecuador to abandon its own currency

The small South American nation of Ecuador will abandon its own currency, the sucre, and dollarize its economy The dollarization of the Ecuadorian economy means that the sucre will no longer be accepted as a means of payment except for coinage. All bills will be withdrawn from circulation and only US dollars will be permitted as currency. The US Treasury, not the Ecuadorian government, would then have effective control of the money supply, interest rates and other economic policies. Ecuador would become the second Latin American country to suffer such a total collapse of economic sovereignty, joining Panama as a colony in all but name.