8.12.08

A History of Ecuador, Part I

So, I've decided that I'm going to start posting interesting things about the history of Ecuador as people tell me them, with minimal fact checking because that means work, and I'm up to my ears in Florida Virtual Schools as is. Besides, this is about how people interpret history, not how "facts" or "books" "say" that "history" "is." Without further ado,

The History of Ecuador, Part I
As told by Anita Yepez.

Back in the distant past of the 1990s, Ecuador used a form of currency called Sucres. Sucres were doing okay for a while, but then the economy imploded and the value of Sucres went up to around 2,500 Sucres to one dollar. As you can imagine, this was pretty bad, even with the lower cost of goods and services relative to the United States. So, the president of 1999 decided that things weren't going to get better, so he instituted a radical change to make the Dollar the official currency of Ecuador, doing away with Sucres. Now, I didn't ask, but it must have been really crazy for a while, with people having to exchange Sucres for dollars and some people accepting Sucres while others didn't, and no one really understanding what was going on. I imagine something similar must have happened in Europe with the switch to Euros, but in Europe, 40% of the economy isn't made up by informal trading (Meaning a man on the street selling corn, or a woman at a booth selling chickens). But, the switch was made, and there was no going back.

However, the change included some inherent problems. For example, Anita's mother, who was and still is retired, was earning a pension of about 250,000 Sucres a month. When everything switched over, that pension went down to 100 dollars a month. There are a few places where you can live comfortably off of 100 dollars a month, I suppose, but Ecuador isn't one of them, not if you've got a house and bills. Now, you might be saying, "But it was the same amount of money before, why didn't it work?" And I'm asking myself that too. But what I think is that people had a sort of natural control on inflation, after a certain point, and kept prices down to a not un-reasonable level. That is to say, when the switch was made to dollars, lower prices were upped a bit because there was a new cushion for what was acceptable. Keep in mind that I'm not an economist, and I have no idea if what I'm saying is even remotely right. But whatever. Anyways, things like that, that were on a fixed level, were insufficient, and for a few months, my host grandmother lived off of 100 dollars a month. Eventually, things got straightened out and things were okay. And it was a very good thing that Ecuador switched to dollars, according to Anita, because inflation was incredibly rampant, and it was just going to get worse from there.

And a little bit of money-related bonus not-quite-history information: The Sports Minister of Ecuador just absconded with several million dollars' worth of government funds. How does the Sports Minister get access unguarded to that kind of money? Also, you may be wondering how exactly an informal economy works. Well, basically, much of if not most of the business transactions here take place in some form that is not taxed by the government, for one reason or another, whether it be a guy on the street with clothespins and batteries or a fruit vendor in Otavalo's giant farmer's market. So, the government raises the sales tax to 12% to cover the difference. Can you imagine buying a car with 12% sales tax? It's insane. You get small benefits in buying a pound and a half of strawberries for fifty cents, but trying to buy a house? It's murder. Things work differently here.

So, I finished my novel, and I'm buried under work from my online classes. So, I'm not really sure how often I'm going to be posting. I haven't written in my diary, and I'm not sure when I'm going to start that up again. In January, I should be in a better situation. Oh, and I'm entering a novel-writing contest in February, sponsored by Penguin Books in which the winner gets a $25,000 publishing contract against royalties, so if you read my novel and have feedback for me, please send it to me. I'd love to hear it. Ciao.

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