FORGET BRAZIL. ECUADOR IS THE REGION'S TRUE economic basket case basket case Train wreck Vox populi A derogatory term for a Pt with a dread disease or a terminal illness; a person to be pitied . Over the last year, the country has staggered from the weight of US$2.8 billion in El Nino damages and the depressed price Depressed price
In the context of stocks, stock whose market price is low in comparison to stocks in its sector. of its leading commodity--oil. Now, its currency, the sucre, is collapsing. The government recently decided to float the currency, causing it to fall dramatically. Projections are it could lose 60% of its value against the dollar by year's end. Factor in an inflation rate that the government estimates could hit 50% for the year, double the rate of earlier estimates, and you've got the ingredients for an economic meltdown.
But the bad news doesn't end there. Street protests have grown so frequent and so violent that President Jamil Mahuad Jorge Jamil Mahuad Witt (born July 29, 1949) was President of Ecuador from August 10, 1998 to January 21, 2000. He was forced to resign after a week of demonstrations by indigenous Ecuadorians and a military revolt led by Lucio Gutiérrez. He is of Lebanese and German descent. was forced to declare a 60-day state of emergency in mid-March to cool things down. Meanwhile, his Cabinet is coming apart. In March, Mahuad gave his Minister of Energy and Mines, Patricio Ribadeneira, the boot, blaming him for gasoline shortages throughout the country. Replacing Ribadeneira was Rene Ortiz, a former secretary-general of the Organization of Petroleum Exporting Countries Organization of Petroleum Exporting Countries (OPEC), multinational organization (est. 1960, formally constituted 1961) that coordinates petroleum policies and economic aid among oil-producing nations. , better known as OPEC OPEC: see Organization of Petroleum Exporting Countries.
in full Organization of the Petroleum Exporting Countries
Multinational organization established in 1960 to coordinate the petroleum production and export policies of its . That change follows Finance Minister Fidel Jaramillo's resignation in February. Jaramillo resigned in protest when the Congress rejected new tax measures for the 1999 budget. He was replaced by Ana Lucia Armijos, who had been Mahuad's prime minister since August.
Amid the gloom and doom is at least one ray of hope in the name of the International Monetary Fund, says John Wade, a senior regional analyst with Control Risks Group, an international consulting firm. "There is some optimism if Ecuador can overcome its economic and political obstacles, and secure an agreement with the IMF IMF
See: International Monetary Fund
See International Monetary Fund (IMF). ," he says. The government is negotiating a combined deal with the International Monetary Fund, the World Bank and the Inter-American Development Bank Inter-American Development Bank (IDB)
international organization founded in 1959 by 20 governments in North and South America to finance economic and social development in the Western Hemisphere. , that could provide the country with as much as $700 million.
"For now, the combination of political and labor opposition is making it very difficult for President Mahuad to carry out his economic program," says Wade.