Economists Back Dollarization as Cure for Venezuela’s Woes

[Bacchus4.0]

http://panampost.com/sabrina-martin/2015/04/20/economists-back-dollarization-as-cure-for-venezuelas-woes/



The principal opponents of dollarization are governments: they don’t like it, because they lose power,” Miguel Dávila, former head of Ecuador’s Central Bank (BCE), told the PanAm Post.+

He explained that the state “has the ability to print money and own the printing machines when the currency isn’t the dollar,” and as such it’s “obvious” that they reject any moves towards adopting the dollar as their national currency.+

Yet in the face of the wide-ranging economic crisis gripping Venezuela, dollarization proponents increasingly point to the experience of Ecuador, where the dollar as been the official currency since 2000.+

The switch came after an economic crisis in the Andean country which saw inflation reach 60 percent, and currency devaluation of some 300 percent. Ecuador first established an “informal dollarization” in the country: people could change sucres for the greenback in order to keep their savings, and the majority of prices for goods were calculated in dollars.+