In the case of the countries of Latin America, in particular, it is necessary to view dollarization as part of the trends towards integration which have speeded up since the creation of the Free Trade Area of the Americas at the First Summit of the Americas in 1994.
Washington wishes to use the FTA to bring to fruition its old dream of economic and even monetary expansion, which it has been hatching since the end of the Nineteenth Century. Let us recall that on the 24th May 1888, the United States government invited the countries of Latin America and what was then the Kingdom of Hawaii to an international conference in Washington to study, inter alia, ‘the adoption by each of the governments of a shared silver currency, which would be used obligatorily in reciprocal commercial transactions between the citizens of all the States of America’.
[…]3. Dollarization as a lever for consolidating the Washington Consensus (WC)
Those wishing to promote dollarization describe it as a step towards a new economic model. It is presented as a general shift in economic policy. Without failing to recognise that it is more than a simple change in monetary approach, it is impossible to accept that dollarization is the beginning of a new economic model. There is a desire to attain a superior stage in the current model, inspired by the WC, by giving up the national currency. Dollarization does not represent a change in direction, at the most it opens the final chapter in the long, tortuous march to Neo-liberalism (in the case of Ecuador) or is designed as a means of underpinning institutionalisation of the socio-economic changes introduced following painful domestic conflict (the case of El Salvador and Guatemala). What is interesting, furthermore, is that it has appeared precisely when that model was showing clear signs of exhaustion.
In the above countries, those wishing to introduce dollarization openly have resorted to manipulation and even “economic terrorism”. Also, at the same time that legal changes are being introduced to impose dollarization and bring about the other changes, which are needed for it, all out efforts are underway to break social resistance, either by authoritarian or even repressive means, or using clientele social policies.”
Comment & Debate