Ecuador President Defends Plan to Use Dollar

Ecuadoran President Jamil Mahuad defended his plan to replace the country’s currency with the U.S. dollar, as large Indian and labor groups renewed demands for his resignation. The president said his currency plan is the only solution to end Ecuador’s economic chaos. Mahuad received good news when his strongest opposition in Congress, the pro-business Social Christian party, backed the plan. But party leaders criticized the planned exchange rate of 25,000 sucres to the dollar, saying it would impoverish thousands of people with savings in sucres. The value of the sucre recently plunged 20% in less than a week to 29,000 to the dollar. A year ago, 7,000 sucres equaled $1. Mahuad, a Harvard-educated political centrist who took office in August 1998, has faced growing calls to resign after failing to stop the rapid decline of Ecuador’s economy. Last year, the economy shrank 7% and inflation topped 60%, the highest in Latin America.