Ecuador: Bombshell announcements! To halt inflation and the printing of sucres by the government, an announcement was just made that the country of Ecuador is going to phase out it's local currency and go to the USA dollar.
Mahuad a Harvard educated political centralist said Sunday night that replacing the currency of Ecuador with the US dollar as official currency was the ONLY WAY TO SAVE THE COUNTRY AND THE ECONOMY. Despite rising prices of oil on the world market, one of Ecuador's major foreign exchange exports.
Mahaud said that he would ask Congress to fire any Central Bank executives who tried to block the measure in a Special Session. The step means the Central Bank of Ecuador will lose control of much of Ecuador's monetary policy. Last week, the Sucre worsened to 29,000 to the U.S. dollar and a shopper needed a wheeled cart and boxes to carry the money in Sucres necessary to purchase ordinary shopping items.
Mahaud said the government will start exchanging 25,000 sucres for one USA dollar. There has been no contact with the USA Treasury on this move. The USA cannot really do anything to stop Ecuador from switching to USA currency. This means the government of Ecuador can no longer print any more money to meet it's budget, thus eliminating the rapid speculation driving the SUCRE to hyperinflation. The IMF is even going to help the move. The changeover will be done through this coming year.
The government Finance Minister Alfredo Arizaga said that they had $400 million sucres in circulation and about $900 million in foreign cash reserves, so there would be no problem in replacing the local currency with the USA dollar.
The idea is to stabilize the Andean nation's economy and prevent hyperinflation, government officials said on Monday. The use of the USA dollar on the government and the economy would reduce annual inflation from 60% to 10% when completed for this year. Inflation does more damage to a country than a war, or a hurricane!
Existing Belizean political parties do not have any contingency plans to deal with a growing foreign national debt and the looming spectre of inflation when the PUP go out of power in 3 1/2 years. They are a bit like the Australian Ostrich, said one local port town wag. They have their heads buried in the sand!
In Brazil, the innovation of FREE INTERNET SERVICE copycating USA systems and corporations is taking hold. A new internet company with an initial bankroll of $120 million plans to start a service called I.G. com. The site will make money from banners and advertising. It will offer free e-mail, free unlimited internet service, a search engine, host home web pages, offer chat rooms, and more services to subscribers. The offer was made in Sao Paulo on Monday. There are some existing partially free services to customers from some banks like Bradesco SA and Uniao Brasileira de Bancos SA. The idea is, once there is a wide base of subscribers, the corporation will make an IPO offering on the USA Exchanges. There are 280 independent ISP providers in Brazil. This move will see consolidation and a shakeout.
In Belize in the meantime, the internet economy is stagnant, particularly in internet services and new business due to the Belize Telecommunications Monopoly and apathetic government regulation of BTL. There was supposed to be a low priced unlimited internet (ISP) in the Corozal Free Trade Zone, but the Belize Electronic Resource and Development Library section for the Corozal Free Trade Zone, sees that the LINK ( URL ) has been disconnected on the library for information on the ISP company. Queries to the Editor of the major newspaper, Harry Lawrence for information, the Belize Culture Listserve membership and the Belize Business Bureau have met with conspicuous silence on the subject. The proposed ISP is suspected to have bombed due to political interference, but no information on the facts are available.
Linux the operating system used by the Community Colleges throughout Belize and the University College of Belize has received a boost in the USA. IBM the computer giant in mainframes announced Monday, that Linnux will now be able to run on their systems. All four of their product lines will now be Linnux compatible. Linux is a UNIX based operating system and supposed to be a little more technical than Microsoft Windows and less user friendly, but infinitely superior in capabilities. It has a growing popularity in the USA and once it becomes Microsoft Windows desktop PC friendly, for software applications in newer commercial versions, the operating system is expected to grow in sales.
At the last word in Belize, the Belize Central Bank has failed over the last three years to provide the rubber stamp party legislature with any appropriate legislation for the implementation of locally owned small town and village BANKS. Within the meaning and capacity of local cash reserves and appropriate business size for communities.
Nor has the PUP political party shown the subject any attention. The PUP and UDP party policy is to favor foreign exploitation of banking in Belize as a captive market and to favor government control and exploitation of loans and lending also through various statutory bodies and loan creation schemes, as job sources for political patronage and to make money from interest, for government party schemes in Belmopan. There has been no innovation, imagination, or leadership politically by politicians of both parties on the subject of native banking. Indeed, the mention of self sufficient Beizean financing makes the Belmopan Wallahs eyes glaze over in fright, or incomprehension. Provincialism is rampant in Belmopan!