REDISTRIBUTION, GROWTH, STRUCTURAL CHANGE AND DOLLARIZATION: UNDERSTANDING ECUADORIAN PERSPECTIVES

Section 1 is dedicated to the analysis of key trends in the Ecuadorian economy over the last three decades. Although there are no signs of structural change, people's conditions have improved significantly, especially in the last ten years. This has been possible, as explained in section 2, due to the growing role of the state as the main driver of growth and redistribution. This "miracle", however, cannot be sustained over time and the profound crisis of the last two years demonstrates this. Section 3 is intended to demonstrate that the symptoms of the 'Dutch disease' are clearly present in the Ecuadorian economy and are blocking its development in the context of an unchanged production model. Removing those obstacles is difficult and dollarisation is becoming a key obstacle. Section 4 therefore concludes with an analysis of dollarisation, the monetary regime introduced at the beginning of 2000, which certainly helped to save the economy and its financial system from the great crisis of 1998-1999. If dollarisation was a good remedy for that kind of disease, the financial disaster, things are now different and it is turning into a negative factor: it is preventing the Ecuadorian authorities not only from implementing monetary policies, but also fiscal and structural change policies. The protection of savings already accumulated cannot in fact be pursued by slowing down or even blocking the formation of new savings.