Ecuador - Foreign policy



Because of the adoption of the U.S. dollar as its national currency, Ecuador became the poster child of many international institutions that see the adoption of the U.S. currency as the best remedy against fiscal instability, inflation, and currency devaluations in Third World countries. The success of Ecuador's economic experiment will be a benchmark for the advocates of standardizing world currencies. Yet, Ecuador's ability to succeed also depends on the government's ability to borrow money abroad to help finance social programs and to offset the increases in the domestic costs of living that have already made Ecuadoran exports less competitive in world markets.

President Gutiérrez surprised many observers when he toured the United States shortly after his election. He met with Ecuadoran citizens living in the United States. In addition, he met with U.S. government officials and Wall Street financial institutions. He reassured them of his commitment to adhere to the neoliberal economic policies championed by the previous administration, and vowed not to abandon the U.S. dollar as the national currency. Despite these assurances, his request for financial support and new lines of credit were not enthusiastically received. Reductions in government spending—rather than more foreign debt— were recommended to Gutiérrez as better policies. Gutiérrez will need to demonstrate his unequivocal support for free market policies and a strong commitment to fiscal discipline if he wants to enlist the support of international lending institutions and the U.S. government.

Ecuador's commitment to the war against drugs in the Andes region has not been questioned in recent years. Yet, Gutiérrez's admiration of Venezuelan president Hugo Chávez, a man after whom Gutiérrez designed his own political career, might generate some conflicts with the U.S. government. The more distance Gutiérrez keeps from his fellow military colonel, democratically elected in Venezuela, the better Gutiérrez's relations with the U.S. government will be. Because other Latin American countries fear that the populist tactics of President Chávez extend beyond that country's borders, President Gutiérrez will improve his international position if he demonstrates a strong support for democratic values and principles and strict adherence to the existing Ecuadoran Constitution. Because many observers expect him to turn into a populist leader, Gutiérrez will need to be very careful to convey the impression that he holds the Ecuadoran Constitutions and laws in very high regard.

Ecuador is a member of the United Nations (UN), the Organization of American States (OAS), and a number of regional groups, including the Rio Group, the Latin American Economic System, the Latin American Energy Organization, the Latin American Integration Association, and the Andean Pact.

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