Cañar: A Year in the Highlands of Ecuador

Chapter Twelve: The New Economy

chapter twelve o The New Economy on the square, cañar Our neighbor across the street, a sweet old woman we call Doña Teresa in public and Mother Theresa in private, has been a storekeeper for something like thirty years. She minds her meager stock of candy, soft drinks, matches, rice, flour, and fresh-killed chickens in a tiny space at the front of her house, with a low wooden gate across the doorway to keep out kids and dogs. Customers too, as the store is so small I can stand outside the gate and request a liter of milk. 101 Cañar ‘‘How much?’’ I ask. ‘‘Let me see,’’ Teresa mutters slowly to herself, ‘‘that’s 8,500 in sucres, which in dollars is . . .’’ she stands transfixed as the old calculator in her head clicks away. ‘‘Thirty-four centavos!’’ she concludes triumphantly. I give her an American dollar bill and she makes change out of a small box filled with a mixture of United States and Ecuadorian coins. It takes her a long time, as she studies each coin and mutters its value to herself. On the wall next to her hangs a government-issued chart with photographs of each unit of U.S. currency and its equivalent value in sucres, which was Ecuador’s monetary unit until September 2000. The photos are also supposed to help identify counterfeit twenty-dollar bills, which flooded areas like Cañar immediately on the heels of the new currency laws and are easy to pass off to someone like Doña Teresa. To understand what has happened in the last couple of years to this small country of twelve and a half million people, imagine something like the Great Depression. Ecuador’s economy had been stagnant for years, but it had a stolid constancy that its people had come to depend on, even with its high rates of poverty and unemployment.When Michael and I lived here in 1991–1993, the base monthly salary was equivalent to forty dollars a month, and a person could actually survive on that, though barely. Then, the sucre was relatively stable at 1250 to the dollar. Subsistence farming, combined with bartering and labor exchange, was a traditional way of life that the indigenous people had survived on for centuries. Eight years ago, our Cañari acquaintances were able to grow enough produce to feed their families and sell the excess at the weekly market to generate a bit of cash. Today, it is no longer possible to support a family from the land, and tens of thousands of young people in the southern region of Cuenca and Cañar have fled the country as illegal immigrants, seeking work in Spain, Italy, and Israel, but mostly in the eastern United States. (Queens, New York, is a favorite destination where, we are told, on a Sunday afternoon you can watch an Ecuadorian soccer game while eating roasted cuy and mote bought from Ecuadorian sidewalk vendors.) The sucre began its precipitous descent in the late 1990s, and by early 1999, when the exchange rate fell to 25,000 sucres to the dollar, the country was on the edge of economic collapse. The government, the fourth in four years and thoroughly corrupt, defaulted on its foreign debt, and none of the emergency measures of the World Bank or International Monetary Fund (IMF) were able to help the country avoid the crash. On March 19, 1999, a ‘‘bank holiday’’ was declared and all forty national banks closed their doors. When the dust settled several days later, only twenty-six reopened, 102 The New Economy and the others were declared quebrado—bankrupt. Millions and millions of dollars—or sucres—simply disappeared overnight, and all those Ecuadorians who earned enough to have bank accounts, in sucres or dollars, woke up to find their money gone. Simply evaporated! Those banks that did reopen froze all accounts for one year. Twoyears later the fallout is a continuing drama in the daily papers. Most depositors still have not recovered their savings from those banks that survived the crash, although occasionally one or another bank will announce with great fanfare that it is ‘‘giving back’’ a token amount—equal to about four hundred dollars around Christmastime, for example. As investigations and revelations continue, many a banker has fled the country to take up luxurious exile, Latin American style, in Europe or the United...