Córdoba: Former President Jamil Mahuad explained how dollarization took place in Ecuador

Former Ecuadorian President Jamil Mahuad was in Córdoba speaking about dollarization on the occasion of the 48th anniversary of Fundación Mediterránea.

He was introduced by former Minister of Economy, honorary president of Mediterránea, and one of the founders of Ieral, Domingo Felipe Cavallo.

The luncheon, held at the Holiday Inn hotel, began with the opening speech by the president of the Foundation, María Pía Astori.

Mahuad had a brief period as Ecuador's head of state (August 10, 1998 to January 21, 2000) since he was overthrown by a coup d'état. Nevertheless, he was the architect of dollarization that led his country out of a deep crisis.

The Harvard professor also recalled the help he received from Cavallo and his team before making the decision.

He also explained that for a government to take such a measure, there must be three solid "legs": "that it is technically possible; that people accept it, and that politics achieves agreements."

Mahuad also recounted that a prominent IMF figure such as Stanley Fischer told him: "At the time, we opposed dollarization, but I recognize that it was the right treatment, in the right place, and at the right time."

He also recalled that the measure to dollarize Ecuador's economy, taken in January 2000 in the face of a huge crisis and high inflation, "was very unpopular."

Nevertheless, it began to yield results immediately. "The next day, interest rates dropped very sharply," he said.

The country entered a path of stability and growth.

"Today I have recognition. What happened confirms to me that in politics, it's not enough to be right. You have to be right at the right time and for others to recognize it," he stated.

Jamil Mahuad's speech in Córdoba

The former president of Ecuador spoke about the changes being experienced in the world due to technological advances, among other factors, and the rise of China.

"We are living through a change of era, not just a passing crisis. It's not about waiting for everything to return to normal, because what is dying is an entire structure, with no possibility of return," he said.

"New scenarios are emerging that challenge concepts such as the antinomy between dictatorship and democracy, giving rise to hybrid systems that work and force us to rethink power and social organization," he added.

Among other data, he stated that in the coming years, 7 of the 10 largest economies in the world will be Western.

"140 out of 190 countries are part of China's New Silk Road," he exemplified.