Ecuador President Mahuad Announces Dollarization 'Jump Into the Abyss' Amid Economic Crisis

Ecuadorian President Jamil Mahuad announces the country will abandon its national currency and adopt the U.S. dollar, describing the decision as ‘a jump into the abyss’ just days before making it. Mahuad’s handling of multiple crises—floods from El Niño, the collapse of oil prices, and the bankruptcy of most private banks—has driven Ecuador into one of its worst national recessions. The dollarization decision triggers immediate resistance from the Confederation of Indigenous Nationalities of Ecuador (CONAIE), the country’s largest indigenous rights organization and Latin America’s most influential Indigenous movement. On January 21, 2000, CONAIE coordinates with organizations like CONFEUNASSC-CNC to block roads and cut agricultural supplies to major cities while rural indigenous protesters march on Quito. The massive uprising proves successful: President Mahuad loses his job within two weeks of announcing dollarization. His successor, former vice-president Gustavo Noboa, continues with dollarization, reflecting widespread conviction that all alternatives have been exhausted after years of IMF pressure. CONAIE, formed in 1986 and firmly established as a national force in 1990, has been on the front line of resistance to the ‘Washington Consensus’ throughout the 1990s and early 2000s, organizing at least five national indigenous uprisings that mobilize thousands of campesinos to shut down Quito. These uprisings consistently demand land rights and plurinationalism while protesting corruption, deregulation, privatization, and dollarization imposed by the IMF, World Bank, and U.S. Treasury. The dollarization crisis demonstrates how IMF structural adjustment programs systematically eliminate national economic sovereignty, forcing countries into permanent dependency on U.S. monetary policy while enriching international creditors at the expense of local populations.