Washington and the International Monetary Fund welcomed the Salvadoran regime's currency plan. But they stressed that adopting the dollar by itself would not be enough, making clear that austerity measures must also be adopted to meet the approval of imperialist bankers and businessmen.

If approved, El Salvador would be the third Latin American country to formally adopt the dollar . Earlier this year, the government of Ecuador scrapped the national currency, the sucre, and replaced it with the U.S. dollar. The move sparked numerous protests by Ecuadoran unions and Indian organizations opposing its ruinous effects on the big majority of the population. Panama has used the dollar as official tender since U.S. imperialism imposed its domination on that nation in the early 1900s.

In addition, Argentina has pegged the value of its peso to the dollar, one for one, and the U.S. currency is freely used for most transactions there. There is also debate in big-business circles about Mexico adopting the dollar as official currency.

The U.S. government insists it will not change its monetary or exchange rate policies for the benefit of economies that have adopted the dollar, nor would the Federal Reserve stand behind their banking systems.

The Salvadoran government's plan is for the dollar to enter circulation on Jan. 1, 2001. The colon would also remain legal tender, at a fixed exchange rate of 8.75 colons to the dollar.  
 
 
Front page (for this issue) | Home | Text-version home