Ecuador's indigenous Indians have warned president Gustavo Noboa that they will step up nationwide action in protest at the government's replacement of the 116-year-old sucre by the US dollar earlier this month.
Antonio Vargas, leader of the Indians' confederation, which represents a quarter of Ecuador's 3 million population, said dollarisation would turn Ecuador into a US colony. Academics say that Ecuador's inflation rate for this year will top 85 per cent and that the 65 to 79 per cent rise in poverty over the past 12 months will increase.
Alberto Acosta, an economic analyst at Quito's Latin American Social Research Institute, warned that Ecuador's rigid monetary policy would create problems in the event of external price shocks. He said: "The straitjacket of dollarisation will lead to even more famine, misery and unemployment. It will also lead to the closure of many companies because it boosts imports but does not encourage exports."
Quito sociologist Carlos Tutiven said Ecuadorians viewed the sucre's disappearance as the loss of a national symbol. "The change from sucres to dollars is more than an exchange of banknotes: it marks a change in the collective imagination. Currency is a symbol of belonging to a community. For some it is even a symbol of identity."
Mr Vargas, who was outvoted on the three-man junta that installed Mr Noboa, said the choice of president had been dictated by pressures from Washington and rightwing politicians in Ecuador.
He added: "This dictatorial government has shown no consideration for the people of Ecuador. Our fight will be a gradual and determined one. We fear nothing and exclude no line of action."
Mr Noboa, a former rector of the Catholic University of Santiago de Guayaquil, insisted that there could be no turning back on dollarisation.
Mr Noboa, who was in New York on D-Day to receive President Clinton's congratulations, said that the benefits over the past eight months of transition had been convincing: "We have seen growth, lower inflation and an increase in bank deposits."