Ecuador switched to the US dollar in 2000 , would it be better for them to change back someday soon, or would it be better to keep the USD and sell there exports to the markets in USD .

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I doubt if they could change back, even if they wanted to. To understand why, you have to examine how they arrived at that point. This is probably the best account that's out there, although it's an awful lot of reading:

www.imf.org/external/pubs/ft/wp/2004...

In short, Ecuador had a series of crises from various causes that led to the ultimate collapse of the Sucre. I doubt anyone really wants to revisit that period of their history, given that it's still fresh in people's minds.

Using the dollar has some advantages, the most obvious of which is no exchange risk with your major trading partner (USA). There's also no way to inflate (independent of the Fed, that is) your way out of a financial crisis, so it imposes discipline on the banking system, which also makes it easier to obtain external financing, and to focus more on trade and fiscal issues (as we're seeing now).

Personally, I think the biggest challenge the govt. faces is the rising expectations of their own people. Try and explain to someone with inadequate health, water and sanitation, and no prospect of steady employment, that they just have to be patient while we sort things out. Having seen the power of the ballot (and of civil disobedience) it's going to be hard to manage expectations over the next few years. I think this accounts for some of the Keystone Cop antics we've seen lately. Correa and his team are in a race against time. If there's a case for a softening of their position somewhere down the road, I think this is it. From what I've read of Correa, he understands the macro issues well enough, but he's still got to accomodate some pretty hefty demands, some of which run counter to his agenda. I'll give him credit for having made it this far, but the honeymoon's almost over, and the rubber is about to meet the road...

I am starting to feel more positive though, even if we are getting some seriously mixed signals. One thing that weighs heavily in our favor is the number of Canadian companies presently engaged. The battle for hearts and minds is being fought on the ground by some pretty upstanding characters IMO. Something our friend Casey seems to have forgotton, ie. the importance of having the right people.

ebear