Dollarization

by purveyoroffinemoments

Because I’m quickly running out of it, and because this has been on my mind the whole time I’ve been in Central America, I want to briefly discuss the impacts of dollarization before delving into my going ons.  I want to note that I am not an economist.  This is not my area of expertise, but rather an area that has interested me in my travels.

What is dollarization?

From the holy halls of wikipedia, ¨Dollarization occurs when the inhabitants of a country use foreign currency in parallel to or instead of the domestic currency as a store of value, unit of account, and/or medium of exchange within the domestic economy.¨  As an ignorant traveler I was surprised to discover my american dollar was readily accepted everywhere I went.  Sometimes prices were exclusively written in dollars rather than cordobas in the case of Nicaragua.  If the price were written in cordoba I could get more for my dollar if the exchange rate is high.

What is the impact of dollarization?

On one side using foreign currency is often a technique to stabilize economies.  Usually it is used to prevent an extreme devaluation of a country’s exchange rate, provide lower interest rates, and attract money from foreign investors.  This at face value may seem beneficial for economically unstable countries, but after talking to many locals I have developed a different perspective of dollarization.  I spent one hungover morning having a good conversation with the security guard at my hostel in San Juan Del Sur.

I was talking to him about the revolution, and what has happened since.  This lead to a discussion on the history of currency in the country.  I asked him how he felt about the dollar’s widespread acceptance in Central America.  He starts off by saying that it has made the price of everything go up.  He tells me about the amount of food he could buy in the pre US dollar acceptance days to now.  Without going into too much political discussion he starts talking about the relationship between current president Daniel Ortega, the IMF, and the World Bank.  He didn’t paint a kind picture.  Overall people I’ve talked to are far over American involvement in the country.  If you want to know about recent American involvement in Latin America, I suggest just googling Central American and US involvement or Latin America and US involvement, or something similar.  It really is modern day imperialism.  This may sound extreme until you objectively look at history.  It’s still going on today.

In my trip one of the biggest shockers was how NOT cheap shit is down here.  I mean it is definitely less, but not proportionately less considering the individual income.

If you know more about these subjects, please message me.  I’m quickly gaining deep interest in these areas.  I could go on and on and on and on.

Enough about that.  It’s really just all part of my traveler’s guilt.  Well more like hating my country’s foreign policy.  But that’s not anything new…

Since my Granadan debacle, I headed back to San Juan Del Sur, and partied for one night.  I met crazy fucking Israelis and ended up in a heavily mysoginistic conversation with an Israeli and a Canadian.  The Canadian said, ¨I know it’s time for me to leave a town when I’ve fucked all the hot chics there.¨ Mind you he was not at all cute.  I’ve met a lot of self-professed man hoes.  Proud man hos.

Feeling disgusted with humanity I hop a long hot bus ride the next morning to Popoyo.  Everyone I’ve met said I’d love it.  They weren’t wrong.  I’ve spent the day in waves, chilling in tidepools, and living the simple life.  Since I’ve been here the powers gone out, the waters gone out, and I made flip flops out of cardboard.  They didn’t last long.  Popoyo is just about being with the ocean, people, and food.  Basic shit that I needed to get back to.  Despite being content to be here now, I wish I wouldve found this spot at the beginning of my trip.  I couldve stayed here for a month.  It’s super fucking mellow.

I’m still here and I want to come back.  Lesson learned.  Never stray from the ocean.  You are it’s bitch.

Good and bad news:  I’m out of money and I don’t have the stamina to continue working.  I feel like I’ve missed out on a lot.  I changed my flight to come home sooner.  My head hangs low, but what can I do?  I’m ready to cut my losses and plan my next trip.  I’m hooked. The world is big.  I am small.  Yesterday I found out I got into the Cal Poly SLO program for City and Regional Planning.  So my future is still in the beautiful Central Coast of my beloved California.  Not a bad prospect.  I hope to get an opportunity to do some work abroad. I am hypnotized by latin america and i havent even seen most of it.  I want to get to know all of it.  it is in my blood.  i feel the ties.

i really want to go to veracruz.

for now, i’ll enjoy my last broke days in nicaragua.  i may have to do a quick crossover into costa rica and live in the airport for a couple days.  at least it’s safe.

 

 

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