Continuing the COHA critique
OK, so maybe it's not nice of me. There are plenty of crazy groups out there that make COHA look sane and reasonable. But now that I got started reading their recent articles this morning, just one more. This one is more style than substance.
In their article "Sovereignty Sinks in Latin America as Dollarization Rises" the researchers claim:
1) None of the three dollarized countries have experienced major benefits
and
2) Partial dollarization is a better solution.
On point one they're correct that dollarization was not a magic cure-all for Ecuador or El Salvador's problems, but they don't bother to show whether any other system did significantly better during this time period. For example, Venezuela's economy is still performing below where it was four years ago, Bolivia isn't developing all that fast and the other Central American nations aren't exactly glowing models for economic development. Dollarized countries have done about the same economically and seem to have traded one set of problems for another.
On point two they have this to say:
Somehow, COHA manages to miss the fact that less than ten years after Argentina committed to the pegged peso plan, the Argentine government and economy collapsed, the country went through five presidents in two weeks, they experienced their first major malnutrition cases ever in the country and today the poverty and unemployment levels remain incredibly high in a society that used to be seen as a model for the region. I don't believe that partial dollarization was the reason for the above events, but the system did exacerbate the problem near the end.
It's also probably not helpful for their argument to portray Carlos Menem's economic policies as positive in one article only to go criticize the Washington Consensus, for which Menem was the poster child, two days later in a different article.
If COHA wants to make the case for partial dollarization systems and the only real example they provide is Argentina, they should explain in their article why the system collapsed in a way far worse than Ecuador and El Salvador have faced under dollarization.
The point here isn't to praise one system or another, because it's quite possible that partial dollarization is a good solution. But COHA shouldn't pick and choose their facts while making an economic argument. They shouldn't ignore the last five years of Argentine history with the economic and political collapse because it doesn't fit their conclusions. And when describing development, they can't consider their dollarized countries in a vacuum but need to put them into the context of how Latin America has done on the whole.
In their article "Sovereignty Sinks in Latin America as Dollarization Rises" the researchers claim:
1) None of the three dollarized countries have experienced major benefits
and
2) Partial dollarization is a better solution.
On point one they're correct that dollarization was not a magic cure-all for Ecuador or El Salvador's problems, but they don't bother to show whether any other system did significantly better during this time period. For example, Venezuela's economy is still performing below where it was four years ago, Bolivia isn't developing all that fast and the other Central American nations aren't exactly glowing models for economic development. Dollarized countries have done about the same economically and seem to have traded one set of problems for another.
On point two they have this to say:
A number of Latin American countries have taken advantage of partial dollarization, including Argentina during the decade of rule by President Carlos Menem.They then go on to praise the benefits of partial dollarization with Argentina as the main example.
Somehow, COHA manages to miss the fact that less than ten years after Argentina committed to the pegged peso plan, the Argentine government and economy collapsed, the country went through five presidents in two weeks, they experienced their first major malnutrition cases ever in the country and today the poverty and unemployment levels remain incredibly high in a society that used to be seen as a model for the region. I don't believe that partial dollarization was the reason for the above events, but the system did exacerbate the problem near the end.
It's also probably not helpful for their argument to portray Carlos Menem's economic policies as positive in one article only to go criticize the Washington Consensus, for which Menem was the poster child, two days later in a different article.
If COHA wants to make the case for partial dollarization systems and the only real example they provide is Argentina, they should explain in their article why the system collapsed in a way far worse than Ecuador and El Salvador have faced under dollarization.
The point here isn't to praise one system or another, because it's quite possible that partial dollarization is a good solution. But COHA shouldn't pick and choose their facts while making an economic argument. They shouldn't ignore the last five years of Argentine history with the economic and political collapse because it doesn't fit their conclusions. And when describing development, they can't consider their dollarized countries in a vacuum but need to put them into the context of how Latin America has done on the whole.
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