oil/Ecuador/Venezuela/petrodollars/bolivarian revolution

Today’s Washington Times features an article on Ecuador “Economic Crisis Starts to Show up in Ecuador”, in which author John Zarocostas writes:

“The global economic crisis that began in the United States has spread to several nations in Latin America – and Ecuador, an Andean nation dependent on oil exports, is among the hardest hit.”

Ecuador, is in fact, an oil-dependent economy. Over 60 percent of its $13.7 billion in exports consist of crude oil, according to the Ecuadorian Central Bank. Oil revenues finance about 40 percent the country’s budget. And according to a J.P. Morgan study, every $10 drop in the oil price would lead to an increase in the current account deficit equivalent to 2 percent of the country’s GDP, and an increase in the fiscal deficit equivalent to 1.3 percent of GDP.

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