21/04/2024
I've now been on the road for 5 months and 4 days. Think of it this way, if you get two weeks of vacation every year, I've just taken 10 years worth of vacations.
It has been an amazing trip thus far. Two months in Peru, 3 weeks in Bolivia, one month in northern Chile, and just over a month (and still counting) in southern Argentina. I am now in the city of Bariloche Argentina and in a few days I will cross over into Chile and work my way back north to Santiago. That will pretty much take care of all the southern half of South America. My original plan was then to do the northern half of South America, but I've changed my mind...at least for this trip. Allow me to explain.
I've been living in Ecuador since September of 2022. The whole idea for moving there was that it gave me a good starting point for my exploration of South America. Now, in light of events over the past 2 years, I am reassessing that choice and considering relocating.
In case you haven't been following Ecuador over the past 18 months, it's been a rough time for the country. I anticipate Ecuador having some significant financial and political difficulties over the next 5 years.
Obviously there's the recent issue with their raiding of the Mexican embassy. The consequences of this act are still unfolding, but the fallout could be considerable. While it is unlikely that Ecuador will be suspended from the UN, as requested by Mexico, there will almost certainly be financial consequences, both formal and informal.
Last year, in a general election, the people of Ecuador voted to cease oil exploration in the Amazon. While I fully support that idea from an environmental perspective, it is important to note that Ecuador’s government gets about 30% of its total revenue from that oil. If the government carries out the people’s will (it is unclear if that will happen), the national budget of Ecuador will need to be cut by 30%. I don’t see how a relatively poor nation can do that without significant impact on its citizenry. In an attempt to begin reconciling the new financial reality, Ecuador has raised the VAT (For those of you from the US, think of VAT as a national sales tax). I suspect that going forward it will be raised routinely. The price of gasoline is $2.40/gallon for regular and this is only possible due to a significant subsidy by the government. Two years ago Ecuador attempted to raise the price by $0.15 and the taxi and truck drivers shut down the country for a month. I don’t see how Ecuador can continue this level of subsidy and raising the price will almost certainly cause further unrest.
The Chinese have a significant presence in Ecuador, as they do in many small countries around the world, and they have major mining operations for various minerals and metals. Obviously, this generates revenue for Ecuador, but pressure is being brought by various activist groups to reduce Chinas access to mining there. At the same time, I would assume that the government of Ecuador will look for ways to increase the mining revenue and all of this could strain relations with China. The possible financial results are hard to foresee.
And with all of these things happening, there will almost certainly be a drop in both tourism and the number of foreigners choosing the expat life in Ecuador…further reducing the money coming into the country.
OK, so all of this has been to provide the context for what I will do next. After Santiago, I will continue northward and return back to Cuenca Ecuador. I will get an apartment on a short lease (probably about 6 months) while I plan another 6-month trip to explore the remaining countries of South America and evaluate other possible expat living locations. Asia, other Latin American countries, and a couple of locations in Europe are all possibilities.
Perhaps I will stay in Ecuador and perhaps I will go someplace else. Having the freedom to move around is a good thing. Any suggestions?
