(Bloomberg Opinion) -- Sometime late last month the bodies began to turn up on the streets of Guayaquil. Some of the dead were abandoned in dumpsters. Others had been bundled in plastic and left on the sidewalks of this seaside Ecuadoran city, the yellow and black plastic cordon suggesting an unsolved crime scene.

While most of Latin America is bracing for the worst of the coronavirus pandemic, Ecuador is already overwhelmed. The Andean nation of 17.5 million people is proportionately South America’s most afflicted: Only Brazil has a higher death count, with three times the fatalities for a population 12 times larger than Ecuador’s. (But as Bloomberg News reports, the continent is woefully behind in testing populations for the virus.) In Guayaquil, Ecuador’s largest city, with 70% of the nation’s stricken, coffins are scarce, families wait days for funeral homes to collect their dead and morgues are overflowing, forcing city authorities to store the bodies in industrial refrigerators.

This is not just a tragedy of human health. As Covid-19 claims lives, it also menaces an economy that is already failing. While emerging markets everywhere are in trouble, Ecuador comes to the pandemic with some serious co-morbidities: a huge foreign debt, sinking oil prices, deepening poverty and political fratricide. The only question is whether public health or the economy is in a more precarious state.

The slump in oil prices has gutted winnings from Ecuador’s signature commodity even as public debt has risen to nearly 52% of gross domestic product, well over the nationally stipulated maximum of 40%. That level of red ink can be hard for many countries to handle. For dollarized Ecuador, the surging greenback makes its signature non-oil exports even less competitive and forces the country to pile on even more debt, default on its loans or slash spending even as it battles the pandemic.

Ecuador’s plight is in part the product of collective responses to prior emergencies. One reason Ecuador proved to be so accommodating to coronavirus was its diaspora. Propelled by political instability and a banking crisis in the late 1990s and early 2000s, up to 1 million Ecuadorans have migrated. More than 400,000 settled in Spain, becoming Latin America’s largest expatriate community there, while another 100,000 moved to Italy. Just as these global Ecuadorans nurtured their native economy with remittances, the returnees and frequent fliers have helped spread the contagion back home. Ecuador’s patient zero reportedly was an elderly Ecuadoran who returned to Guayaquil in February and may have infected up to 180 patients. By the time national lockdown orders were in place in March, the virus was already loose.

Dollarization is another two-edged sword. Runaway prices and a banking crisis forced Ecuador to jettison the worthless national currency for the greenback in early 2000. Dollarization stabilized the economy and shielded Ecuadorans from inflation and the economic fallout from political turmoil which routinely ravaged neighboring economies. However, the stronger dollar not only makes Ecuador’s exports less competitive, but ties the nation’s hands in a crisis. Since the central bank cannot print dollars, government can’t monetize its swollen public deficit. With plunging oil prices (crude oil is 29% of exports), Ecuador’s gross financing needs this year are on track to hit an “unmanageable” $8.1 billion this year, according to Oxford Economics. Unless multilateral lenders come to the rescue, the government will have to raise taxes or double down on austerity, a strategy that nearly unseated President Lenin Moreno last year.

While some Latin American leaders have stepped up during the outbreak and seen their approval ratings climb, Moreno has struggled. Once heralded as a reformer, he has seen his credibility shattered by partisan caviling, aggravated by his own well-intentioned bumbling. Nationwide protests late last October forced him to roll back fiscal measures, including a cut in fuel subsidies, prescribed by the International Monetary Fund, whose largesse his government needs even more today. The economy is likely to contract by 6% this year, said Norman McKay of the Economist Intelligence Unit.

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