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Record Inflation

Zimbabwe dumps own currency

Wolfgang H. Thome, eTN Africa  Apr 14, 2009

In a move not entirely unexpected, the Zimbabwean government and the Central Bank of Zimbabwe decided over the Easter weekend to throw their own worthless currency out of the window, replacing it with foreign currency use for at least a year and possibly much longer to allow the country to recover from hitting rock bottom.

Record inflation, despite several currency "reforms," which over the years slashed dozens of zeros off the local "Zimbabwe dollar," runs at more than 230 million percent, a figure previously not seen anywhere else in the global economy.

The economic collapse of Zimbabwe, formerly a flourishing country with an intact agricultural and tourism base, was initiated by regime leader Mugabe’s failed land policies, which – instead of fairly distributing land to the landless – saw his cronies grab productive farms and destroy the basis of food production, leave alone generating export crops.

The country degenerated into a hunger society, where progressively social services, maintenance of infrastructure, and eventually the entire social fabric broke down irreparably as it turned from breadbasket to basket case.

A recent widespread cholera outbreak found the National Health Service unable to cope, leading to thousands of avoidable deaths in the absence of drugs and materials needed in health centers and clinics, while sycophants and "loyalists" for their "dear Bob" hosted a US$1 million bash. Mugabe’s rigged and stolen elections and subsequent shenanigans over a "power-sharing deal" were only aimed at keeping him and his supporters in power, creating obstacle after obstacle for Morgan Tsvangirai’s former opposition party, which now, however, holds a majority in parliament.

Trade in goods across Zimbabwe will now be conducted in US dollars, euros, British pounds, and probably South African rand, besides accepting currencies of neighboring countries. Ordinary people, however, in villages across the country will find it hard to get hold of foreign money making it arguably even more difficult to access goods and services.

The broke country had in past years spent mega millions of hard currency to print, print again, and then print some more bank notes, but even a wheelbarrow load would not have paid for a weekend’s shopping, already having lost hundreds of percent in value enroute from the bank to the shops. Mugabe’s failed policies turned the former liberation hero into an international villain who squandered the wealth of his nation in his pursuit of staying in power.

Zimbabwe dumps own currency
Mugabe eating cake at his 82nd birthday celebration. - Image via

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