Hyperinflation and the collapse of Zimbabwe

[Cowperson]

Today's New York Times has an interesting look at an economy where the government attempts to control everything . . . .

Doomsday in Zimbabwe should be soon.

The government awarded all civil servants a 300 percent raise two weeks ago. But the increase is only a fraction of the inflation rate, so the nation’s 110,000 teachers are staging a work slowdown for more money. Measured by the black-market value of Zimbabwe’s ragtag currency, even their new salaries total less than 60 American dollars a month.

Doctors and nurses have been on strike for five weeks, seeking a pay increase of nearly 9,000 percent, and health care is all but nonexistent. Harare’s police chief warned in a recently leaked memo that if rank-and-file officers did not get a substantial raise, they might riot.

The trigger of this crisis — hyperinflation — reached an annual rate of 1,281 percent this month, and has been near or over 1,000 percent since last April.

http://www.nytimes.com/2007/02/07/wo...rtner=homepage

Cowperson

[Looger]

yep, zimbabwe was just a little too successful and had to be dismantled.

i think when looking at this situation it's more telling to look at food production, as it was the breadbasket for much of africa and now with the farms handed over to people who can't run them there is less local food for africans.

[Cowperson]

Originally Posted by Looger

yep, zimbabwe was just a little too successful and had to be dismantled.

Cowperson

[Mr.Coffee]

And economists around the world cheer, for there is now one more case to be studied.

[Cowperson]

Originally Posted by Mr.Coffee

And economists around the world cheer, for there is now one more case to be studied.

Mugabe is certainly going to show up in textbooks somewhere. A more detailed look from one year ago:


The IMF recently urged the Zimbabwe government to implement its turnaround policy instead of just talking and issuing policy statements about it. The fund said the policy should include strong fiscal adjustment; cutting state expenditure; full liberalization of the exchange rate regime; adoption of a strong monetary anchor by reducing money supply; fundamental structural reform, including price deregulation and public enterprise reform; strengthening of property rights and halting invasions of commercial farmland; and improvements in governance.

Noting that the signs of economic collapse were unmistakable, the IMF said, "In the absence of such a comprehensive and immediate policy package, Zimbabwe's economic prospects would be bleak."

In a lengthy interview on state television, President Mugabe dismissed the IMF's orthodoxy as "bookish economics", a "monster" designed to achieve regime change in Zimbabwe. Dumisani Muleya, news editor of the weekly "Zimbabwean Independent," commented in his regular trenchant column that Mugabe instead "vowed to pursue doggedly his own voodoo prescriptions. He said he would continue to print money on a massive scale to alleviate socioeconomic hardships.

“It provided the clearest sign yet that he is rapidly losing his grip on reality. The interview exposed Mugabe's threadbare grasp of modern economics and his struggle to get to grips with global dynamics. It helped to confirm his wholesale abdication of reason and a complete breakdown of common sense in government.”
Vincent Kahiya, editor of "The Independent," has christened Mugabe's love of printing money "Mugabeconomics."

I like the part in this story where it costs more to buy a hot dog in Harare today than it did to buy a house 25 years ago.

http://ens-newswire.com/ens/mar2006/2006-03-14-04.asp

Cowperson

[icarus]

I have several friends from Zimbabwe, all who have very interesting tales from that land. For example, to enjoy a night out on the town you'd have to take a backpack full of cash.

One of my friends had a connection to Mugabe, had met him four or five times, and told me in all seriousness he could arrange for me to meet 'Bob' if I went to Harare. That would have been interesting.

[Vulcan]

I'm watching Bam Margera floating down the Delaware River with a bunch of his idiot skater friends. Pretty funny and one is wearing a Flames sweater. Off topic, not really, I think Mugabe would fit in well with this group, not running a country.