23 June 2007

Zimbabwe staring into the abyss

According to yesterday’s Guardian the US ambassador to Harare predicted that Zimbabwe's inflation will rocket to 1.5m% before the end of the year. Ambassador Christopher Dell said prices were going up twice a day, sapping popular confidence in a government that is now "committing regime change on itself".

"I believe inflation will hit 1.5m% by the end of 2007, if not before," he said. "I know that sounds stratospheric but, looking at the way things are going, I believe it is a modest forecast... It destabilises everything. People have completely lost faith in the currency and that means they have lost faith in the government that issues it. By carrying out disastrous economic policies, the Mugabe government is committing regime change upon itself," he said. "Things have reached a critical point. I believe the excitement will come in a matter of months, if not weeks. The Mugabe government is reaching end game, it is running out of options."

Zimbabwe's official inflation is 4,500% but independent economists and retailers say it is actually above 11,000% and picking up speed. For Zimbabweans living in the turmoil of economic meltdown, hyperinflation is spreading poverty, as even basic goods become unaffordable. Government regulations will only permit withdrawals from banks of Z$1.5m per day, which is not enough to buy a week's worth of groceries.

"I can barely cope with inflation in the thousands, but millions? We will die," said Iddah Mandaza, a Harare factory worker. Mr Mandaza said some workers are now saving on transport costs by "going to their jobs on Monday and sleeping at the workplace until Friday. They all share their meals. That's what they do to get by."

Many Zimbabweans are resorting to barter. "I traded some soap for two buckets of maize meal. It was far much better than trying to buy it in the shops," said worker Richard Mukondo. "People in the rural areas are even worse off. You can see they are hungry and their clothes are in tatters. They trade in whatever they can produce: tomatoes, onions, chickens and eggs."

Tony Hawkins, professor of economics at the University of Zimbabwe, said that no one holds cash in the country any more. "People spend it as soon as they get it. Goods hold their value, not money. The government has run out of solutions. At this rate perhaps inflation could hit 1m%, but one gets a sense that things will crack before then."

Thabo Mbeki's efforts to mediate between Zanu-PF and the opposition Movement for Democratic Change (MDC) are "the last great hope for a peaceful resolution to Zimbabwe's crisis", Mr Dell said.



Your article sure is something to think about. It sure should wake up millions of people because I myself find it very true. Great post and thanks for visiting.

jams o donnell said...

I hope that Mugabe goes as soon as possible Friday's Child. I hope, moreover, that his successor can do something to bring Zimbabwe out of its tailspin

beakerkin said...

Of course when people were saying Mugabe was a thug the far left made standard excuses. The far left is behaving the same way in Uncle Hugo's basket case.

Do make sure that you read my interview with Jungle Mom who is returning to the States. She has spent the last few years in Venezuela and it should be interesting.

I will place your intervew up on Ftiday. Expect at least one Mimi question.

jams o donnell said...

It's been clear for years that Zimbabwe was going down the toilet. The speed of decline has simply increased.