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Sare
Beginner September 2002

In simple terms...Zimbabwe

Sare, 30 March, 2008 at 09:30 Posted on Off Topic Posts 0 16

I don't understand politics or economics very well, so I've just been trying to understand some articles.
Is the reason Zimbabwe has 100,000% inflation because the government just prints as many banknotes as it wants, thus flooding the country with notes and making them worth less and less?

16 replies

Latest activity by Mrs Magic, 31 March, 2008 at 08:35
  • jellybelly.
    Beginner August 2006
    jellybelly. ·
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    I would guess that nobody else has a clear understanding either then ?

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  • Sare
    Beginner September 2002
    Sare ·
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    I guess not?
    That or the economic heavyweights are still in bed nursing heavyweight hangovers.

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  • A
    Beginner August 2007
    alison76 ·
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    I thought it was because they have nothing in the shops to sell due to trade embargoes and whatever they do have is whacked up in price which no-one has any money to buy anyway.

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  • *ginni of the lamp*
    *ginni of the lamp* ·
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    quote:Originally posted by Sare
    I don't understand politics or economics very well, so I've just been trying to understand some articles.
    Is the reason Zimbabwe has 100,000% inflation because the government just prints as many banknotes as it wants, thus flooding the country with notes and making them worth less and less?
    id="quote">

    I don't have a clear understanding of Zimbabwean politics either, but if the govt is printing loads of banknotes, it devalues the currency, making it worth less, so to cover costs you have to pay more. As I recall, it's called hyperinflation. I remember doin a case study on Argentina when doing economics, where prices skyrocketed overnight, so the cash you had on one evening might only get you half as much the next day. Zimbabwe was once one of the most proserous countries in Africa, but years of corruption has left it on its knees. If the opposition get in, they will have the hugest task on their hands to try and even begin to orchestrate a recovery.
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  • St. Knickerless
    Beginner August 2002
    St. Knickerless ·
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    Essentially, yes. But there are other factors. Mugabe is a dictator, and has damaged much of the infrastructure of the country.

    Therefore, supply of even the most basic goods is low, and demand cannot be met. Therefore the cost of goods go up - this is in itself inflationary.

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  • A
    Beginner August 2007
    alison76 ·
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    Http://news.bbc.co.uk/1/hi/business/6597993.stm
    http://news.bbc.co.uk/1/hi/world/africa/6357575.stm

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  • Cedar
    Cedar ·
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    In a nutshell Zimbabwe has pursued aggressive land reform policies - breaking up prosperous farms to hand land over to others. This has killed their thriving agricultural industry, meaning they don't have enough food to feed themselves and can't export any either.
    So there's not enough food in the shops pushing prices up. People can't afford to pay for food on their salaries. Nor can they afford anything else. So then the govt prints more money in higher bank notes. This causes hyperinflation.

    They've also driven off people living in shanty towns around the main towns/cities giving those people no choice but either to return to their ancestral homelands if possible or to head over the border to South Africa. In the rural areas they don't want the people back either as they have no food, etc.

    Add to that the violence, etc that is also going on and you have what was once a thriving country brought to its knees.

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  • S
    spinster chick ·
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    What Cedar says

    In even simplier terms they took the land off the white farmers and gave it to people that had no experience of farming to run, this meant they missed planting windows etc and so produced nothing
    No one is happy and no one has any money

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  • Mr JK
    Beginner
    Mr JK ·
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    What's happening economically in Zimbabwe is broadly equivalent to what happened in Germany in 1923, though the crucial difference was that Germany's hyperinflation was caused by the country being financially crippled by First World War reparation, while the Zimbabwean financial crisis was entirely caused by Mugabe's disastrous land policies and totally avoidable.

    Sadly, I'm not very impressed by the Zimbabwean opposition - I can't fault Morgan Tsvangirai for bravery, but he's hardly a Mandela, Havel or Walesa. But he'll certainly be better than Mugabe for the simple reason that at present anyone would be.

    The real challenge once Mugabe's gone, though, will be making drastic and desperately needed changes without giving the impression that getting rid of the white farmers was wrong. For all sorts of political, diplomatic and racial reasons, this is impossible to admit officially (in much the same way that the British government couldn't admit that they'd love to get rid of Northern Ireland and the Irish government couldn't admit that they didn't want it either) - so what's needed is a comprehensive programme of training the new landowners in how best to exploit their resources. Fortunately, Zimbabwe does have plenty of resources, so the outlook is more optimistic than in, say, Afghanistan (which produces poppies for heroin and not a lot else).

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  • Sare
    Beginner September 2002
    Sare ·
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    Thanks everyone.

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  • HaloHoney
    Beginner July 2007
    HaloHoney ·
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    quote:Originally posted by alison76
    I thought it was because they have nothing in the shops to sell due to trade embargoes and whatever they do have is whacked up in price which no-one has any money to buy anyway.
    id="quote">

    Actually - Zimbabwe was a country that could pretty much feed itself, and a few other african nations. It was called the "bread basket of Africa" for a long time.

    What Mugabe has done is get rid of all of the farmers who knew what they were doing, how to work the land, what crops to grow etc, and install his cronies on the farms instead, who pretty much have no idea what they are doing.

    I'm pretty sure that this has also had some effect on the inflation.

    I did A-Level economics, and learned that cash is like the oil in an engine. Too little and everything grinds to a halt, and too much and it makes a goddamn mess. ?

    I was predicted a U and was 5 marks from a C. they even sent my paper back for re-marking. I wish my tutor hadn't told me how close I was. I am still mad about it now. ?

    My FIL is from Zimbabwe. I never like watching the news with him as it inevitably has something about Zimbabwe on it, and it's heartbreaking to hear him say "I was at school with the guy they just killed" or somesuch. [V]
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  • SophieM
    SophieM ·
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    For a good understanding of the situation in Zim, read Peter Godwin's excellent (but sad) book When a Crocodile Eats the Sun.

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  • catcat
    Beginner April 2007
    catcat ·
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    Off at a bit of a tangent but my sister worked in Zimbabwe for 2 years about 10 years ago. We went over there on holiday and it was amazing, eye-opening and probably a holiday that had the biggest effect on me.

    She lived with a young black Zimbabwean teacher at the time, with his wife and young child. He kept in contact with my family until a couple of years ago when all went silent. His previous letters had asked us to pray for his family as he feared they would starve before the next Christmas and said how terrible the country had become... getting a loaf of bread was virtually impossible due to the cost and thousands were dying. It seems Mugabe has managed to hide a great deal of the bigger picture so although people know some of what is going on, they dont know the half of it.

    We don't even know if Mr Dove and his family are still alive ?. Its crap cos its a beautiful country with the potential to have fantastic tourism etc...


    (On a completely different note - I was 3 marks off a Grade C at A level maths.... Oh how I wished I had bothered to attempt more questions on the Pure papers cos I didnt think I could do any of them)

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  • legless
    Beginner
    legless ·
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    I'm very anxious at the moment for the country as i think these elections will cause some sort of meltdown - final straw type stuff.

    my work colleague spends most of her wages on stuff to send her parents who are still in zimbabwe as the basics are so hard to come by.

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  • *ginni of the lamp*
    *ginni of the lamp* ·
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    quote:Originally posted by legless
    i'm very anxious at the moment for the country as i think these elections will cause some sort of meltdown - final straw type stuff.

    my work colleague spends most of her wages on stuff to send her parents who are still in zimbabwe as the basics are so hard to come by.
    id="quote">

    Me too, I can't imagine Mugabe ceding power whatever the result of the election. If a dodgy election result could send a country as (relatively) stable as Kenya into chaos, goodness alone knows what it'll do for a country as fraught and poverty stricken as Zimbabwe.

    I was interested in Mr JK's comment on not being able to admit it was a big mistake to get rid of the white farmers. I can understand why Mugabe can't admit it, but can the opposition not blame Zanu PF for some really dreadful actions which have brought the country to its knees? I'm not saying that land reform was a bad idea, but it was done in such a way as to damage agriculture pretty drastically.
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  • Zeus
    Beginner March 2005
    Zeus ·
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    quote:my work colleague spends most of her wages on stuff to send her parents who are still in zimbabwe as the basics are so hard to come by.
    id="quote">
    I'd be surprised if any of the stuff actually arrived! Everywhere is corrupt in Zimbabwe.
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  • Mrs Magic
    Beginner May 2007
    Mrs Magic ·
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    quote:Originally posted by legless
    i'm very anxious at the moment for the country as i think these elections will cause some sort of meltdown - final straw type stuff.
    id="quote">Me too. Even if the opposition get in at this or a further round, will Mugabe actually give up control?

    Did most white families leave Zimbabwe? My best friend's fiancé is Zimbabwean but grew up in South Africa, having lived their most of his life (he's 2?, that would make sense with the timing of Mugabe's entrance to government. I remember the white farmers being pushed out but I take it many had left before this? I'll be honest and say I don't understand a huge amount about it but I am trying.
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