Unparalleled inflation could be Mugabe’s Waterloo

HARARE - Zimbabwe' annual inflation surged beyond 1 000 percent last week, in what analysts said could prove to be the turning point in President Robert Mugabe's political career as public anger swells over the rising cost of living.    There is a groundswell of anger among Zimbabwean

s who have to battle with rising unemployment, shortages ranging from hard cash to food, a currency that loses its value daily, collapsing infrastructure and shrinking democratic space. “I see a spontaneous explosion of anger driven by discontent over the economy,” said Eldred Masunungure, chairman of the political science department at the University of Zimbabwe.
“This trigger will ignite a conflagration which will start off in urban areas and there could be a situation where the security forces will be overwhelmed by this explosion because of both its geographic and spontaneous nature.”
Zimbabwe’s economy last recorded a positive gross domestic product growth in 1998 and has been in freefall since.
Once a breadbasket of southern Africa, the country now survives on food aid after a bloody land seizure drive by Mugabe’s government, which saw commercial agriculture plunging by more than 60 percent, hitting exports and stoking food shortages.
“Certainly the state of the economy has added impetus to the MDC’s call for mass action. There is rising discontent over the way Mugabe has mismanaged the economy,” said Lovemore Madhuku, National Constitutional Assembly chairman.
Analysts say rising inflation, which the central bank has forecast to end at between 280-300 percent at the end of the year is a stark reminder of the failure of government’s economic policies.
The government last month launched yet another economic blueprint it said will see foreign currency inflows of US$2.5 billion in 90 days and change the economy’s fortunes within nine months.
But the International Monetary Fund chief Rodrigo Rato said only radical political and economic reforms would put Zimbabwe’s economy back on the rails, a view shared by most analysts.
Analysts said precedents show that only serious monetary and currency reforms such as those seen in Argentina and Brazil in the 1990s at the height of the South American economic crisis, will bring down hyperinflation or alternatively the collapse of a government.
“The government has clearly showed its shortcomings in tackling the economic crisis,” Harare-based economist James Jowa said. “What is required are tough decisions that include the restoration of property rights, being on good terms with the international community and unpopular fiscal and monetary reforms or otherwise inflation will continue to gallop.”
Mugabe’s government has continued to implement populist economic policies meant to keep a lid on discontent. The government last month announced 300 percent salary rises for civil servants and soldiers and on Friday hiked allowances for chiefs by 600 percent in a move meant to head off the planned opposition protests. – ZimOnline

Post published in: Economy

Leave a Reply

Your email address will not be published. Required fields are marked *