On Wednesday,
the regime rolled out an old classic in government economic illiteracy – a
new zim dollar that simply knocks 10 digits off the old currency’s
denomination. So, a loaf of bread that previously cost Z$50 billion now
costs either $50 billion of the old zim dollars, or $5 in new ones.
Zimbabwe’s annual inflation rate, which topped 1 million percent in May, is
expected to rise to 5 million percent by the fall. A loaf of bread costs
what 12 new cars did a decade ago. It hard even to make such comparisons
anymore. They continually change. The inflation rate has accelerated to the
point where the currency is meaningless.
If, as Einstein said, insanity consists of doing the same thing over again
and expecting different results, this policy is truly insane. It has been
tried before, and failed. The “second dollar” was introduced in 2005 in an
effort to combat spiraling inflation. The Zimbabwean dollar was
redenominated in August 2006 at a 1,000-to-1 ratio. Since then, inflation
has raced forward even faster. Evidently the regime now figures that a
10-digit reduction will do the trick.
This, of course, presumes that the redenomination is a good-faith effort.
Likelier it is Mr. Mugabe’s pretext to continue to govern in a state of
emergency. This would increase his leverage during negotiations with
opposition leader Morgan Tsvangirai. Why else would he rediscover ZImbabwe’s
disastrous economy at a critical moment in the negotiations?
Whatever the motive, the markets will deliver the same judgment as always
unless this regime’s arbitrary, confiscatory and repressive governance
somehow ceases. This is a country where, two years ago, the government made
refugees of approximately 1.5 million of its citizens in “Operation Clear
the Trash.” It bulldozed “unlawful” towns and cities in a vicious payback to
the political opposition. This is a country where potatoes are a “strategic
crop.”
The cruel combination of poverty, repression and nearly unparalleled
governing irresponsibility must come to an end.
Washington Times
Post published in: Football