Business

Economics

A lack of common cents— Harare

Preface

Few shed tears for the demise of the Zimbabwean dollar.

Zimbabwe, Currency, Dollar, Government, Inflation

29 September 2009

Few shed tears for the demise of the Zimbabwean dollar. When it was finally scrapped earlier this year the largest denomination of the world’s worst currency was a whopping $100 trillion. It was worth about €8.

The country’s new finance minister, Tendai Biti, replaced the currency with its American counterpart. The effect has been dramatic. Salaries remain low but at least they keep their value. Runaway inflation, which reached 500bn per cent at its height, is now at 1 per cent. Endless queues for bread, fuel and cash have become a thing of the past.

There is one drawback though. There are no coins and the smallest denomination in circulation is a $1 note, which has made buying things that cost less than a dollar a bit tricky. A bottle of Coke costs ¢50 so customers have to buy two. Change is sometimes given in sweets or IOUs. Zimbabweans have been adapting as best they can, bartering and haggling for a good price. One recent report told the story of a woman who paid for her bus fare with a live chicken.

It has been a year since Robert Mugabe’s Zanu-PF party grudgingly accepted to form a unity government with its rival Movement for Democratic Change (MDC). While baby steps have been taken to improve the economy the report card in other areas is not so impressive.

Under the terms of the deal, which saw Morgan Tsvangirai become prime minister, Mugabe kept a firm grip on the security forces. He has used them to crack down on his rivals both inside and outside government. In a blatant attempt to rejig the parliamentary maths, at least 15 MDC MPs have been arrested, while MDC supporters and human rights campaigners continue to be harassed. The farm invasions, which helped to bring the economy to its knees at the start of the decade, have continued.

Tsvangirai has looked on, seemingly unable to do anything to prevent Mugabe, despite his new powers.

Human rights campaigners won a rare victory on Monday when the High Court ruled that a leading activist, Jestina Mukoko, could not be put on trial for terrorism because she had been tortured by the state. She had been arrested at dawn and taken to a secret location where she was locked in a freezer and repeatedly beaten over a three-week period.

Mukoko had been accused of a plot to oust Mugabe. It’s a tactic the regime has employed on many of its opponents in recent years, including Tsvangirai and Biti – both of whom have been arrested before on charges of treason.

Freed from prison just before the unity deal was agreed, the charismatic, bowler hat-wearing Biti now has to work closely with Mugabe to solve the country’s economic woes. While the two men disagree on what caused the crisis – Mugabe blames the West while Biti blames Mugabe – they at least share the belief that radical measures need to be taken. There have been disagreements on the way forward. For instance, Mugabe has publicly called for the return of the Zimdollar. But so far Biti has held the upper hand. Zimbabweans will be hoping that remains the case.

Monocle 24

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