Hungry Zimbabwe

While the United States has been experiencing financial crisis for the past few weeks, Zimbabwe has been experiencing economic crisis for the past several years.

Zimbabwe boasts the highest inflation rate in the world. At 11.2 million percent inflation rate, the country is scrambling to find a solution. Since 2006, Zimbabwe has issued new currency, printed higher denominations of currency and removed 10 zeros (10 billion ZWD becoming 1 ZWD), all to no avail.

The inflation rate is still rising. In February, the price of a loaf of bread in the country was less than 200,000 Zimbabwe dollars. Now, that same loaf of bread costs 1.6 trillion Zimbabwe dollars. In addition, the redistribution of land, giving commercial owned farms to local Zimbabweans, has almost completely destroyed the agriculture sector. Once the breadbasket of southern Africa, Zimbabwe is struggling to feed them selves.

What repercussions does this economic crisis have on the rest of the world? South Africa, Democratic Republic of Congo, and Japan, Zimbabwe’s major export partners, will suffer a cut from Zimbabwean trade. Fall in global demand and the increasing Zimbabwe dollar has resulted in substantial falls in the prices of export commodities.

Fortunately for the local Zim’s, the United Nations has stepped up. This week, the UN Word Food Program launched an appeal to 5 million Zimbabweans who are living on less than $2.50 a day. Also, Zimbabwean governments have licensed some merchants to sell goods in U.S. dollars, to address the shortage of basic consumer goods. Customers, used to buying with foreign currency on the black market on in neighboring countries, are now able to buy sugar, flour and rice at the local market.

According VOA, one shopper states, "The maximum that you can get is 20,000 but I checked in the shop, there's stuff going for 400,000 Zim dollars. You have to go to the bank for 20 days without spending a cent then you buy one item. So U.S. dollar is the way to go at the moment."

Despite the current situation, hopefully President Robert Mugabe can continue taking monetary policy action to put Zimbabwe back in the market.

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