Zimbabwe: A dreadful saga of inflation

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Zimbabwe DollarsIn Zimbabwe every person is a millionaire. He has a capacity to spend millions of Zimbabwean Dollars (ZD) every month. It is true, have no doubts. Actually he does spend millions of dollars. It’s fact, not fiction.

However, it is also true that knowing this very truth revered economists deny calling it a prosperous nation. Not out of psychosis, but of sanity. A mere sausage sandwich here costs 30 million ZD. That’s true, thirty million! That apart a 30 pound bag of potatoes, which would cost 90 million in the first week of March, is now estimated to be costing over 160 million ZD. Why? That’s because of inflation, which in case of this African nation has surpassed over 1,000 %.

Before I dive a bit deep into the subject here’s a brief definition of inflation, for those who have never heard of this economic terminology: ‘Inflation is a measure of rise in price level of goods and services, measured up by taking set of goods and services and then prices of the items in the set are compared to prices one period ago.

In 1979, when Mugabe’s nationalist rebels overthrew the white dominated government of Rhodesia, and changed the name of the country to Zimbabwe, it was among the most prosperous of the African Nations then. All the farms which once would have enough and more of food grains and thus export to earn a foreign exchange now lay barren – virtually. Needless to say that agricultural productivity is at all time low. This year the country’s shortfall in maize is 360,000 tones, and its short fall in wheat is 255,000 tones.

Have you heard of a country which is dotted with malls filled with goods, but no customers? It is Zimbabwe – ‘the land of Mugabe’. The food in the shelves of those malls is so exceedingly charged that it is just impossible for a common man to afford.

The cash is a worthless possession here now. That apart, Zimbabweans have battled severe shortages of cash over the past four years due to an economic crisis, that which is described by the World Bank as ‘unprecedented for a country not at war’. The exchange rate of ZD is 50 million: 1. Yes, that’s right, you get 50 million ZD in exchange for 1 USD.

To encounter the problem of weighing cash at Exchanges (as counting becomes virtually impossible), the Reserve Bank of Zimbabwe (RBZ) has introduced a new note worth 50 million ZD also to deal with rampant shortage of cash in an economy that is also grapping with world’s highest inflation rate. The 50 million ZD note has been introduced in the market after RBZ also increased the maximum withdrawal limit for individuals to 50 billion ZD a day. And with cash being an insignificant custody, people have started investing in a different commodity. They stack bags of maize meal in their homes.

Zimbabwe is a classic case of how inflation can make life hell for people. Experts say it all started with ‘Mugabe’s regime’. Whatever may be the reason: the truth is that Zimbabwe has lost the ability to feed itself. Before independence majority of farmers and farm land owners were whites, who were expelled or persecuted irrationally leading to their mass exodus. This has resulted, ever since, in the substantial decline of agricultural outputs of the nation, year after year. The nation is also an example for the world how inflation can ruin a country which does not produce enough for her people.

Worsening the state of the nation, further, is the political chaos. There has been controversy over the elections and the issue has been put forth to the High Court, it is expected to announce on Monday whether it can order the country’s electoral commission to release the result of last weekend’s presidential election. The people are eagerly waiting for the economically tyrant President Robert Mugabe to vacate and make way for change. But it seems the sitting president is unwilling to give up. Meanwhile dozens of veterans loyal to Mugabe have invaded white owned farms in two provinces and have tried, in vain, to force those white farmers out. Senseless they are and also ruthless.

Commenting on the election results Daniel Calingaert, a Zimbabwe analyst for US based Freedom House, has said that Mugabe’s ruling ZANU-PF party wields ‘quite a bit of influence over the high court’. The party has also rejected the offer from its opposition MDC to form a national unity government. Considering this the mess is far from being cleaned up in the near future. I am scared to even think about the state of this African nation. What would happen to them? What would they eat? Would someone like to come to their rescue? It’s impossible to imagine.

From the chaos of Zimbabwe there is one essential lesson for us Indians to learn from: If you don’t have agricultural commodities the prices are bound to go up. This is a crucial lesson for us. Let me bring to your notice that supply of basic commodities is not growing in proportion to the population in India. And such a situation of extraordinary inflations might be a possibility in India too, later if not in the near future.

With over a billion populations, there is hardly any country in the world which can cater to India’s food grains demands. To sustain our belly we need a strong agricultural frame work. Our agriculture ministry, at the centre and at state, is doing little other than fixing compensation amount to the family of farmers who have, and are to commit, suicides.

It is the ultimate time for us to shift our attention from the little tax paying and unjustly demanding IT industries to work on the agriculture sector. Silicon Chips are good but can seldom satisfy the appetite like their vegetable counterparts. Won’t you agree? I am sure you will.

Author is the Editor-In-Chief of Aseemaa: Journal for National Resurgence.

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