Tuesday, January 23, 2007
The horrors of hyperinflation
Things have reached such a state in Zimbabwe, where the Mugabe regime has destroyed what was once a fairly prosperous economy. The inflation rate was more than 500% in 2005, and ballooned to more than 1200% in 2006. Numbers this large become an abstraction, and it is hard to imagine what life would be like in this type of world, but local historian Cathy Buckle writes regular postings on the situation over at African Tears for those who have an interest. They are tragic reading, but also fascinating.
Some recent excerpts:
December 9th, 2006
In the last month the basic cost of living in Zimbabwe went up by 47% percent. When you go shopping in a supermarket, everywhere you look people are carrying almost nothing. Finding sources of affordable protein is almost impossible. Meat is a luxury now - out of reach for almost all Zimbabweans. Long, long gone are the days when we would buy strips of biltong to snack on as we walked or when butchers would break off pieces of beer sticks to quieten niggling kids. Now people are buying scraps, bones and something called "shavings" which are the white crumbs which accumulate under the blade of the saws and butchery knives. Cheese is off the menu permanently; eggs and milk are very close behind. This week one single egg is selling for 200 dollars and half a litre of milk for 600 dollars (add 3 zeroes for the real cost). A cup of milk or an egg for breakfast is now the height of luxury and when you understand that, then you understand why malnutrition has increased by 35% in young children.
January 6, 2007
This New Year most Zimbabweans are not saying Happy New Year they are instead shaking their heads and asking : how much longer, is there any hope? Just a week into 2007 and everyone is reeling at the massive price increases of everything. Despite all the government pronouncements and promises of an "economic turnaround," Father Christmas did not deliver this elusive gift. Before Christmas a loaf of bread was 295 dollars, now it is 850 dollars - the bakers say its still not enough to cover their costs and more rises are imminent.. (Add three zeroes to get the real price!) Petrol, which continues to be mostly non existent, has apparently increased from 2200 to 3000 dollars a litre and transport costs are said to have gone up by 60%. Since the government announced new price controls and began arresting businessmen before Christmas, almost all basic essentials have disappeared from the shelves. It is now virtually impossible to find sugar, flour, milk, margarine, cooking oil or maize meal in supermarkets. In one large wholesaler this week there were three great long aisles just filled from floor to ceiling with salt. Fine salt, coarse salt, bulk salt - you name it, there it was, just salt. All the oil, flour, sugar and maize meal normally stacked there, had completely disappeared - turned to salt.
I stood next to a young teenage girl looking at the school writing exercise books piled on one shelf. When children go back to school in a few days time they have to provide their own writing books. Most senior school children need 15 exercise books and they are now just over 1000 dollars each. The girl next to me picked up a pack of ten books, turned it over, looked at me, shook her head and said 'eeeish' - and put the books back on the shelf. 'I don't have enough' she whispered and walked away.
January 20, 2007
Long before dawn I received a phone call with the news that an elderly man had died. For the family the pain and grief of the loss was almost immediately swamped with the horrific reality attached to dying in Zimbabwe in January 2007. Doctors have been on strike for over a month and hospital mortuaries are overflowing. The body of the deceased had to be moved, immediately. Petrol has increased in price from 2900 zim dollars a litre on Monday to 3400 dollars a litre by Friday. It was going to cost a whole month's pension for the new widow to have her late husbands body moved the few kilometres to the funeral home.
A wood fuelled cremation could be done but only in Mutare, a town 180 kilometres away. The funeral home wanted 700 000 dollars to transport the body - the same as two and half years of the woman's pension. The quoted cost for the cremation, including the transport, was the same as five years of the widow's pension.
A simple burial in a local cemetery in the least expensive coffin now costs 400 000 dollars. This is the same as six months salary for one of the doctors presently on strike.
Young and old, professionals and workers - we are all alike in this horrible reality of Zimbabwe - we cannot afford to live or to die here.
3 Comments:
By 
D.E. Cloutier, at
Tue Jan 23, 01:31:00 PM:
Unfortunately, mercenary Bob Denard is too old to solve this problem.
From Voice of America last year: "Bob Denard is perhaps France's most infamous and colorful mercenary, blamed for participating in bloody African conflicts over more than four decades. Denard's name has been associated with conflicts in Zimbabwe, Nigeria, Benin, Angola, Zaire and the Comoros islands off the East African Coast."
More at:
http://www.voanews.com/english/archive/2006-06/2006-06-20-voa85.cfm
By Purple Avenger, at
Tue Jan 23, 01:48:00 PM:
Doctors in Zimbabwe are striking now demanding higher wages due to the inflation.
Mugabe is obviously doing this to erase some sort of large debt he had no intention of paying.
By Escort81, at
Wed Jan 24, 12:40:00 AM:
Hyperinflation can certainly drive social and political instability of the worst sort. The example of Germany in the 1920s the classic one. My mother's family was from Budapest and my Grandmother left me some hyperinflated Mark notes, an image of which I am pleased to share with you here.
I wonder what 200,000,000 DM could buy in Germany in 2007?
You don't need to be an economics major from an Ivy League university to know that sound currency is a good idea.
