Saturday, August 19, 2006

How not to run an economy

As regular readers of this blog will know (if there are any of you left after so prolonged an absence) the Reptile was once a student of economics and has retained all the intellectual curiosity and spark of A-level students everywhere. However, and I stand open to correction by real economists, I think I have found a real beaut of a case study.

The situation is this:
1. Inflation is running at approximately 2,000%
2. Unemployment is about 60-70&
3. An AIDS epidemic affects some 30% of the country
4. The currency has devalued from a point where £1 = Z$19 in 1997 to one where £1 = Z$100,000

What do you do? Well if you're Robert Mugabe, you announce a currency revaluation. And that's it. Pure genius really, to take a country with a diversified economy, healthy agricultural sector and significant mineral wealth, add to it one of the ebst educated populations in Africa and turn it all to shit. A post may follow on the reasons for this, but honestly, when a Government decides to print money to meet a cash shortage I think that tells you all you need to know.


Anonymous Anonymous said...

Yes well any one who has followed this mess for a reasonable amount of time will understand the only reason Mugabe is still in power is the peaceful nature of the Zimbabwean people, their heartfelt fear of a crackdown on dissent (In Zimbabwe, a meeting of two or more people is illegal, as is the insulting of their president in any way shape or form). There is also confusion on how to change the nation for the better. Could there be riots on Monday when the old bills are worthless? One can only hope...

9:30 pm  

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