gold_flamingo (gold_flamingo) wrote,
gold_flamingo
gold_flamingo

food for thought

It is a commonplace of modern American life that you and I enjoy a standard of living whole orders of magnitude above what the majority of people alive today will ever know. We may worry about affording a new car, or a bigger home, or a better television, but we don’t worry about finding something to eat when we’re hungry. We don’t have to choose between buying a loaf of bread and paying the bus fare to get to work. We don’t wake up one day and realize that we can’t afford either anymore. We know we’re lucky, in a historical sense, but we don’t think about it too much. It seems like there’s always a humanitarian crisis somewhere, and we read about it in the newspaper, and think it’s too bad, and give a few dollars to charity now and then – there are always so many to choose from.

But seldom is there a perfect storm of catastrophe like what has occurred in Zimbabwe over the past eight months.  I'm sure much of this is familiar, but bear with me for a quick review:

By January of this year, almost all of Zimbabwe had gotten 150% of its expected rainfall, meaning that floods and erosion seriously disrupted farming efforts and damaged existing crops – food which would be especially necessary as grain production in 2007 fell by almost half of its 2006 level. At the same time, President Mugabe (facing mounting debt and the pressing need to keep money flowing to government workers, the army, and the revolutionary veterans who formed a crucial block of his political support in the lead up to an election in which he faced a resolute challenger in Morgan Tsvangirai) was printing money by the truckfull. Between late November 2007 and late January 2008, the country’s circulating money supply increased from ZW$58 trillion to ZW$800 trillion. Already facing runaway inflation, Mugabe had previously tried to stop the process by declaring price increases illegal and arresting retailers and factory owners who raised prices. As skyrocketing costs of labor and basic materials made it impossible to manufacture goods for the price that could legally be charged for them, the economy ground to a halt. Stores emptied.

In February, the official rate of inflation passed 100,000%

By March, the government was printing currency at a rate of ZW$170 trillion per week. On the 19th, a presidential and parliamentary election was held. No winner was announced in the presidential election.

In April, Mugabe ordered or permitted militias to begin systematically beating, displacing, and killing opposition supporters. Opposition headquarters were raided, and their workers and the refugees they sheltered were arrested.  The government stopped calculating inflation because there were no longer enough goods available to reliably gauge prices.

In May a runoff election was announced. Violence continued. Opposition supporters were driven from their homes or stripped of ID cards to keep them from voting. Amid the chaos, agriculture was silently failing. By the middle of the month, only 12% of targeted farming area was ready for planting, and less than a quarter of the necessary fertilizer was available. Meanwhile, the shortage of viable capital stymied investment, while the rise in global commodity and oil prices raised the cost of seed, transportation, and just about everything else.

In June, Mugabe banned NGOs from the country, effectively cutting off food aid in the midst of a mounting humanitarian crisis. The military and police seized food supplies already on the ground and distributed them to Mugabe supporters. The government announced a prisoner amnesty and released criminal inmates to free up cell space for political prisoners. While the official inflation rate was 2,200,000%, independent estimates put it closer to 10,000,000%. Tsvangirai, the opposition candidate, dropped out of the presidential race because of the escalating violence against his voters.

In July, the government began issuing ZW$100 billion notes. The day they were released, one would buy approximately three eggs. If you wanted to write a check, you’d have to make it out for double the actual amount to compensate for inflation between when it was written and when it would be cashed. The price of beer went up between rounds. You could take a bus trip to visit relatives and not be able to come home a week later because the cost of the return ticket doubled while you took time off from work, last week’s wages now useless in your pocket. There could be trillions in your bank account but you’d have to spend an hour in line at the bank to get any of it, and the maximum withdrawal allowed by law wouldn’t buy a loaf of bread. Financial planning didn’t mean worrying about retirement, it meant trying to get to the shop before you couldn’t afford your daily meal. Calculators wouldn’t hold enough zeros to assist in any substantial transaction.

On August 1, the central bank revalued the currency at a rate of ZW$10 billion to ZW$1 (new), issuing small denomination banknotes to replace the old ones. Continuing lack of faith in currency stability means that inflation continues apace as no one wants to gamble that the money they receive today will be worth as much tomorrow. Unable to wait for official reports, merchants simply tack on estimated surcharges, particularly for any transactions with checks or bank transfers that involve a delay of payment. As cash for the new currency is still in short supply (small deliveries to banks from the Reserve mean low withdrawal limits and even longer lines), this creates a vicious cycle in which use of bank transfers drive up prices, which increases the amount of currency necessary for transactions, which worsens the scarcity of hard cash, which causes more people to use checks and bank transfers, and so on. The Zimbabwean government blames continuing inflation on predatory, undisciplined retailers who drive up prices (as well as Western sanctions). In the last week, President Mugabe has warned that new emergency freezes on wages and prices may be imminent, and has banned the export of basic commodities – one of the few remaining avenues for bringing viable (foreign) money into the economy. There are chronic shortages of food, water, electricity, and medicine. Violent crime is on the rise, fed not only by socio-economic crisis but also the wave of criminals freed in June, and armed robberies are at a record high in Harare. Over 80% of the workforce is unemployed. Agricultural productivity continues to falter.

The Intl. Red Cross expects that by early 2009, 45% of Zimbabweans will not have access to food. That’s over five million people starving (just for a quick comparison, about the same number died in Stalin’s 1932-1933 forced famine in the Ukraine, though in that more populous area this eliminated less than 25% of the population). The IFRC has made an emergency appeal for donations to help them. Contributions can be made here.

Or we could wait for President Mugabe to save the day.
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