Thursday, January 8, 2009

Failed State Blues

With unemployment near 80% and an inflation rate a surreal 231,000,000% (!!), Zimbabwe has unofficially dollarised, that is, taken a foreign currency as its de facto currency.  Citizens have abandoned the Zimbabwean currency and are widely using U.S. and South African currencies to make everyday purchases.  

The government refuses to acknowledge the extent of the problem, claiming their own currency as still the law of the land.  Some say that dollarisation is a bigger threat to sovereignty than re-colonization given how important money is to a nation's identity.  

To make it official would require an okay by the U.S., which is unlikely.  Zimbabwe is in talks with South Africa to help extend their currency, the rand, into the area and save the economy.  

One of South Africa's negotiating demands is that Mugabe agree to a legit power-sharing deal, which has as yet proved futile.  I suggest they refuse to prop up the economy unless Mugabe unequivocally steps down.   


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