Wednesday, July 30, 2008
All Your Zeroes Are Belong to Us
What do you do when hyper-inflation makes your currency worth less than the paper that it is printed on? Lop a few zeroes off here and there and everything will be right as rain.
Zimbabwe’s economy is unravelling at such a pace that the central bank is set to slash yet more zeroes from the country’s increasingly worthless currency.
State media on Sunday quoted Gideon Gono, the Reserve Bank of Zimbabwe governor and one of the members of the ruling elite targeted by fresh western sanctions last week, as saying he would extend a currency policy that has so far failed to stem hyperinflation.
“This time, we will make sure that those zeroes that would come knocking on the governor’s window will not return,” Mr Gono was quoted as saying on Saturday in a speech to farmers.
Independent estimates put Zimbabwe’s inflation rate well above the official 2.2m per cent, prompting the introduction last week of a 100bn Zimbabwean dollar note. Even state media reported Mr Gono’s comments “drew laughter” from his audience.
The governor is expected to chop three or six zeroes from the currency, following a three-zero cut in 2006.
Beside the inflationary zeroes haunting Mr Gono, analysts and some opposition politicians say the crumbling economy in what was once a regional bread basket is perhaps the single greatest factor that might force Robert Mugabe, president, into relaxing his grip on power.
To the MDC negotiators: just say no to powersharing. Anything that leaves Mugabe with official standing or official government seat is purely a lie. Over these past two decades he has destroyed an economy, watched as infrastructure crumbled, ruined the country’s largest industry (farming, led an violent and oppressive regime, starved political opponents, stolen elections, and still, somehow, maintained some claim to legitimacy. That lie can’t be tolerated any longer.