There's a lesson to be learnt here. Printing money = Inflation. I know it seems obvious, but the Federal Reserve has printed about 800 billion dollars so far, and if our government ends up with a 2 trillion dollar deficit in the next few years, we're going to be seeing the same phenomenon.
It wasn't that long ago (1970s) where inflation in US was 10-15%. Our population has short memories, and we seem doomed to repeat the mistakes of the past (vast government spending relative to revenue).
It's amazing how thoroughly has been completely destroyed in the last decade. What I think most first-world readers miss is that Zimbabwe is not one of those (previously) ultra-poor, undeveloped countries -- it's had a frighteningly long fall to get to where it is now.
IIRC, before Land Reform Zimbabwe was the only African country with a net surplus of food. Zim used to be called the bread basket of Africa.
Putting aside the ideology of Land Reform (that's a whole other minefield of a topic), the execution and economic policies have been woeful.
Another post quoted one issue which was that large tracts of land were broken up, which broke economies of scale. However, it was flawed in a lot of other ways.
The original owners of the land were highly captialised. The people receiving the land often had no experience in cultivation, and even if they did, they had zero capital. They couldn't buy seed, machinery, expertise. The money and expertise required to turn this around pretty much fled the country.
So large farms that produced vast quantities got broken up into small farms that produce almost nothing.
At one stage Zim was in talks with China to have Chinese workers come over and work the land. I don't think that ever came to be, but China is a big player in Zimbabwe still - a lot of tourism, aid, weapons and immigration (several million?) comes from China.
From what I've heard the land distribution was even worse than that -- farms were more often than not given to party hacks rather than poor farmers.
The problem seems to largely have been that the land reform wasn't actually an act for social justice so much as a populist political move. Egypt's attempt at land reform seemed much better planned:
Agreed on your other points. I don't know the politics of the Egyptian reform, but colonialism still turns this in to a very complex set of issue. Especially when you try and distinguish between social justice and populist politics.
Again, if I recall correctly, in the early days of the land reform the UK pledged funds to allow property to be bought back from land owners. I think they even contributed GBP50 million or something (drop in the ocean admittedly), but the rest of the plan was eventually knocked back.
> The original owners of the land were highly captialised.
Err... not to dispute the rest of what you say, which is accurate, but the original owners? I realize you can play that game a long way back in history, but still...
It'd be a start, but sadly just that. That's what's truly sad. The economic destruction has been so thorough, the wave of emigration away so massive, that Zimbabwe will need a generation or two to recover.
I get the impression a lot of the emigration is pretty permanent. Which means they may never recover, in the sense of recovering the lead they formerly held over other countries in the region.
Hyperinflation is caused by external countries refusing to invest in a countries currency, not by internal factors. So the current problem with money they are having is controlled by external entities.
The earth economy is closed, and is not dependent on external planets. The Zimbabwe economy, like all African economies, is strongly dependent on imports of manufactured and industrial goods.
If you actually have an argument and you understand the facts of what you want to argue, then please lay out your points. A silly non-relevant statement does not contribute to the discussion in any way.
Hyperinflation is caused by a loss of confidence in the ability to exchange the local currency for foreign currencies. The Zimbabwe $ became difficult to change following the land reform exercise, and that started the cycle. Once the cycle starts, it's very difficult to stop.
All this has almost nothing to do with the actual economy of the country - many countries have fallen into much worse economic times than Zimbabwe currently is in, and did not have the problem with hyperinflation.
In actuality, Zimbabwe belongs to the top African countries in terms of infrastructure, education and production. It still does so, but it's currently under a lot of economic pressure from outside countries, and one of the effects is this hyper-inflation.
That does not mean that Zimbabwe does not have a very high literacy rate - it is well known that it does because of the government policy towards education.
Compared to the rest of Africa, the Mugabe government has been pretty good, and it was generally praised a lot till the land redistribution exercise started, after which the media portrayal suddenly swung the other way.
Many people who are aware of Zimbabwe only studied the country post 2001, and those that did have their information sources mostly from sensationalist U.S or U.K based papers. They do not attempt to balance their understanding by reading alternative points of views.
Mugabe wasn't horrible, and that's what's sad about all of this -- the land reform was a populist grab that was initiated when he started losing his grasp on the country. He's shown over and again that he's willing to put his position above the interests of the country in the last few years, and that's what'll make him go down in history as a despot rather than a hero.
I've got quite a few friends in Zim and spent a few weeks there a bit back. All of the friends that I visited that are under 35 have now left, mostly to South Africa and a few to Botswana. More than a third of Zimbabwe's population has left the country in the last few years. That's far above par for brain-drain.
The coverage in the west is biased, but the fact that people were voting for the MDC, under fear of persecution, which nobody I talked to a year and a half ago when I was there even took seriously, says a lot.
Some of the inflation has been due to external influences, but it's also true that the Zanu-PF leadership let the countries agriculture and industry fall apart. That there's no food now in Zim is nutty.
I don't think the brain drain from Zimbabwe is any larger than any other African country, or any country that were facing similarly tough economic times.
The farm seizures affected less than 3000 farm owners, and those people typically did not employ highly skilled labour, so the effect that had was not so significant on emigration of university-level people.
I'm not sure what exactly your point is - are you saying that farm seizures in some way affected the level of education in the country?
The economic meltdown and repressive political measures in Zimbabwe have led to a flood of refugees into neighbouring countries. An estimated 3.4 million Zimbabweans, a quarter of the population, had fled abroad by mid 2007. Some 3 million of these have gone to South Africa.
Apart from the people who fled into the neighbouring countries, an estimated 570,000 people are displaced within the borders of the country, many of whom remain in transit camps and have limited access to assistance. Most of the displaced have been victims of the Operation Murambatsvina in the year 2005 and continuing evictions and violent farm seizures.
You say only as many as 3,000 of those 4 million refugees were made so by land reform. Where did you get your figure?
Nonsense. The economic situation came about as a result of the wholesale destruction of the Zimbabwean economy, driven first by massive and unsustainable government spending coupled with the violent nationalisation of farms and leading to crippling price controls and the arrests of hundreds of business executives and company owners. The agricultural sector, once contributing over 20% to the country's GDP, contracted by over 47% virtually overnight and manufacturing, itself contributing another 20% or so collapsed under the weight of price, export and labour controls. All this was self-inflicted.
Zimbabwe was never formally isolated from the outside in the same way that, say, apartheid South Africa was. The only sanctions in place were restrictions on the sale of military goods and targeted sanctions against much of the ZANU-PF and ZDF hierarchy. It's a popular belief that Zimbabwe has been under full economic sanctions, but this could not be further from the truth. In fact, such is the eagerness of the international community to help the country recover that official and developmental foreign aid to the country more than doubled between 2000 and 2005, reaching $367 million at its peak. So there was no economic isolation; instead what we have seen is a country that has destroyed its ability to engage in any meaningful level of economic activity whatsoever. It's not isolated, it just can't do anything with the access it has.
Fact is, nearly one third of Zimbabwe's people have left the country, and they have done so in direct response to the actions of the ZANU-PF government, which have included severe political repression, arbitrary state-sanctioned violence and the kind of disastrous economic policies the rest of us all thought were confined to the 1920s.
Amongst the émigrés have been virtually all of Zimbabwe's best and brightest; the skilled and talented individuals who had once been such a major part what appeared to be the country's boundless potential. And even if Zimbabwe were to experience a change in government and some sanity were to be restored, it will take decades to rebuild the country's economy to its previous levels and very few of the skilled individuals will choose to return. Not after they've established successful lives for themselves in their new host countries. The place faces a bleak future.
I don't usually like to throw the word 'evil' around, since it usually oversimplifies complex situations and makes people fall into the trap of considering events along binary lines. But I don't think there's any doubt that history will quite rightfully regard Mugabe and his ZANU-PF confederates as thoroughly evil bastards. We can debate his supposed justifications all year long, from British support for land-reform (or lack thereof) to perceived Western interference, but none of those come even remotely close to justifying what they have done.
Honestly, I think that the absurd claim you made earlier in this thread, effectively stating that Zimbabwe's economic problems are due to externally-imposed factors, is utterly delusional and illogical. I think you should re-examine your assumptions on this subject.
How can an economy survive with such an inflation? How can you work, knowing that the salary you agreed to at the beginning of the day, is now worth 10 times less
They actively crack down on those using foreign currency, it's actually illegal to use foreign currency for transactions there - although of course everyone does and there is a massive black market for this.
Mugabe also tried to fix the price of common goods - e.g. Bread, Milk, etc.
When will they start using scientific notation on the notes? I'd invest a few dollars at whatever exchange rate just to get a hold of some $10^23 notes.
The tragedy of Zimbabwe is that a functioning, wealth-creating capitalist system that was evolving towards equal rights for blacks over time was sacrificed to satisfy the ego of a strong man, who proceeded to wipe out every trace of capitalism and rule of law, and replaced it with the law of the jungle. Zimbabwe's whites mostly left, so it is the black population that paid the biggest most terrible price. Naipaul has chronicled this process in his books very well.
As a member of an once "inferior" race, I can state with confidence that we were not inferior, we were just behind in adopting the institutions and cultural patterns of modernity. The whites were teaching us that - by example that we could watch and emulate every day. A gradual process of assimilating those values would have served us well. Kicking the whites out took that opportunity away.
Yes, none of this politically correct. That doesn't make any of it wrong either. Yes, there are white racists. Fuck them - they could not have stopped us from learning. Only we could have, and we did.
The interesting thing is that there is probably considerable potential for the population of Zimbabwe to earn foreign hard currency by selling bank notes of this kind of denomination (for example, on eBay, if possible) simply because so many Westerners would find it incredibly novel to obtain one, just for the sheer amazement factor.
It's an economic opportunity to take advantage of just how bewildering the situation is.
What a strange attempt to solve their problems. Maybe there is something wrong with your system if you can't print money fast enough to keep up with inflation.
Read it very carefully. This is USA in the future. 800 bilion bail-out - printed, over 1 trillion budget deficit - printed, another 800 billion bail out - printed. Only 5% of all the US dollars ever created is in circulation in the US. Rest of them are deposited in banks of the rest of the world as I.O.U.s... treasuries (us gov debt) that was bought by foreigners. The very moment foreigners realize that Treasuries have negative R.O.I. - as it will become true once treasuries bubble bursts and Fed starts printing to pay them off... well, this is how the whole Communistic Block collapsed in matter of months - hyperinflation due to inability of repaying debts. The exactly same thing will happen with the USA. Nation with no production, no savings and the biggest debt in the history of the man-kind... this country is going bankrupt. Kaput!
Land reform in Zimbabwe began after the signing of the Lancaster House Agreement in 1979 in an effort to more equitably distribute land between ... blacks and the minority-whites who ruled Zimbabwe from 1923 to 1979.
The results of the post-2000 land reform have been disastrous for the economy of Zimbabwe. Prior to land redistribution, land-owning farmers, mostly white, had large tracts of land and utilized economies of scale to raise capital, borrow money when necessary, and purchase modern mechanised farm equipment to increase productivity on their land. The reforms broke this land into smaller tracts (thereby destroying the economies of scale) and gave it to former black farmworkers and peasants
Precisely that, they're outliers. There's fully grown human beings that weigh 60lbs and ones that weigh almost 1000, it's not normal it just exists because there's 6 billion of us on the planet.
There's hundreds of countries, so obviously not every single one will follow due to statistics.
the inadequacy and bias of the IQ system in measuring and representing intelligence
Why do you believe there is inadequacy and bias in mental ability testing (the IQ system, as you put it)? Have you read this Citation Classic on the subject?:
It wasn't that long ago (1970s) where inflation in US was 10-15%. Our population has short memories, and we seem doomed to repeat the mistakes of the past (vast government spending relative to revenue).