Consider this for reality (From an article in the New York Times):
A roll of toilet paper – $145, 750 (about 70 US cents)
Smallest currency denomination – $500 bill
(Hyper)Inflation rate – almost 1000% (Is it war time?)
Worker population – 4.2 million
Official unemployment – 70% (80% including idle farmers)
Salary raises for teachers and soldiers – $33 million a month (and that’s still below poverty line!)
Cost of childbirth – $7 million
Cost of a funeral (at its barest) – $6 million
Robert G. Mugabe – The SoB behind all this
That’s the inflation situation in Zimbabwe. Going back to the title of this post, what is luxury in Zimbabwe? Anything from bread to newspaper and meat to a cup of tea is unaffordable. How did this happen? Well, when you have a ruler like Mugabe, it shouldn’t be that difficult. Let’s see. Print zillions of worthless Zimbabwean dollars, seize all commercial farms and chase all the foreign investors away bringing the manufacturing industry to a standstill. This should result in shortage of foreign imports due to depletion of indigenous goods and foreign currency needed to buy imports, and voila! You have an economic (and needless to say, political) crisis. Keep this cycle going for around 7 years and you have the Zimbabwe of today. Pretty simple, isn’t it? And how naïve was I to think that the ingenuity of Mugabe was restricted to reducing Zimbabwean cricket to shambles!
"Normal horizons don't exist here. People live hand to mouth," Mike Davies, the chairman of a civic-watchdog group called the Combined Harare Residents Association, said in an interview. Are you sure you didn’t mean ‘hand in mouth’ Mr. Davies? From what I gather, that is the only thing that the normal population can actually afford (hopefully). And I’m certain you don’t need a couple of PhDs and twenty odd years of relevant experience to infer that!
I knew as soon as I heard the name Mugabe, that there is something evil about him (remember “Mugambo khush hua” from Mr. India?). Oh, and he didn’t stop at that. Apparently, he has come up with a kick-ass plan to put an end to this inflation by the end of the year. According to certain official estimates, this is the 7th such plan in the past 10 years. Wondering what this eleventh hour miracle plan is? No one knows. All I know is in February, the government (read Mugabe, we all know it’s a one-man-show) admitted to printing at least 21 trillion new dollars to buy American dollars in order to pay off IMF’s US $221 million debt. Wondering what Mugabe was busy doing? Well, he was supervising the finishing of his 25 bedroom mansion north of Harare, near the plush houses of high profile ministers and military allies.
Now the interesting part (No, no really. It’s the icing on the cake). While people in cities and downtown Harare lead a life which would make the street dwellers in the hidden alleys of San Francisco or even the inhabitants of a chawl in Mumbai look like millionaires, on the other hand, in the rural areas, where subsistence farming is the only industry, millions of people are guaranteed free monthly rations from the United Nations and other donors. And isn’t that better? They’d rather have food to eat than cash at hand, since the value of the dollar is going down by the day. And the banks, which pay a meager 4% to 10% interest, are not of much help. [1]
According to the article, in Harare, north of downtown, diplomats and aid workers are financed with American dollars. Generators and bottled water are the norm, the cafes still serve cappuccino and the markets sell plump roasting chickens, albeit $1 million chickens.
As I see it, as long as Mr. Mugabe is in power, the probability of a revived economy in the near future is anyone’s guess. No matter how brilliant a plan he conceives, not much could be hoped for. I agree with the economist John Robertson, who is looking into the situation, when he says “much more inflation”. Mugab-way has always been printing its way out of the economic crisis, although that’s what brought about this mess in the first place. Quite like visiting a dentist, a vicious cycle, isn’t it? Zimbabwean cricket might cease to exist, but this way one thing is certain – Mugabe will hit the common Zimbabwean for a six! I must admit though that I’m not an expert in the political economy of the state. I’ll leave that for my dear friend, Buddha.
[1] Excerpts from the article which illuminate the plight of the common man:
Ms. Musoni's latest monthly bill for services from the Harare city government was $2.4 million. The refrigerator in her closet-size kitchen is empty except for a few bottles of boiled water. Christmas dinner was sadza, or corn porridge, with hard-boiled eggs. For Easter, there was nothing.
Unity Motize, 64, lives with her 65-year-old husband, Simeon, in Highfield, a middle-class suburb turned slum not far south of town. The couple occupies one room of their three-room house. The second sleeps two sons, their wives and their two infants, all left homeless last May after riot police bulldozed the homes of hundreds of thousands of slum-dwellers. A 23-year-old son and an unemployed daughter sleep in the living room.
Mother and daughter make as much as $10 in American money each week by selling vegetables, from 7 a.m. to 6 p.m. daily. But the profits are being consumed by rising costs at the farmers' market where they buy stock. "Like potatoes," Regai said. "I went last week, and it was $500,000 for a packet. And when I went this weekend, it was $700,000"
Born in Chennai, India and raised in Scotland before her parents migrated to North America – This is the story of a 19 year old Non Resident Indian (NRI) Harvard sophomore called Kaavya Viswanathan. The teenager shot to fame in the ‘chick lit’ world when she was paid $500,000 for a two-book contract with the publishers Little, Brown. Following that, she reportedly got a movie deal from Dreamworks in California. The first of the two books, titled How Opal Mehta Got Kissed, Got Wild and Got a Life, hit the stands recently. 