07 August 2007

Mugabe's "Bleed the Rich" Economic Plan Results in 4500 per cent Inflation Rate

The world had great hopes for Robert Mugabe when he assumed leadership of Rhodesia, and changed the name to Zimbabwe. More than the name of the country changed. A once prosperous breadbasket of southern Africa has become one of the worst third world hellholes. How easy it seems, in hindsight, to totally destroy a country!
The accelerated decline of what's left of Zimbabwe's economy might soon leave the embattled president without the cash to pay off those on whom his political survival will depend. As prices spike and waves of Zimbabweans flee the country in desperation, the inner circle of his ZANU-PF party may finally have little choice but to push him aside.

The 83-year old president, in power since 1980, is unlikely to go gracefully. He vows to seek another five-year term in elections scheduled for March. Yet, across his country, high inflation has become hyperinflation. To this point, Mugabe's government has been able to collect taxes and maintain the president's patronage network, buying the loyalty of the army and police. ZANU-PF officials have been able to feed their most useful constituents.

But official estimates now set inflation rates at around 4,500 percent. The real figure is almost certainly much higher. The director of the International Monetary Fund's Africa department warned on July 31 that the figure could reach 100,000 percent by year's end. Prices for consumer goods change several times a day. Meat, produce, eggs, bread, cooking oil and soap have become precious commodities.

Officially, one American dollar buys 250 Zimbabwean dollars, but the black market rate is often 1,000 times higher. A typical pensioner is provided about 6,000 Zimbabwean dollars per month. In Harare, Zimbabwe's capital, a loaf of bread now costs between $Z30,000 and $Z40,000, a pack of chewing gum around $Z15,000.

"Soak the rich" is a popular rallying cry for Hugo Chavez, as it continues to be for Robert Mugabe. It is likely that Chavez--in spite of all his oil--will chart a similar economic course for Venezuela. Economic incompetence appears to go along with dictators who hide their lust for personal power behind high sounding populist rhetoric.

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“During times of universal deceit, telling the truth becomes a revolutionary act” _George Orwell

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