Friday, May 23, 2008
Inflation in Zimbabwe.... What the Hell...
Well i still can't imagine how a life would be under these circumstances... When we at India fight to curb even at 10% and most western countries fighting it out at less than 5%, one million is total anarchy..... Seems Mugabe is unwilling to quit whatsoever happens there.. How do the citizens survive ?? When america voicing for global peace and prosperity why can't they help with their hand out.... Probably they dont have any oil resouces do they ???
This is the latest article i managed to get somewhere....
Harare - Weary Zimbabweans are facing a new wave of massive price increases that put many basic goods out of their reach. Independent finance houses said in an assessment Tuesday that annual inflation rose this month to 1 063 572% based on prices of a basket of basic foodstuffs.
As stores opened for business Wednesday, a small pack of locally produced coffee beans cost just short of 1bn Zimbabwe dollars. A decade ago, that sum would have bought 60 new cars. A loaf of bread cost 200m Zimbabwe dollars - enough for 12 new cars a decade ago.
Fresh price rises were expected after the state Grain Marketing Board announced up to 25-fold increases in its prices to commercial millers for wheat and the corn meal staple.
The economy was on shop clerk Jessica Rukuni's mind as she left the public swimming pool in downtown Harare's central park with three disappointed children. She found the new admission price of 100m Zimbabwe dollars - 30 US cents - out of reach.
The divorcee's income is the equivalent of about one US dollar a day. Her family has one basic meal a day. One kilogram of chicken more than doubled to 1nb local dollars Tuesday and rental for a two-bedroom apartment rose from this month's end to 22bn Zimbabwe dollars - eight times the May price.
Inflation will reach 5m%
The state Rent Board, where unfair or inflated rental hikes are reported, has had no working telephones for several months, a telephone operator at the Ministry of Housing said.
In the economic meltdown, manufacturing industries, running at below 30% of their capacity, reported growing absenteeism by workers facing soaring commuter bus fares.
Economic analysts say unless the rate of inflation is slowed, annual inflation will likely reach about 5m percent by October. Zimbabwe's official annual inflation was given by the government as 165 000% in February, already by far the highest in the world.
"The crunch is going to come when local money is eroded to the point it is no longer acceptable" in commercial activities or as earnings, especially by longtime ruler pres. Robert Mugabe's loyalists, said independent Harare economist John Robertson.
Already, more transactions are being done in US dollars, both openly and in secret. Robertson said sectors of the economy - phone services, the supply chain, maintenance of equipment or manufacturing - may collapse one at a time, but a country continues to exist even in chaos or anarchy.
"In the end, a country must fall into line with international financial standards to balance its books" as experience in once-inflationary Latin American countries has shown, he said. He said that meant re-engaging with international financial institutions, lenders, donors and investors traditionally dominated globally by Western countries, the main source of hard currency.
Mugabe has severed ties with the International Monetary Fund, the World Bank and other financial organisations. But Mugabe's "Look East" policy to attract trade and investment from China and Asia has yielded a fraction of what is needed to halt inflation.
In the fastest shrinking economy outside a conventional war zone, much of the nation's crucial savings have been used up in government borrowing and spending without corresponding productive income. "It is as though a starving man has eaten his left foot and starts eating his right foot to survive in the short term," Robertson said. - Sapa-AP