Posted on 02/20/2006 1:55:42 PM PST by vikingd00d
HARARE - Economic experts on Monday predicted that the final collapse of Zimbabwe's long ailing economy was nigh after President Robert Mugabe confessed that his government had discarded the economics rule book and was printing money to guarantee its political survival.
Besides the obvious push-up effect on inflation, the decision to ignore basic economic rules will scare away the few investors still interested in doing business in Zimbabwe while also dissuading the International Monetary Fund (IMF) and Western donors from providing financial assistance - vital to any efforts to revive the economy, the experts said.
Speaking during a televised interview last Sunday night to commemorate his 82nd birthday, Mugabe said he would continue printing more money, a move he said was necessary because accepted economic principles and monetary rules did not apply to Zimbabwe's economic crisis.
Mugabe turns 82 today.
But Harare-based consultant economist John Robertson said Zimbabwe will pay dearly for the government's decision to ignore economic rules.
He said: "The President may have the power to order his government to ignore the rules but in economics there are severe penalties to pay for such behaviour - economies collapse because people disobey the rules."
Robertson said the Harare administration's chances of redeeming itself as a democratic government guided by sound economic principles and worthy of international support were fast fading by the day, adding that Mugabe's comments were only helping stick the badge of "rogue regime" on his government.
An economist with a commercial bank in Zimbabwe's second largest city of Bulawayo concurred with Robertson saying: "In essence, what the President is saying is that he does not want to play by the accepted rules of the game and that given a chance he would want to do things that are at tangent with the IMF even against advice from his own officials."
The bank economist, who did not want to be named for professional reasons, said Mugabe's comments were "the clearest sign yet that unless there is a complete change of direction, the total collapse of Zimbabwe's economy will be a reality sooner than most people expect."
Defending his stance to ignore accepted economic principles and conduct, Mugabe said his government had no option but to keep the printing machines running in order to be able to feed hungry Zimbabweans, a quarter of whom require urgent food aid after poor harvests last farming season.
The veteran President, whom critics hold responsible for ruining Zimbabwe's once vibrant economy because of repression and wrong economic policies, castigated his Ministry of Finance for wanting to implement "bookish" economics that he said cannot work in Zimbabwe.
Respected University of Zimbabwe business lecturer, Anthony Hawkins, said Mugabe's utterances would damage investor confidence and help fuel the country's inflation, already among the highest in the world.
Zimbabwe's annual inflation was pegged at 613.2 percent in January from 585.5 percent recorded the previous month and is seen approaching 1 000 percent in the next three months.
"It will also drive up the price of foreign currency especially if that money (being printed by the government) is used to buy foreign currency," Hawkins said.
Zimbabwe is facing a serious shortage of foreign currency, which is blamed for shortages of fuel, food, electricity and agricultural inputs because there is no hard cash to pay foreign suppliers.
Mugabe's televised birthday address comes about two weeks after a team from the IMF completed a mission to Harare, during which they told the Zimbabwean authorities to adopt economic policies that conform to international best practice.
Among its recommendations was the need for the central Reserve Bank of Zimbabwe (RBZ) to discontinue its quasi-fiscal activities that were cited as fuelling money supply growth and high inflation.
The RBZ has been dolling out large sums of money to largely ruling ZANU PF party supporters without proper monitoring strategies in place.
RBZ governor Gideon Gono also shocked the business community last week when he revealed that he had to print Z$21 trillion to purchase the foreign currency that was used to settle Zimbabwe's arrears to the IMF. - ZimOnline
You've described every country where communism has gotten a foothold. Mugabe will be revered by the left, just like Mao, Stalin, and Pol Pot.
Since "bookish economics" don't work for Zimbabwe, will a non-bookish approach work? What about thuggery, racism and murder - will they work? Oh wait, they've already tried that...
Yes, back then it was known as Rhodesia. It was known as "the pearl of southern Africa." When the Brits gave it independence, it was in great shape. But the Marxist thug Mugabe has wreaked hell on his citizens.
So the sooner the 13,000,000 innocent people starve to death because of the insanity of a repressive regime the better? You are one sick dude.
I've never heard that phrase.
I love it and will remember it, and will add it to the basics truths of life:
Time heals all wounds;
Life is for the living;
Every day above ground is a good day.
This is a classic example of socialism and how it works in real life. Why aren't all the universities sending teams to analyze this catastrophe ?
Because they always claim "the right people weren't in charge" to make their utopia work. Isn't it pathetic that they refuse to face reality?
$100 does buy the country but you still need money for matches. Or are there enough muslims there you can just fax over a cartoon to start the blaze ?
I assume you will grant permission to use this bit of wisdom on some of my liberal friends. Great stuff!
Just as long as it's properly attributed. :) The quote is by Ayn Rand.
"While I care because I'm your father, the world doesn't care what you think, and the world doesn't care how you feel. All the the world wants or needs from you is what you can do."
It's taken me a good while to know and realize this. Lots of my friend and family don't know or practice this. The "liberal" world is full of excuses.
You're a good, smart father.
As every good, clumsy carpenter and cabinet maker knows it's "Measure TWICE, then cut".
For me, 3 or 4 times is better.
Zimbabwe could use another 100 years of colonialism. but who would take on the job?
Mugabe will die by being pulled from his palace and torn apart by a mob. I hope he's enjoyed the ride so far, the destination is a bitch
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