We often complain about the effect of government interference on our lives, but spare a thought for those less fortunate than ourselves.
The people of Zimbabwe are under the heel of one of the most autocratic and incompetent governments in the world. Top of the list of catastrophic mistakes made by the Mugabe government is its handling of the economy. Price increases ran at an annual rate of 4,500 percent in May of this year and the hyper-inflationary spiral shows no sign of stopping.
The route cause of the inflation is the take-over of white owned farms by the government in 2000. Experienced farmers were unceremoniously kicked off their land (in many cases at gun-point) and replaced with groups of "War Veterans." The results were predictably disastrous. The new land-owners knew nothing about farming and combined with a difficult growing season, productivity collapsed. The country's economy, which had depended heavily on farming, went into free-fall.
Having launched an attack on property rights, the government went after another plank of capitalism, financial stability. They started to print money in order to pay for wage hikes for the police and military. These two things together caused an immediate collapse of the value of the currency on international markets, meaning more money had to be printed to pay for foreign debts and to import the food they now needed. Needless to say, inflation is now out of control.
The government has come up with more and more bizarre solutions as the crisis has escalated. In February they made inflation illegal. It was simply against the law to increase prices. The latest move was to introduce price controls, accusing shop owners of causing the problems by being greedy and ordering the to cut food prices by 50 percent. This meant supermarkets now had to sell food at less than the cost they were paying the wholesalers. Needless to say, neither of these things worked.
So what makes Zimbabwe so especially tragic? Put simply, there is no good reason, none, why Zimbabwe should be in such a mess. All of the pieces were there 10 years ago. Elections, natural resources, education and so on. Constant meddling by the government has destroyed what was one of the strongest economies in Africa. It's hard to see where to go from here, but Robert Mugbe cannot possibly be part of the solution.
(From the Adam Smith blog)
3 comments:
Autocratic and incompetent seems very generours for Mugabe's regime.
Wouldn't murderous and corrupt fit better?
The situation in Zimbabwe is nearing the stage where the UN should move in on humanitarian grounds, that is if it could ever reach agreement on such action [with the 3rd World voting against the proposal no doubt].
It is amazing that the African Union has made no efforts to mitigate the situation.
So just another African basket case I guess, together with Dafur, Somalia, Sierra Leone and Liberia.
The Maori Party weren't in a hurry to criticize Mugabe....??
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