What do we know about Zimbabwe and its economy? When we think about Zimbabwe, we recall the only term – hyperinflation. Zimbabwean inflation is so solid that the central bank of Zimbabwe had to make a 100 billion dollar note. As a result, Zimbabwe suffers from the strongest inflation in the world. There is hardly a country that can compete with it. Thus, many economists have become interested in the economy of Zimbabwe. They want to understand the major cause of this problem. We know that the weak economic condition of Zimbabwe is unnatural and probably artificial. This country is very rich regarding its resources and potential. However, the unskillful government of the current president Robert Mugabe cannot take advantage of the potential of his country. Unluckily, Zimbabwe is among the poorest countries in the world. Let us try to understand why.
Zimbabwe was a very powerful civilization between the 8th and 15th centuries AD. However, we know very little about the economy of that time. When we look at the 17th century, we will see that the majority of people in Zimbabwe, South Africa and other countries did not live in cities or common villages. They lived in the so-called tribes and fed themselves with the help of hunting and gathering. Therefore, it is impossible to speak about any economic flourishing at that time. The 18th century is characterized with the attempt of the creation of a powerful kingdom. In fact, this project was ruined by the growing interest of Europe in Zimbabwe. More and more white invaders came to Zimbabwe in order to settle down there. This land was attractive to them. The local people could not resist the power of the British pressure. What attracted Europeans in Zimbabwe? To begin with, it is land. European farmers moved from Europe to seize vast territories and develop agriculture there. Secondly, it is mining. When Europeans understood that Zimbabwe and surrounding countries are rich in platinum, gold and diamonds, they made it their colony. Thus, agriculture and mining had been the major fields of Zimbabwean economy by the middle of the 20th century.
If we speak about the period of Southern Rhodesia, we should say that the economy was based on production of chrome and tobacco. Unfortunately, the white population was privileged in Zimbabwe. They received land and rights while the rights of the black population were severely limited. They did not have land and equal opportunities in employment. However, the period of Rhodesian rule was useful for the economy of Zimbabwe. The country transformed from the agricultural state into one of the richest industrial giants. Due to the high level of development of the mining industry, the state possessed its own stable currency and experienced gradual economic growth. The rates of social inequality decreased and more and more people could take advantage of education and healthcare.
However, the situation changed cardinally in 1980s. Zimbabwe became an independent state on 18th April 1980. Robert Mugabe became Prime Minister. Later on, he became President in 1987. This personality is quite scandalous whereas his government exists primarily on foreign financial aid. Robert Mugabe is an authoritarian leader who conducts nationalistic policy. He planned to build socialism in Zimbabwe and criticized ‘Western lifestyle’. He began to persecute the white farmers and demonstrated his firm anti-American position. Zimbabwe was no longer a market economy whereas Mugabe chose another way of development. No wonder, the country was supported by the USSR and other socialist states. It received foreign financial aid that supported the rapid economic fall. After the collapse of the USSR the amount of aid reduced considerably. Zimbabwe remained without international support and its economy fell down to the current level.
The new president supported the policy of the total control of economy by the state. He believed that all companies, plants and factories should be nationalized. Private sector was persecuted and treated like a harmful element for economy. In 2000s 4000 white farmers were evicted from their lands. The government believed that their activity caused harm to the state. However, these households were prosperous and brought solid income into the budget. Eviction caused the further economic reduction and inflation.
Nationalized firms were supported by the state. Without doubt, these unproductive companies consumed money and gave nothing to the state. What is more, the corruptive government stole money while donating into nationalized business. No one can control the circulation of money in a nationalized company. Therefore, money is stolen from the budget and no one can accuse anybody of doing something illegal. The only victim is the people. The main idea of the rule of Robert Mugabe was to redistribute wealth from the white to the black population with the help of the means of the government-controlled economy. Doubtless, this plan could not be successful whereas the modern world lives according to the rules of the fair competition and market economy. Social instability and dictatorship of Mugabe frightened all potential foreign investors.
No one wants to invent into the unstable economy. Thus, this instability and inequality determines the current financial condition of Zimbabwe.
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COMMENTS
ERROR – line 3 – Zimbabwe issued the 100 TRILLION dollar note ( after of course the 100 BILLION notes became valueless ) – Gideon Gono – Doctor – from University of Zimbabwe was Governor of the Central bank at the time. Gideon, before becoming a Doctor and Central bank Governor was a tea boy – his own words !
Please check facts before committing to writing whoever the author is – what else might be wrong
One could make this essay shorter. “In 1980 Mugabe took over what was said by Julius Nyerere as a fantastic country and destroyed its people and economy and cast it’s people into slavery in the diaspora just as a true slave trader will do, therefore Zimbabwe’s economy could arguably be said to operate on the slave trade”
The hyperinflation was a direct result of the exiled diasporans sending hard currency back to their family and it being stolen by the regime in exchange for worthless paper. If that’s not slavery then what is?
Yup, Slave trader or vote rigger… pick your poison. Result is the same. Cut throats they are.
Dear Zimbabweans, It is not as simple as this essay. We all played and continue to play our part in the destruction of our economy. First Zimbabwean are agricultural and miners from time immemorial. Before 1900, we lived under autocratic kingdoms where only the physically fit would survive.
After the world 2 wars we were invaded by the North who plundered other peoples resources to build their war tone economies. In the process we received formal education which transformed some major aspects of our human development. We chose what to change but left a lot unchanged. I can name a long list of what else to CORRECTnot just as Zimbabweans but as Africans with 30 countries including Zimbabwe, who are extremely poor.
First we have to open our minds to the fact that Zimbabwe can not survive as an island. The economies of some 200 countries are interlinked. There are some basic acceptable norms, behaviours, unwritten rules and regulations which we have to conform or we perish. We can’t continue to behave like BARBARIANS and hope to trade.
Do we LOVE our country or continent enough to build it? As I see it NO. We have to learn how to love ourselves in order to learn how to UNITE and in a nice way connect with other nations, make friends, build TRUST and exchange goods and services then build our economy. BOND notes destroy trust.
The most successful countries are very good at working and
defending their national INTERESTS. We should learn to do the same. Conflicts whether political etc are a part of living. We must learn conflict resolution to move our nation/continent forward. Unresolved perpetual conficts weaken internal structures and thus eat into our economy.
Honesty and integrity are ingredients we should have so that when good policies are agreed on and laid out, we all abide by them.The economy of our beautiful Zimbabwe and African continent is being bled by both private and public persons largely from within, among ourselves, with the help of outsiders they recruit. This is common knowledge. The ethical core of our nations is rotting away. We are all to blame. No one can fix this except OURSELVES.
Let us strengthen the structures to effectively deal with this by increasing forensic audits throughout and especially in the public sector, strengthen the judiciary, punish perpetrators and recover national stolen assets from ALL THIEVES. Let people freely choose their politicians. This is possible if the VOTE is secured and proctected. The basics are that, in politics you can not lead a population that does not support you. How?
I hope we all come out of our comfort zones, look at our country and continent with fresh eyes. See the wrongs we are inflicting onto the population and CORRECT. VaChihera: Professor
Oh, very good, Mister Proffesor, Sir.
If I read you correctly, “There are some basic acceptable norms, behaviours, unwritten rules and regulations which we have to conform or we perish. We can’t continue to behave like BARBARIANS and hope to trade.”
Now, get Mugabe and company (zanupf) to understand that. Based on public comments from those within the elite of that cadre, to get them to understand, agree, and comply requires a complete reversal of their mindset. You’d as well try to convince the Devil to have compassion. In other words, it ain’t gonna happen.
So, using your logic, the only way to not perish is to get rid of Mugabe and zanupf… and hope their successors bring the changes you specify and replace the savagery with civility. Then Zim will not perish, hope will return, and recovery can begin.
That’s my take.
Unless we start with honesty in our voting system. Now, as you know, we are rigged right from birth as a nation. If RGM’s dictatorship and rigging was directed at forcing the nation to be productive and beat China, we could be very far now. Everything else follows. Unless you have the right head, where the brains lie, do not expect the legs to outwit the brain.
And thus, everything revolves around the “mindset”. Mugabe’s mindset…because he has systematically given himself all the powers of state, with the support of the uniformed forces, who get stipends for their continued backing, while the “in-chief” plunders using simple and sophisticated methods that most of those in the uniformed forces do not even have capacity to read.
These idiots from harare destroyed our beloved country and they are still continuing to do so mxxx.