Zim dollar return too ghastly to contemplate – Vince Musewe

via Zim dollar return too ghastly to contemplate December 5, 2013 by Vince Musewe NewsDay

Never say never,especially with Zanu PF in charge.

There are rumours abound of the imminent return of the Zimbabwe dollar.

As far as I am concerned, that will surely sound the death knell for the Zimbabwean economy as we know it.

But, as I always say, never say never, especially when you have a desperate government that does not have wide choices.

I want to look at three scenarios: The political solution scenario, the Chinese scenario and the Zim dollar scenario.

It is clear that Zanu PF has not earned politically legitimacy from the West and the only way that this can be earned is through a political solution that acknowledges that the July 31 elections were not free and fair and did not reflect the will of the majority of Zimbabweans.

This would mean that all the reforms as stipulated in the Global Political Agreement must be implemented and fresh elections held as soon as possible.

Now that is as good as asking Zanu PF to admit that indeed they rigged the elections and we all know that is not about to happen.

Despite that, this is the only way the Zimbabwe can earn legitimacy and this would lead to normalisation of international relationships leading to economic recovery in the medium term. This is the hardest but the best solution for Zimbabwe.

We then have the Chinese scenario.

Here Zimbabwe mortgages its resources to the Chinese and receives cash from China.

The problem here is that, firstly, that nullifies indigenisation, but, more important, it will result in us selling our national resources for a song.

We must remember that Zimbabwe does not even know the value of the mineral resources it has and in desperation, we are most likely to undervalue what we have.

The Chinese would, of course, take full advantage of this situation, pay us as little as possible and effectively colonise Zimbabwe in the process.

The quantum of funds that can be raised through this solution is very minimal and cannot sustain our needs in the medium term.

The Zim dollar scenario would sees us introducing the Zim dollar.

The problem with this is obvious: There is no confidence that this government can manage its own currency as was the case up to 2008.

Added to this is the emotional baggage that comes with it due to the traumatic experience of Zimbabweans in 2008.

The introduction of the Zimbabwe dollar would wipe out imports, especially food from the shops, as we are importing an estimated 70% of our needs.

There is also no guarantee that it would keep its value and we would be effectively bringing back hyperinflation and would, therefore, wipe out any wealth accumulated since 2009.

It will not revive industry or create new jobs.

This option will reverse any gains that we might have made as a country since 2009 and will actually accelerate poverty.

This Zim dollar option is just too ghastly to contemplate and if any of our politicians are even considering it, they should be arrested.

We are in a good space I think, we all know that the only sustainable solution is a political one. Everything else will be short term and expedient.

The only question is: How long it will take for Zanu PF to realise that without a political solution, they are manufacturing their own demise?

Maybe that’s not a bad thing either?

 

COMMENTS

WORDPRESS: 5
  • comment-avatar
    John Thomas 8 years ago

    Option 1 is the only option. The only question is how much more stupidity we have to go through before we get there, because get there we will.

  • comment-avatar
    Canuck 8 years ago

    Peace with the West MUST be achieved somehow…….the only way.
    Zim $ ?……..what a joke, not after the last fiasco…….
    Chinese?……..be VERY careful…….they did not get where they are today by being pushovers !!!!

  • comment-avatar
    Dayford 8 years ago

    Objective comments from Vince…we are in a quandary as we have Zanu PF leaders who have dug their roots deep in corruption and for as long as they are benefitting, the thought of them letting go is a No No!! You only have to look at Chiyangwa, Chombo, Obert Mpofu to name but a few as examples of flagrant corruption. We can not afford this kind of leadership any longer, The People of Zimbabwe have to work out a formula out of all this in a way which does not do any further damage to this limping economy. No tom the Zim Dollar for now, No to the Chinese, they are there to rob us of our wealth, yes to option 1. Easier said than done.

  • comment-avatar

    Textbook economics. Naive academia. The zimdollars would be brilliant for the nation cos in less than year total zanupf collapse and we have brand new start. There is no political easy way out!!!! No erections or workshops gonna bring zanupf down.Wake up man. A collapsed economy is the panacea. Plenty historical examples. You suffered 34 years. Haven’t you the guts suffer one more year of zimdollars and the inevitable???? If not just stop moaning and prepare ten more years hardship instead of just one.Wake up to hard reality or shut up

  • comment-avatar
    Boss MyAss 8 years ago

    TO HELL