14 April 2009
Harare — The demise of Zimbabwe's local currency, the Zimbabwe dollar, and the reappearance of goods on the recently barren shop shelves is an equation that ensures the status quo: ordinary people are unable to feed themselves.
Foreign currency, whether US dollars, South African rands or Botswana pula, is the price paid for stocked shops, but at the Domboshava shopping centre, a rural outpost about 40km northeast of the capital, Harare, there are few customers.
Tendai Shava moves from shelf to shelf admiring the goods, mostly imported from neighbouring South Africa, holding a soiled R20 note (worth about US$2) as she weighs her options.
"I need to buy cooking oil and sugar but I do not have enough money; I only have enough money to buy sugar or cooking oil. I have no idea where the government thinks we ordinary people in rural areas can get foreign currency, since all goods are now sold using this money from South Africa and America." In the end, she settles on cooking oil and shuffles from the shop.
Next door there is a small store selling a variety of goods, but the two assistants spend their time playing board games. "The use of foreign currencies as legal tender has really affected the local people because they have no access to foreign currency," one of the assistants, Dudzai, told IRIN. "Where does the government expect the villagers to get foreign money when it is battling to pay its own civil servants?"
The use of foreign currencies as legal tender has really affected the local people because they have no access to foreign currency
Zimbabwe's unity government has suspended the use of the local currency for a year, but its death knell was sounded long before with an inflation rate estimated at trillions of percent ensuring its demise.
The Zimbabwe dollar became a symbol of President Robert Mugabe's rule: an ailing economy, unemployment estimated at 94 percent, collapsed infrastructure and social services, and more than half the 12 million population relying on emergency food aid.
The official sanctioning of foreign currency meant the Zimbabwe dollar was on borrowed time, but now an even older method of determining the value of goods and services is fast becoming the favoured currency in rural areas.
The barter economy
"What we have experienced over the last few months is an increase in barter trade. For example, a villager with many goats can swap a goat in exchange for several packets of sugar and salt or any other commodities that they may need," Dudzai said.
But the practice of bartering in rural communities is being undermined by those with access to foreign currency. "The biggest culprits are people from urban areas, who are exploiting the rural farmers by paying them very little foreign currency for grain and livestock," she said.
The economics minister in the new unity government, Elton Mangoma, noted while announcing the suspension of the local currency: "The Zimbabwe dollar will be out for at least a year. We resolved that there will be no immediate plans to introduce the money because there is nothing to support and hold its value."
In Harare's affluent suburbs, access to US dollars and South African rands have brought supermarkets that stay open for 24 hours to serve meandering queues of shoppers, mainly NGOs and government employees.
"Some of our regular clients spend as much as US$300 on their weekly shopping trips and they don't seem to worry about how much they spend," a supervisor at one of the Harare supermarkets told IRIN.
Wellington Chibhebhe, secretary-general of the Zimbabwe Congress of Trade Unions, told IRIN the union federation was demanding that all workers be paid a Poverty Datum Line (PDL) wage of US$454 a month.
As part of the unity government's attempts to resuscitate the economy, public servants are paid a monthly wage of US$100, or its equivalent in vouchers. "We campaigned to have all employers, including the government, pay workers in foreign currency, and now we want them to peg salaries against the PDL," he said.
"Through our campaigns, pensions will now be paid in foreign currency. We are aware that for the non-working rural citizens, it is taking long for foreign currency to trickle down to them. The fact of the matter is that under the current slave wages, people are scrounging for food in both rural and urban areas."
[ This report does not necessarily reflect the views of the United Nations ]
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The reason the shops have any stock on the shelves is because so few people have access to fex. If there were enough fex for all, the shops' shelves would be just as empty as those that accept Zim dollars, and for the same reason: because everybody has piles of Zim dollars.
There are only two possible solutions to this: either the people must re-learn how to produce things for themselves, and in the process destroy the socialist bureaucracy that doesn't understand how the world really works when it's not written on paper; or a minimum of 12 million Zimbabweans must die, for the sake of creating a sustainable socialist economy.
Ragtime, Shops Having stock is a very positive development in Zimbabwe, even though the takers are few. The results is that inflation in Zimbabwe is going down! Eventually the prizes will go down as well. Most prices in Zimbabwe are based on the fact that those goods cannot be found in Zim. Now, that the goods are in, it makes sense that the prices will also starting going down. No more excessive trips to Botswana or South Africa. This is just the first step, goods are available in the stores, second is price reducation and how Zimbabweans will be able to aford. Zimbabweans in diaspora are sending money to their relates in Zimbabwe, who in turn will be buying in Zimbabwe, as oppossed to driving to Botswana. It is easy to try and create a prediction of gloom, when in fact this is good news!!!
Ragtimer , you are right. Either everyone must be paid in forex or like you say start producing again. We all know who has put the country in this position. Foriegn aid must be in the form of sorting out the electric supply, water supply, transport, health and education. Never ever give money, that will go into the elites back pocket. Targetted aid is the only answer.
It's unfortunate that actually explaining how economies work just makes people angry, while reducing the complexity of an economic system to simple but false slogans like "the money just goes into the elites' back pocket" is the only thing that seems to convince people to change their habits.
The biggest problem with the entire world today is that everyone is acting on what they believe, rather than on what they can prove. All the world powers were built by people who constructed them based on hard scientific facts, and are today being torn down by people who think belief and superstition are superior to science.
Ragtimer, it is also very easy to sit at your desk and postulate economic policies. That's what you are doing now. Just talking as if you have the answer to Zimbabwean problems. Before this mess in Zimbabwe, all sorts of experts were in Zim, including the IMF, World Bank, UK economist etc and in the end they failed to address the issues and economics in Zimbabwe. That led to land invasions and other things. Tone down your "self-righteousness" on this blog, it is way too easy to claim you know economics on this blog. Vooddoo economics has been practised in the first world countries as well. An example of that is the current fiscal problems with bank failures in the UK, Sweden, Japan and the USA. No easy answer for Zimbabwe
And your point is? Would it be better to fill the forum with the nonsense of Richardson88/Jallohlaw, or the outright lies of Chokora, just because they tell you the things you want to hear? The real root cause of the land invasions, and all of Africa's problems, really, is that the people have only listened to what they want to hear for far to long, and completely ignored the things they NEED to hear.
Maybe if you listened less to the people who flatter you, and more to the people who insult you, you would not keep failing at everything you attempt.
Ragtimer, your points make a lot of sense. Apart from the many reasons you have all already stated that are contributing to goods not moving from the shelves, perhaps it is because there is no buying power as Zimbabwe has such a high unemployment rate and not all citizens having access to the foreign currencies now being adopted such as the US dollar, the rand and the pula. Those who live far from the cities must feel the most pinch as it must be harder for them to lay their hands on these currencies.
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