Inflation in Zimbabwe over 1 million percent

The state Rent Board, where unfair or inflated rental hikes are reported, has had no working telephones for several months, a telephone operator at the Ministry of Housing said.

In the economic meltdown, manufacturing industries, running at below 30 percent of their capacity, reported growing absenteeism by workers facing soaring commuter bus fares.

Economic analysts say unless the rate of inflation slows annual inflation will likely reach 5 million percent by October.

Zimbabwe’s official annual inflation was given by the government as 165,000 percent in February, already by far the world’s highest. The government has not updated that — the state statistical service has said there were not enough goods in the shortages-stricken shops to calculate new figures.

“The crunch is going to come when local money is eroded to the point it is no longer acceptable” in commercial activities or as earnings, especially by longtime ruler Mugabe’s loyalists, said independent Harare economist John Robertson.

Already, more transactions are being done in U.S. dollars, both openly and in secret.

Robertson said sectors of the economy — phone services, the supply chain, maintenance of equipment or manufacturing — may collapse one at a time, but a country continues to exist even in chaos.

“In the end, a country must fall into line with international financial standards to balance its books” as experience in once-inflationary Latin American countries has shown, he said.

He said that meant re-engaging with international financial institutions, lenders, donors and investors dominated globally by Western countries, the main source of hard currency.

Mugabe accuses the United States, the European Union and especially former colonial ruler Britain of using their economic influence to back his opponents and bring about his ouster.

He has severed ties with the International Monetary Fund, the World Bank and other financial organizations. But Mugabe’s “Look East” policy to attract trade and investment from China and Asia has yielded a fraction of what is needed to halt inflation.

In the fastest shrinking economy outside a conventional war zone, much of the nation’s crucial savings have been used up in government borrowing and spending without corresponding productive income.

“It is as though a starving man has eaten his left foot and starts eating his right foot to survive in the short term,” Robertson said.

Zimbabwe’s economic decline has been blamed on the collapse of the key agriculture sector following the seizures, often violent and at Mugabe’s orders, of farmland from whites. Mugabe claimed the seizures begun in 2002 were to benefit poor blacks, but many of the farms went to his loyalists.

(Associated Press)

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