Download Hyperinflation in Zimbabwe

Hyperinflation in Zimbabwe
20th Century Timeline
Rhodes' British South Africa
Company (BSA) gains a
British mandate to colonize
what becomes Southern
Rhodesia.
Land Apportionment
Act restricts black
access to land,
forcing many into
wage labor
Zimbabwe declares
independence under
white minority rule,
sparking international
outrage & trade sanctions.
Veteran proindependence leader
Robert Mugabe
win British-supervised
independence
elections.
Mugabe
changes
constitution,
becomes
executive preside
21st Century Timeline
Squatters seize
hundreds of
white-owned
farms in an
ongoing and
violent campaign
to reclaim what
they say was
stolen by settlers
Finance Minister
Simba Makoni
publicly
acknowledges
economic crisis,
saying foreign
reserves have
run out and
warning of
serious food
shortages
State of disaster declared as
worsening food shortages
threaten famine. Government
blames drought, the UN's World
Food Programme says
disruption to agriculture is a
contributing factor.
45-day countdown for white
farmers to leave their land
begins, under terms of a
land-acquisition law passed
in May
5/2006
Year-on-year inflation exceeds
1,000%. New banknotes, with three
[zeros] deleted from their values,
are introduced in August.
9/2006 Riot police disrupt a planned
demonstration against the
government's handling of the economic
crisis. Union leaders are taken into
custody and later hospitalized, allegedly
after being tortured.
Warnings of
power cuts for
up to 20 hours a
day while
electricity is
diverted towards
agriculture.
100-billion-dollar
banknote is
introduced in
response to official
year-on-year
inflation rate of 2
million per cent.
Interest Rates
• Interest rates reached 160%, and the
government refused to devalue the
Zimbabwean dollar. Instead the government
artificially pegged the exchange rate at the
level that the market could not justify.
What’s Next
• Since Zimbabwe can not afford to buy the
paper to print its currency, a severe cash
shortage occurred.
• Mugabe’s opposition brokered a powersharing deal this summer.
Recommendations
-Stop printing money entirely.
-Freeze government spending.
-Lift all price controls.