Zim scurrying back towards 2008-9 chaos

HARARE - When Money Destroys Nations: How Hyperinflation Ruined Zimbabwe, How Ordinary People Survived, and Warnings for Nations that Print Money, By Philip Haslam with Russell Lamberti; Cape Town, Portfolio Penguin, 2014.

140 pages

ISBN: 978-0-14-353918-6 (Print)

978-0-14-353163-0 (ePub)

LATELY, Zimbabwe has been plagued by a series of protests, with citizens complaining over the deepening economic crisis whose major cause they have attributed to President Robert Mugabe and Zanu PF’s poor policies, rampant corruption and worsening cash shortages.

Zimbabweans have walked this road before during the 2008-9 hyper-inflation which culminated in the death of the national currency — the Zimbabwe dollar.

Yet this is the same country that exuded so much potential at independence in 1980.

This is summed up in: “Prior to its economic collapse, Zimbabwe was loaded with potential. It had abundant infrastructure and trade was booming. Known as the bread-basket of Africa because of its massive agricultural industry, it brimmed with possibility and opportunity. And yet increasing control by the government, militarisation and unbridled State consumption created a political and economic infection that would lead to the death of the currency and collapse of the economy.” (p12)

In reading through When money Destroys Nations: How Hyperinflation Ruined Zimbabwe, How Ordinary People Survived, and Warnings for Nations that Print Money, I found the book  — published in 2014 when the footprints of hyperinflation were still visible — acquiring a new relevance.

This is especially so at this point when government plans to introduce the loathed bond notes are at an advanced stage.

For many, the introduction of the bond note is effectively bringing back the Zimbabwe dollar, albeit through the back door.

Very few have forgotten what happened to their life savings in 2008.

Again, very few have forgotten the trauma of carrying loads and loads of cash to purchase virtually nothing.

At that juncture the Zimbabwe economy taught many basic lessons, but principally that it rewarded those that did not work.

Many could make instant millions standing under tree shades and shop pavements in urban areas while those who sweated it out in industry or any other such formal employment would struggle to access the few dollars they would have worked for all month.

Banks had imposed withdrawal limits and bank queues had become the order of the day then.

Little wonder why Zimbabweans panicked on hearing that the central bank had ordered banks to impose withdrawal limits for their clients.

Perhaps for those whose memories are weak, Haslam’s book serves to jog them into quickly remembering those bad days.

The dedication page is quite clear: “To the millions of Zimbabweans who survived hyperinflation, May this book do justice to the hardships you had to endure.”

In a way, the book will do some justice by explaining what went wrong although it does not do anything to make them recover the billions they lost in the confusion of the time.

The author makes his account lively by giving the rendition characters who include Haslam himself.

“In researching Zimbabwe’s tragic story, I interviewed people from every sector of society. I met with senior central bank officials. Business leaders imparted their strategies. Farmers spoke about their heartache and pensioners told me their desperate stories . . . their personal stories of hardship, resilience and ingenuity are heartbreaking and inspiring.” (p2)

Money printing, Haslam argues, is something that has happened in major economies of the world.

One interesting feature of Zimbabwe — its distinct contradictions — does not escape Haslam’s keen eye.

“Indeed, Zimbabwe is a land of contradiction. Its high peaks are contrasted with low valleys. Peaceful communities are juxtaposed with rogue leaders. Despair alongside hope, and faith alongside suffering. It carries lessons borne out of simple but costly errors — for the world.” (p10)

Zimbabwe was borne out of a 15-year liberation struggle in which the intransigent supremacist Rhodesia regime would not let go, despite several other colonies on the continent getting their independence.

At independence, the potential the country possessed invited praises from all over the world.

However, “ . . . beneath the surface the Mugabe administration began to make unwise economic decisions and, slowly but surely, centralised power around itself and its leader . . . gave the State increased hunger for spending money, and the State’s consumption habit grew, corroding Zimbabwe’s dynamism. This was the start of a dangerous economic disease that untimely devastated the Zimbabwe dollar and collapsed the economy . . .” (p11) 

The 14-chapter book gives experiences of money printing in Zimbabwe and beyond, affording readers the opportunity to judge for themselves.

The Zimbabwean reader is tasked with coming up with their own deductions concerning the pertinent issues that could affect them.

With the background of “Beautiful Zimbabwe treated in Chapter 2, the reader’s conclusions become very interesting given what citizens of this country went through between 2008 and 2009.

Fears of a total government shutdown, treated historically in Chapter 8, are growing by the day with Zimbabweans unfurling more and more protests, especially now that the courts have okayed them.

Like the foreword says: “The penultimate section presents a compelling, if contentious, thesis to the effect that the Zimbabwe tragedy might be a portent of things top come elsewhere . . . Having alerted the readers to the economic crises that might lie ahead, the book ends on a positive note with ideas on what individuals and governments can do to avoid or ameliorate hyperinflation.” (p.ix)

Probably the most intriguing issue is that Zimbabwe’s plans to introduce the “promissory” bond note to mitigate the current shortages of cash.

The kind of trust government is courting for the success of the programme hinges on past experience with bearer cheques — an intervention which turned citizens into impoverished, desperate trillionaires with eroded dignities.

Haslam is a qualified chartered accountant and economic adviser, writer and speaker.

As a speaker, he regularly presents to a variety of audiences on money, banking and the international financial system.

Philip has lived in both Europe and America, and currently resides in his hometown of Johannesburg.

Haslam’s book remains a must-read for political economy scholars and all those with Zimbabwe’s future at heart.


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