Robert Mugabe has led the nation of Zimbabwe ever since its creation from white controlled Rhodesia. For 37 years, Mugabe (93) has clung ruthlessly to power, turning a once prosperous country into an economic basket case.
Inflation in Zimbabwe makes Western concerns pale into insignificance with hyperinflation in 2008 doubling prices every 24.7 hours, an annual rate of 89.7 x1021, the second highest rate ever recorded. Ultimately, the Zimbabwean Dollar was worthless and the country has since adopted the US Dollar as its currency. According to the authors who calculated the nation’s hyperinflation peak (an implied rate), annual inflation is currently about 243%. The worst hyperinflation in history was experienced by the Weimar Republic.
The political change in Zimbabwe was caused when Mugabe acted to pass control of the country to his wife, Grace, bypassing his long-term associate and vice-president, Emmerson Mnanagagwa who went briefly into exile. The “military coup” saw Mugabe being initially “protected” from criminals surrounding him, then under house arrest, then defiant and finally resigning to be replaced by Mnangagwa of the ruling Zanu-PF party.
The IMF is calling on the “new” regime to make immediate economic reforms according to its Zimbabwe mission chief, Gene Leon. Mr Leon said: "The economic situation in Zimbabwe remains very difficult. Immediate action is critical to reduce the deficit to a sustainable level, accelerate structural reforms, and re-engage with the international community to access much needed financial support". He went on to explain that government spending and the nation’s foreign debt are far too high and that structural reforms are urgently needed. Zimbabwe has defaulted on its international debt, effectively freezing itself out of international money markets.
The malaise of the Zimbabwean economy, which has contracted to half its size since the millennium, has been attributed to Mugabe’s land reforms and expanding the money supply by printing Zimbabwean Dollars (showing what can go wrong with a variant of quantitative easing!).
The fact that Zimbabwe uses US Dollars rather than its own currency, has led to cash shortages in the country. It has effectively been barred from borrowing money on international markets since the debt default in 1999 and urgently needs a cash injection.
It remains to be seen if the new Zanu-PF president will steer a different economic and democratic course than his predecessor.