In addition to the daily power cuts, we have hyper-inflation here in Zimbabwe at the present time. The inflation rate in the States is probably about 3-5%. Here the official rate here is 2,000%, but it's probably more like 14,000 to 19,000%. I did not make a typing error! There is no way to explain what this means for daily life unless you are here to experience it.
When I arrived on May 7, the street exchange rate for the US dollar was $37,000 Zim to $1.00US. Yesterday, it was $200,000 to $1.00. What does that mean? It means that people are so desperate to dump their Zim dollars that they keep driving up the "price" to obtain real currency so they can transact business or feed their family. Of course, it is illegal to trade Zim dollars for US through anything except official government channels, and I and my friends would never think of doing anything but what is legal. Rumor has it, however, that even the reserve bank is on the "street" bidding up the price of foreign currency with useless Zim dollars to get their hands on that precious and scarce foreign currency.
While fuel is available right now, it is approaching $8.00US per gallon! What does that mean? It means that the exchange rate isn't keeping up with inflation. The Zim to US dollar exchange isn't keeping pace with the hyper-inflationary daily price increases on the basic necessities of life. I got a quote recently on a handmade briefcase. One Friday the quote was $5 million Zim; the next Friday the quote was $6 million. Most price quotes are good only for the day they are given and then change the next day.
I ate out the other night and spent $1.76 million Zim at a local restaurant. How much was that in US dollars? It's hard to say. On that day, it was probably about $12US. Two days later, it was $8.50US.
How do the people cope? First, they carry around huge parcels of money, since the largest bill right now is $100,000. Then they scrape, watch, adapt, swap and keep on smiling. Yet the pressure is intense and many leave permanently or look for some break from the intensity of living here.
What is the answer? I have no idea! I have a masters degree in economics, but they never prepared us for a scenario like this.
I have heard that no country in history has had inflation of 1,000% or more for six consecutive months without something happening to break the cycle. This has been going on for one year and it has defied all the experts and their predictions. There is no end in sight.
When I was in Cuba years ago, I never saw a peso -- only US dollars. I would think we are headed for the same thing here. If someone has US dollars, pounds or South African rand, they will be able to live. If not, then they will suffer with their Zim dollars, just like the Cubans suffered who had only pesos. The unofficial economy has and will become the official economy here and there is nothing anyone can do about it.
These are fascinating times and I am learning so much as I watch history unfold here. My commitment to Zimbabwe and its people are firm, and I watch and pray for answers that will unlock these unprecedented challenges. When this turns around, and it has to turn eventually, we will then be faced with a whole new set of challenges to bring stability and peace. Perhaps it is for such a time that I am here. God's will be done and may He have mercy on the people here as they seek to build and restore their nation.
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