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Associated Press/Photo by Tsvangirayi Mukwazhi

Out to dry

Zimbabwe | With hyperinflation and election violence a (recent) memory, Zimbabwe's Robert Mugabe strengthens his grip ahead of coming elections despite a stalled comeback

Issue: "Biblical callings," Dec. 4, 2010

Thomas Jefferson, we know you're there somewhere. The third U.S. president is visible only as a smudge on most two-dollar bills in circulation here, a victim of mass overuse in Zimbabwe's cash-only economy. Quaint as a $2 bill? Maybe in the United States, but here in sub-Saharan Africa $2 minted by the U.S. Treasury is sought after. "Don't you have a two?" bemoaned Amelia, a flea-market vendor in Harare upset that I tried to pay for purchases with a new $5 bill.

Two dollars will buy a loaf of bread in Zimbabwe-the highest price in southern Africa but less than just over 18 months ago. Then a loaf of bread went for 1 billion Zimbabwean dollars.

That's when government leaders, to cope with 18 months of stratospheric inflation that reached 90 sextillion percent (that's 90 with 20 zeroes after it), declared their currency dead and adopted a "multi-currency" system-in which U.S. dollars, South African rands, or British pounds are formally accepted for all transactions. For now, it's the almighty dollar that rules. What few are in circulation become so soiled, in fact, that they are regularly washed and hung on clotheslines alongside the day's laundry.

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Outsiders assumed that the 2009 dollarization solved Zimbabwe's economic problems while the formation of a unity government mended its political crisis. Both are far from true. And as the unity government's two-year mandate draws to an end and the country prepares for elections in 2011, many Zimbabweans fear a return to the violence and hardship from which they have only just begun to recover.

Gone may be the days when it took box loads of Zimbabwean dollars to buy groceries. But along with overseas currency have come mostly overseas prices. Things like school fees, appliances, and real estate have in some cases gone up tenfold. Grocery stores are stocked-unlike during the height of the African nation's 2008 crisis when shelves were bare for over a year-but the price for a box of cereal rivals what American shoppers pay. Zimbabweans are increasingly reliant on imports, which are expensive, and on government control of the money supply, which is tight. And jobs, unlike food items, have not come back: Zimbabwe has the highest unemployment rate of any ranked country in the world-at a reported 95 percent.

Neither has liquidity returned. Want to buy a home in Harare? Be prepared to pay 15 percent interest on a mortgage, and to pay off the loan within two years. "We're lucky to get 12-15 month money for commercial loans," said a banker who asked not to be named because she feared the risk to her employer. "And no one can make a business start with that."

Local business startups and overseas investment are further hampered by controversial rules imposed by President Robert Mugabe's ZANU PF regime, which came to power in 1980 and has ruled by force nearly ever since: The state insists on at least 51 percent indigenous ownership by black Africans of all businesses. That's chased off foreign investors like Caterpillar and others who once operated mechanical, textile, and agricultural factories outside Harare. For a country with abundant natural and industrial resources, and with an average literacy rate of over 90 percent, economic rebound is awaited but slow to come, particularly as foreign debt arrears mounts-to over $7 billion.

The lesson of the hyperinflation crisis in 2007-2008 at all levels (and for other nations courting inflationary policies) was "if you have money, by all means spend it, and quickly." At that time, recalled Itai Gurira, "The money that you got paid at the end of the month was not enough to pay for transportation for one week. Inflation was so bad that people's salaries got to be not enough to pay bus fare for one day." People lost the incentive to work and learned instead to barter their way through life or turn to "suspect ways of living," he said.

The corruption that for decades has typified Mugabe's­ government now permeates the street: Illegal cabs and vendors make havoc as they haggle for business on Harare's roadsides. Drivers rarely stop for traffic lights, especially at night, because they fear robbery or carjacking. Rolling up the windows and locking the doors isn't a remedy: Even by daylight thugs are known to smash car windows using bricks, grab whatever's inside the car, and run.

The city's deterioration is especially tragic given that Harare (known as Salisbury in then-Rhodesia) was one of the loveliest cities in sub-Saharan Africa and that the country at its independence in 1965 managed a diversified economy with advanced infrastructure and finance. The p­rotracted struggle from white minority to black majority government ended in 1980 when Mugabe's Zimbabwe African National Union-Patriotic Front (ZANU PF) took power.

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