Wednesday, July 30, 2008

Knocking off zeros won't solve the Mugabe problem

In a truly desperate move to save itself, the government of Zimbabwe is revaluing its essentially worthless currency -- just days after it issued a 100 billion dollar bill (about USD 2) with, get this, an expiry date of December 31st of this year. The central bank has ordered ten zeros knocked off every price. So, for example, that 100 billion dollar bill will now be reissued as a ten dollar bill.

A five-to-one exchange rate is certainly much more manageable but it won't stick for very long. The problem with that country's continuing decline into the abyss can be summed up in two words: Robert Mugabe. He needs to go, after a clearly rigged election -- and merely offering Morgan Tsvangirai the prime ministership with Mugabe remaining as President will not instill confidence in the region.

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