I was looking at this photo essay from Foreign Policy magazine this morning, and one photo struck me in particular. It essentially was someone packing a briefcase full of cash. As I mentioned yesterday, with inflation running at over 100,000 percent, Zimbabwe's rate of inflation is currently the highest in the world.
Now, like most I suspect, I'm struggling to get my head around what that means, and its broader implications for people. Using a couple of different online currency convertors, ZWD$1 million fetches roughly:
- AUS $37 or
- US $34 or
- Euro €21.
Now this is achieved using flat currency transaction on market rate. In the real world, Zimbabweans would have to take whatever the black marketers are offering. The scantest of research reveals that the best that they might hope for out of that same ZWD $1 million is somewhere between US $3 to US $5.
To be totally honest with you, I still can't get my head around it. Surely wages cannot keep up with that sort of inflation. I have visions of a Zimbabwean Nursing Federation vehemently arguing for a 200,000 percent pay rise to be phased in over two weeks! Yet there can be no way that practical responses are able to be made in that environment. Does the state just shift to printing larger denominations in currency? Is there a million dollar note? What do you do with all of the one, two or five dollar notes? The coins? Do people even bother with 'hard' currency anyway? Surely a goat is worth more than a million dollars, because the goat is still a goat in the afternoon, whereas the million may only be worth half a million. I would imagine that the very notion of 'hard currency' disappears.
The only assumption that I can make is that the entire system breaks down, and I suspect that this has happened in Zimbabwe. Having lived my whole life in Australia, where we have been fortunate enough to avoid such breakdown, I'd be interested to hear if anyone has a tale that might allow me to get my head around the implications of runaway inflation.
I've included a couple of links here that might be interesting to anyone who might like to read about Zimbabwe by Zimbabweans. The first is This is Zimbabwe, and the second is Zimbabwe Metro. Both a worth a look.
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Thanks for visiting the Guelph blog. As to how to pronounce it, if you think of Santa's "elf's" and then put a "GW" in front of "elf".
Hope this helps! :)
Pat
Guelph Daily Photo, My Photos.