Opinion / Columnist
'We are not USA must use Z$' argue Professor Chakravarti - no common sense nor integrity, must shut up
27 Jun 2019 at 21:31hrs | Views
"Ever since we dollarised, everybody has been benchmarking against the US dollars," said Zimbabwe economics lecturer Professor Ashok Chakravarti.
"We are not the United States of America, we are Zimbabwe. We need to start thinking in terms of our local currency, our costs are local costs; we pay our workers in local money, all our costs of production are in local money."
Ever since we dollarized the US$, British £, SA Rand and Botswana Pula plus all the local currencies were all legal tender. People chose to price their goods and services in US$ for the simple reason that it was the currency most commonly used, most stable and guaranteed to maximize their profits. They paid as much of their cost as they could in local currency because it was the weakest currency they had and were only too keen to get rid of and where cost such as salary was not linked to US$, this helped maximize their own profit! This is common sense and one does not need a degree in economic to understand this!
Professor Chakravarti, Zimbabwe scrapped its local currency, Z$, in November 2008 because it was worthless with inflation peaking at a record 500 billion %. Inflating has been surging upward with monthly inflation rate rising from 5% in January to 80% last Friday. Again, one does not need a degree in economics to know that government should have left no stone unturned to make sure inflation never rose above 10%, especially with the experience of the 2008 still fresh in all our minds.
With inflation at 80% it is obvious why the people were getting rid of their local currency as quickly as possible. Who would ever want to hang on to a currency that will lose half its value every six weeks!
It is the government of the day's duty and responsibility to implement economic policies to guarantee economic prosperity and stability including a stable local currency. This Zanu PF regime has clearly failed in this. To banish the use of foreign currency at a time the local currency is losing its value was a very sinister ploy to force people to use the local currency. The regime is punishing the people for its own failure.
The effect of forcing people to trade in a currency they have no confidence in will be a significant fall in economic activity across the board. There will be return of the 2008 with empty shop shelves and shortages of everything. There were shortages and human suffering before the trade in forex was introduced but things will get even worse not better.
The banning of the use of the foreign currency at a time when monthly inflation is already 80% and rising was just another foolish blunder by this illegitimate and incompetent Zanu PF regime. We should never forget that Zanu PF rigged last year's elections and even the party's main partner in this treasonous crime, MDC A, has now public admitted the elections were illegal.
"Legitimacy is an issue - last year's elections were illegal, and not free and fair. All reasonable observers concede that," admitted David Coltart, Treasurer General of MDC A, finally.
The only way to end this political and economic mess is for Zanu PF to step down so the country can finally implement the democratic reforms necessary for free, fair and credible elections. There is no other way out!
"We need to start thinking in terms of our local currency!" No, we need to start thinking of going our people hope in a stable and prosperous Zimbabwe and giving them a stable currency is a key requirement. If the government of the day cannot give the people a stable local currency because the regime cannot resist the edge to print money then the country must use foreign currency the regime will not print and fuel inflation.
Zimbabwe is in this economic and political mess because the country has had the great misfortune of having professionals cheering and applauding those in power and authority even when what they are doing something defies common sense much less established professional norms. Zimbabwe needs professions with moral and professional integrity who will speak truth to power or else shut up.
"We are not the United States of America, we are Zimbabwe. We need to start thinking in terms of our local currency, our costs are local costs; we pay our workers in local money, all our costs of production are in local money."
Ever since we dollarized the US$, British £, SA Rand and Botswana Pula plus all the local currencies were all legal tender. People chose to price their goods and services in US$ for the simple reason that it was the currency most commonly used, most stable and guaranteed to maximize their profits. They paid as much of their cost as they could in local currency because it was the weakest currency they had and were only too keen to get rid of and where cost such as salary was not linked to US$, this helped maximize their own profit! This is common sense and one does not need a degree in economic to understand this!
Professor Chakravarti, Zimbabwe scrapped its local currency, Z$, in November 2008 because it was worthless with inflation peaking at a record 500 billion %. Inflating has been surging upward with monthly inflation rate rising from 5% in January to 80% last Friday. Again, one does not need a degree in economics to know that government should have left no stone unturned to make sure inflation never rose above 10%, especially with the experience of the 2008 still fresh in all our minds.
With inflation at 80% it is obvious why the people were getting rid of their local currency as quickly as possible. Who would ever want to hang on to a currency that will lose half its value every six weeks!
It is the government of the day's duty and responsibility to implement economic policies to guarantee economic prosperity and stability including a stable local currency. This Zanu PF regime has clearly failed in this. To banish the use of foreign currency at a time the local currency is losing its value was a very sinister ploy to force people to use the local currency. The regime is punishing the people for its own failure.
The effect of forcing people to trade in a currency they have no confidence in will be a significant fall in economic activity across the board. There will be return of the 2008 with empty shop shelves and shortages of everything. There were shortages and human suffering before the trade in forex was introduced but things will get even worse not better.
The banning of the use of the foreign currency at a time when monthly inflation is already 80% and rising was just another foolish blunder by this illegitimate and incompetent Zanu PF regime. We should never forget that Zanu PF rigged last year's elections and even the party's main partner in this treasonous crime, MDC A, has now public admitted the elections were illegal.
"Legitimacy is an issue - last year's elections were illegal, and not free and fair. All reasonable observers concede that," admitted David Coltart, Treasurer General of MDC A, finally.
The only way to end this political and economic mess is for Zanu PF to step down so the country can finally implement the democratic reforms necessary for free, fair and credible elections. There is no other way out!
"We need to start thinking in terms of our local currency!" No, we need to start thinking of going our people hope in a stable and prosperous Zimbabwe and giving them a stable currency is a key requirement. If the government of the day cannot give the people a stable local currency because the regime cannot resist the edge to print money then the country must use foreign currency the regime will not print and fuel inflation.
Zimbabwe is in this economic and political mess because the country has had the great misfortune of having professionals cheering and applauding those in power and authority even when what they are doing something defies common sense much less established professional norms. Zimbabwe needs professions with moral and professional integrity who will speak truth to power or else shut up.
Source - zimbabwelight.blogspot.com
All articles and letters published on Bulawayo24 have been independently written by members of Bulawayo24's community. The views of users published on Bulawayo24 are therefore their own and do not necessarily represent the views of Bulawayo24. Bulawayo24 editors also reserve the right to edit or delete any and all comments received.
