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'Mission: Zanu PF realise link between Z$, knowledge and production' - how, when only they know best

19 Jul 2019 at 14:46hrs | Views
Last month the Mnangagwa government enacted the Statutory Instrument 142 (2019) in which the regime banish the use of the basketful of multi-foreign currencies as legal tender in Zimbabwe leaving the local currency in its multiplicity of formats and names; Bond Notes and coins, RTGS$ and Ecocash all to be known from hence forth as Zimbabwe Dollar (Z$). Zimbabwe is not the first nation to make such a bold move, one of the first to do so was the United States of America in 1862.

In an article "A currency backed by nothing", eBusiness Weekly, also available in Bulawayo 24, explain is the simplest language why USA's bold move worked and why Zimbabwe's is doomed to fail.

"On February 25, 1862, United States President Abraham Lincoln signed the Legal Tender Act, a brainchild of Elbridge Spaulding. Those were terrifying times. The republic was at war with itself and would be till 1865," wrote eBusiness Weekly.

"Through the Act, Treasury would issue federal dollars backed by nothing. The new currency was quickly nicknamed "greenback", The greenback was to be used for all local transactions except custom duties and interest on government bonds which were to be paid for in the old gold-backed dollars or gold. The National Banking Act in 1863 would make it clear that banks could still issue own banknotes only that now, with the Legal Tender Act, such notes had to be backed by the greenback and not gold as before.

"They were worried inflation would soar once the anchorless currency circulated. They were wrong. Why? Well, war can be good business. Factories keep running because a lot of stuff must be produced and moved quickly to make way for more stuff to be produced. With such activity, the anchorless currency did not chase few goods, it oiled industry."

In Zimbabwe SI 142 has enacted in a huff, inflation was soaring and traders, workers and everyone with the economic clout to pick and choose which currency to be paid in was doing so to the detriment of the local currency. SI 142 was enacted to banish all foreign currency as legal tender and force everyone to use the local currency. In a country with a skewed trade deficit and little local production, prices of goods and services are tied to foreign currency. Increasing the amount of local currency without increasing production and available foreign currency was bound to fuel inflation.

At the time SI 142 was passed inflation was already 97% and it opened the door for the regime to print more money to meet the lost buying power of the local currency. As slippery slope as this caused a new wave of price increases fuelled inflation. In the last four weeks inflation has already surged to 175% and is set to grow exponential as the latest price and wages increases of 40% and even 1 000% with zero and even negative increased production take effect.

"What made it (USA bold move) work? Hastily, some will say trust and confidence," concluded eBusiness Weekly. "But, what we know and is irrefutable is that when the greenback was introduced in the early 1860s, industrial production, thanks in part to the war, made it work.

"We must, however, realise that production is an end, it is an outcome of peculiar knowledges and insights of what to produce and how to produce it. Zimbabwe and indeed Africa hasn't quite figured that out. In this is the mission of our time."

Well our mission is mission impossible in that power and authority to change anything is now invested and monopolized by those who believe they know best when in fact they know nothing.

"I know nothing and that is the only knowledge I have!" said the great Greek Philosopher Socrates (470 -399 BC). The Socratic paradox, given he is one of the "wisest", as the Pythia, the Oracle of Delphi, readily acknowledged.

What made Socrates such a wise man is his humility to admit he does not know and thus opened his mind to learn and have everything questioned from all possible angles. "The unexamined life is not worth living," he argued.

Socrates, like his fellow Greeks of his age, had an unquenchable thirst for knowledge, embrace the need for freedom of expression and free speech and gave birth to democracy. Greece prospered and thrived. It was Greece's golden age!

In Zimbabwe we are ruled by men and women who believe they have the divine right to rule and have been rigging elections to ensure they iron grip on power. They have stifled all meaningful debate there is no freedom of expression and no free media because they cannot bear being questioned much less held to democratic account.

SI 142 is doomed to fail; it is but one of the many Zanu PF voodoo economic policies to fail with disastrous economic consequences to the nation. Even after 39 years of gross mismanagement and rampant corruption and the national economy in ruins; Mnangagwa and his Zanu PF cronies still believe they know best and are they only one competent to rule Zimbabwe.

Our mission is impress on these Zanu PF thugs that they are humans, like all humans, they do not have the monopoly of knowledge. And that after 39 years of blundering from pillar to post, proof their do not know best, they must accept they have failed to govern.

Mnangagwa and his Zanu PF cronies must accept they rigged last year's elections, this Zanu PF regime is illegitimate and must step down.

As long as Zimbabwe remains a pariah state ruled by corrupt, incompetent and unaccountable thugs, the country will continue to sink into the abyss; is the one thing I do know for certain.

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