In Zimbabwe, bread costs Z$10 million

With inflation at 100,000 percent, few can afford even basic goods.

By Scott Baldauf | Staff writer of The Christian Science Monitor

from the March 25, 2008 edition

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Bulawayo, Zimbabwe - In her pink-and-yellow Indian sari, Neeti Patel sees the customers come into her shop, look longingly at the sandwiches, and walk back out empty handed.

It's not that her prices are high – a sausage sandwich sells for a mere 30 million Zimbabwe dollars, or about $1.25. The problem is that Zimbabwe's skyrocketing inflation – now the world's highest, running at more than 100,000 percent a year – keeps her costs rising. A 30-pound bag of potatos cost 90 million in the first week of March. Now that same bag costs 160 million, and her potential customers simply don't have the money.

"We have to put the prices up, but then people cannot manage to pay us," sighs Ms. Patel, who moved to Zimbabwe with her husband six months ago from India, assuming that this southern African nation would present the same opportunities to her as it has for generations of Indian shopkeepers. "But if we don't raise our prices up, we don't see any profit. We didn't think it would be like this."

There are plenty of theories for why Zimbabwe has descended from Southern Africa's breadbasket to its basket case. Western economists blame the socialist-inspired redistribution of commercial farms by President Robert Mugabe to his cronies and supporters. Mr. Mugabe's supporters blame Western governments, which withdrew economic aid in response to Mugabe's human rights violations. Whatever the cause, the hardship of ordinary Zimbabweans is easy to see in their shops and homes, and difficult to resolve as long as Mugabe and his supporters stay in power.

"It's really frightening what the future holds for people," says Paul Siwela, an economist in Bulawayo, an opposition stronghold. Ethnic purges against Zimbabwe's own people, combined with attacks against white commercial farmers has sent much of the country's skilled manpower elsewhere. "In the last eight years, the economy has contracted to 60 percent of what it was before."

Shifting blame?

Supporters of Mugabe, who faces the strongest-ever challenge to his 28-year presidency in elections on March 29, blame the country's economic woes on Britain, its former colonial ruler. But Mr. Siwela says most of the country's problems are self-inflicted.

Economic sanctions levied by Western countries on Mugabe's regime don't explain a huge growth in government spending which now equals nearly 60 percent of the total gross domestic product, he says.

With a manufacturing industry now operating at just 5 percent of capacity – largely due to a lack of reliable electricity and water – there are fewer taxes to pay for that spending, and Zimbabwe has fallen deeper into debt.

Most troubling, however, is the way Zimbabwe lost its ability to feed itself, and the region. In 1979, when Mugabe's nationalist rebels overthrew the white-dominated government of Rhodesia, and changed the name of the country to Zimbabwe, thousands of commercial farms managed to grow enough food to export throughout the region. Today, more than a decade of mismanagement and neglect have dropped agricultural production to precolonial levels.

This year, Zimbabwe's shortfall in maize is 360,000 tons, and its shortfall in wheat is 255,000 tons. Food aid, from friendly neighbors, from the United Nations' World Food Program, and from individual family members living in neighboring countries, will help to stave off starvation – for a while.

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