Tuesday, April 04, 2006

The final descent into the abyss

The Scotsman tells us:

NO-ONE uses wallets in Zimbabwe these days. They're too small.

The country's money is devaluing so fast that you have to lug around plastic bags full of it if you're doing a small grocery shop. To buy anything bigger, you'll need to fill a suitcase.

If you want to take friends out for a meal - say to a popular barbecue spot like Kwa Mereki in Harare's Warren Park suburb - it's best to take a car-boot full of brown bearer-cheques, wadded together into thick two-million dollar piles known here as "bricks", "metres" or - if you want to rub it in - "stationery".

Prices go up nearly every day here as record inflation takes its toll. At more than 782 per cent, Zimbabwe's inflation rate is the highest in the world. And that is just the official tally. Like most things in Zimbabwe, inflation figures are controlled by the authorities, who carefully choose which goods are to be surveyed. Business people say, privately, that the real rate is well over 1,000 per cent.

A telephone bill last month - more than 15 million Zimbabwe dollars - would have bought five houses five years ago. Nice houses, in Harare's rich suburbs.

This week, $15 million is worth just £41 - enough to buy a tank of black-market petrol. Next week - who knows?

Millions don't mean much now. Zimbabweans joke that they are "poor millionaires". Like Gladys, a domestic worker who earns $2.9 million a month. That's a salary she could only dream of early last year, when maids' wages were fixed at just over $80,000. These days her millions won't stretch to a regular piece of meat. So she eats dried grasshoppers.

The real sums these days are done in billions and trillions. The state-appointed city council in Harare is planning to shell out $1.45 trillion to buy its managers pick-up trucks, the official Herald newspaper reported this week. The state-run electricity company needs to raise $500 billion to import electricity.

Gideon Gono, the governor of the Central bank, has urged people not to panic at soaring prices. He has promised that inflation will reach a peak of around 800 per cent this month and then start falling. Few people believe him.


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