The Hyperinflation in Zimbabwe

The Hyperinflation in Zimbabwe

1. There are many causes for the Hyperinflation in Zimbabwe :

• The political situation and struggle for independence during the 70’s. All the farming land were taken from the white community and distributed to the black community.
• Zimbabwe had a budget deficit, then the government had to print mponey, borrow foreing exchange reserves and also international monetary funds.
• The government compensated war veterans each month a pension, they were about 60000, due to a political pressure excerced by the government on the citizens.
• The government rised the taxes and applyed a price control because of the black Friday that occured in November 1997, the dollar lost about 75% of its value.

1. The government of Zimbabwe was not able to avoid the crisis because they focused on the political ideology more than anything else. Spending money on the military because of the war leads to inflation. They tried to find a short term solution but it was difficult for the fiscal authorities, but it was failing and they could not save the economy.
2. From what I read in the article, I can say that it was more a political problem than an economic problem. The government preferred to adapt a political ideology than to concentrate on the economic safety. All the decisions that their government were taken were used to expand the communiost ideology all over the country, and alqso to gain and maintain power. So Zimbabwe focused on the wrong policies,, they would have overcomed it if the strategy and the policies were different.

...