ShareThisZimbabwe's wily street hawkers have finally found a use for the worthless $100 trillion banknotes that were issued here in January. They sell the bizarre banknotes as souvenirs to foreign tourists for $2 each.
The currency with the never-ending string of zeroes is quickly fading into history, just two months after the latest notes were printed by the inexhaustible central bank. Also disappearing is Zimbabwe's phenomenal level of hyperinflation, which last year reached a stunning 89.7 sextillion percent (a number expressed with 21 zeroes), making it the most extreme hyperinflation crisis of any country in modern times.
Zimbabwe's new coalition government has cracked both problems with an absurdly simple solution: It has abruptly switched to foreign currencies, allowing customers to pay for products with U.S. dollars or South African rand or Botswana pula.
The entire economy, almost overnight, has switched to a unique system of multiple foreign currencies.
Equally swiftly, hundreds of Zimbabwe's long-closed shops and groceries have reopened, retail license fees have been slashed, and the new competition has reduced prices to stable levels.
The dollarization (and rand-ization and pula-ization) of the Zimbabwean economy has finally slain the dragon of hyperinflation, providing the first fragile signs of hope for a devastated country. While the junking of the Zimbabwean dollar was a blow to the ego and power of Zimbabwe's bloated central bank, the radical move to adopt foreign currencies is still one of the fastest ways to kick-start any economy that is ruined by inflation and money-printing excesses.
Empty shelves have been filled. Prices of staples such as milk and eggs are still twice as expensive as in neighboring South Africa, but they are half as expensive as they were in January. People are shopping again, and merchants are stocking their inventories anew.
Those goods are still unaffordable for many people, of course. The unemployment rate is estimated at 94 percent, wages are often unpaid, and the vast majority of people are dependent on donated food rations.
Not surprisingly, there is a severe shortage of the foreign money. Shops don't have enough foreign cash to provide change to customers, so they issue "credit notes" on little bits of paper -- or persuade their customers to accept change in candies.
Investors, including Canadians, are watching closely. Toronto-based Caledonia Mining Corp., which suspended production at its Blanket gold mine in Zimbabwe last October, is considering a reopening of the mine within the next few weeks because the new government is promising that producers can export a much higher percentage of their production. The mine could produce up to 40,000 ounces per year.
"We welcome the new government policies, and we're working to get the necessary approvals," said a spokesman for the Canadian company. "We remain cautious and skeptical. But it would be a shame to miss this opportunity."
The first twitches of economic recovery can already be seen on Harare's streets. In the industrial district, dozens of men and women are waiting at the gates of the factories, having heard that a few people are actually being hired on occasion.
"Before, there wasn't any hope at all," says Coffee Musiya, 37, an unemployed man who has joined a crowd of about 50 jobseekers outside the gates of the National Foods factory in Harare. The crowd has been waiting for weeks, and a few have gotten temporary jobs at the factory. "It's a little bit improved now," he says. "Maybe four or five people might get a day job."
(Distributed by Scripps Howard News Service, www.scrippsnews.com.)
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