Sensationalizing? No Way! A hundred trillion dollar bill is attainable and here’s why

How much do you typically pay for a loaf of bread? Potentially a few dollars. Well, in Zimbabwe a loaf of bread is approximately 300 billion dollars. Zimbabwe dollars that is. If a United States citizen were to travel to Zimbabwe, a one-dollar United States bill would be worth an outrageous amount to the U.S. citizen.

Pictured above is a 100 trillion Zimbabwean dollar bill. How much would that be in United States dollars? Only about $300. Crazy, right? As of July, the inflation rate in Zimbabwe is about 231 million percent. Zimbabwe’s current economic state of affair, is speculatively due to several factors.

Drying up?

Just one of the factors in the crash of Zimbabwe’s economy, going back roughly 16 years, is thought to be a drought. Robert Mugabe, the president of Zimbabwe claimed that the drought was the cause of the economic collapse and incredible amounts of inflation. According to Craig J. Richardson, Mugabe claimed that “Zimbabwe’s economy is suffering because of ‘continuous years of drought” (2005, “How the Loss of Property Rights Caused Zimbabwe’s Collapse”).

While Mugabe believes that the drought is the major cause of the economic suffering, Richardson presents a graph that he created that shows no real connection between amount of rainfall and the Gross Domestic Product growth.

In Figure 1, there doesn’t appear to be a direct connection between the growth of Zimbabwe’s GDP from 1998 to 2003. In fact, GDP begins falling in 1998 and continues to plummet far down below previous years, contrary to the rise and fall of rainfall levels among those five years. If drought isn’t actually one of the major factors of the economy of Zimbabwe, then what is?

Stolen Lands?

Before 2000, Zimbabwe had numerous resources that made its economy great, including secure rule of law, modern property rights system that kept everyone’s property safe, e.g. houses, and a sophisticated manufacturing base. All of Zimbabwe’s resources led to a good GDP growth of over 4 percent per year.

Although Zimbabwe had an abundance of economic security, Robert Mugabe decided to begin “seizing commercial farms,” in an attempt to return them to the black Zimbabweans (Richardson, 2005, “How the Loss”). Mugabe believed that many of the commercial farms owned by whites where stolen by the whites, a statement fueled by the disparities between blacks and whites.

Although nearly all 4,500 commercial farms were seized in an attempt to return them to traditional black farmers, most of the plots ended up back in the hands of “Mugabe’s political supporters and government officials, whose knowledge of farming was meager” (Richardson, 2005, “How the Loss…”).

The land seizures caused a mass uproar among many citizens, both black and white. The picture above shows “The burning car of slain Zimbabwean farmer Martin Olds is left outside his farm” (Gaffey, 2017, “In Zimbabwe, White Farmers Are Suing President Robert Mugabe Over Land Seizures”). Olds was a white farming who was killed trying to escape his burning farm, attacked by Zimbabwean veterans.

Together

After the beginning of the land seizures, by 2003, Zimbabwe’s economy was shrinking at 18 percent per year, which has brought it to where it is today. Today Zimbabwean farms are still in a constant custody battle between the whites and blacks of Zimbabwe, resulting in the massive inflation rate the country currently has.

But why should a U.S citizen care??

Zimbabwe and the U.S. have a relationship, which means there are benefits to U.S. citizens. What should U.S. citizens do and why? Foreign aid could help Zimbabwe get back on its feet and repair its economy, and in turn the U.S. could benefit by having more trade options with Zimbabwe.

The citizens of the united states should vote in elections deciding foreign aid get involved with politics to increase your knowledge in order to make good decisions that will in turn benefit themselves and other votes.

References

Richardson, J. (2005). The loss of property rights and the collapse of Zimbabwe. Cato Journal, 25(3), 541. Doi:10.1.1.111.1168

Gaffey, C. (2017). In Zimbabwe, white farmers are suing president Robert Mugabe over land seizures. Newsweek.

“Zimbabwe $100 Trillion 2009 Obverse.” Commons.Wikimedia, 2 July 2009, commons.wikimedia.org/wiki/File:Zimbabwe_$100_trillion_2009_Obverse.jpg.