Excerpted from Adam Clark Estes, Jan 29, 2013
There are cash-strapped governments and there are broke governments. And then there’s Zimbabwe, which, after paying last week’s government salaries, has just $217 left in the bank…Zimbabwe, the country that’s home to some of the world’s largest plutonium and diamond reserves, literally has the same financial standing as a 14-year-old girl after a really good birthday party. The country’s finance minister admitted, “Last week when we paid civil servants there was $217 [left] in government coffers.” and “The government finances are in paralysis state at the present moment. We are failing to meet our targets.”
. . . The economy started to come apart at the seams in 2000, when President Robert Mugabe seized the land of over 4,000 white-owned farmers, effectively dismantling the country’s agriculture industry. Over the course of the next decade, the country spiraled into an extended period of hyperinflation, the likes of which the world almost never sees. . .
It’s unclear how the Zimbabwean government is going to get itself out this fiscal mess, but whatever it does, it needs to do it quickly. . .The country obviously desperately needs a major change. “But action against corruption probably won’t come until the end of Mugabe’s reign, and a new constitution coming up for a referendum this spring — presuming the funds can be found — might set up the aging autocrat for another term in power,” writes Fernholz.
Until then, looking for quarters under the couch isn’t going to cut it, so Zimbabwe is doing the only thing it can do. “We will be approaching the international community,” Biti said. You’ll never guess who’s most likely to come to the rescue. Hint: They’re big fans of rare minerals.
Author: Adam Clark Estes
Zimbabwe has $217 in the bank: finance minister, AFP
Zimbabwe only has $217 in the bank, Tim Fernholz, Quartz