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Worried About Your Finances? Last Week, The Entire Country Of Zimbabwe Only Had $217 In Its Bank Acc
January 30, 2013
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Photo: Getty Images

Every have that moment, when you hit the bank machine and think "how did my account get so low?"

Well, imagine that happening to an entire country.

One day last week, Zimbabwe had only $217 left in its public account, according to finance minister Tendai Biti.

That's $217. Not $217 million or billion.

The government had just paid its public servants, Biti says, and all that was left was $217.

"The government finances are in paralysis state at the present moment," he said, adding that Zimbabwe might have to ask for donations.

He also told reporters in the capital, Harare, that some of them were probably better off than the state.

Tendai Biti speaking last November (Photo: Getty Images)

Today, however, he clarified to the BBC that the account received $30 million the next day.

"You journalists are mischievous and malicious - the point I was making was that the Zimbabwean government doesn't have the funds to finance the election, to finance the referendum," he said.

"To dramatize the point, I simply made a passing reference metaphorically that when we paid civil servants last week on Thursday we were left with $217 ... but even the following day we had $30 million in our account."

So okay - his comment was meant to highlight how challenging it will be to pay for elections in Zimbabwe.

Still: how can the government of an entire country be down to its last couple of hundred dollars?

The Guardian explains the roots of the financial challenges facing Zimbabwe:

"Zimbabwe's economy boomed after independence in 1980 but took a hit in 1997 when the president, Robert Mugabe, gave in to pressure from war veterans waging violent protests for pensions. From 2000 the seizure of white-owned farms led to chaos in the agriculture sector and the economy shrank by half. In 2008 hyperinflation of 231,000,000% broke the national currency and left millions of people hungry."

Since then, the country has adopted the U.S. dollar and the South African rand, which has helped stabilize things, but some aid workers say many people aren't seeing the benefits.

"There have been some assertions that the economy is getting better but as ordinary people we have not been seeing it," McDonald Lewanika, director of the Crisis in Zimbabwe Coalition, told the Guardian.

"The minister's statement is indicative of the very difficult situation in the country. It shows the economy really is in the intensive care unit," he went on. "We have a very small formal economy so the space where minister Biti can raise resources is limited. And we should ask where certain revenues are going."

Zimbabwe has lots of lucrative natural resources, including diamonds. But according to the opposition Movement for Democratic Change (MDC) party, a lot of income from diamond sales, as well as actual diamonds, are being stolen or redirected to finance Mugabe's Zanu-PF party's campaign for votes.

Civil servants protest on July 24, 2012 and demand more wages (Photo: Getty Images)

Partnership Africa Canada said in November at least $2 billion of diamonds from Zimbabwe's Marange fields have been stolen by people linked to Mugabe's party since 2008, Yahoo! News reported.

A few years ago, Mugabe formed a power sharing government with the MDC, which is Biti's party.

But as NBC points out, "the debt the country built up during those years of nationalist rule by President Robert Mugabe left it with a minimal tax base and few cash reserves, the IMF said, leaving Zimbabwe vulnerable to economic "shocks."

Unemployment is also very high.

"We're in a challenging position, we're a small economy and we've got huge things to be done," Biti told the BBC. "But... the minister for finance of Greece has an even worse story."

Biti is talking about the economy right now because a referendum on a new constitution is planned for March, after which Mugabe is expected to call an election.

Zimbabwe needs nearly $200 million to pay for the referendum and the election. Which would create a serious overdraft problem if there's only $217 in the bank.

The country has also faced criticism from human rights advocacy groups. In a 2012 report on Zimbabwe, Human Rights Watch pointed to political violence, repression and intimidation of human rights defenders, crackdowns on freedom of expression, and other human rights violations.

You can read that report right here.

Via The Atlantic Wire


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