Zimbabwe surviving with its massive inflation

[wolram]

I know very little about the economics of countries, so i came here to ask, how is Zimbabwe
surviving with its massive inflation and falling exports, i have seen reports of factories closing for lack of electricity and the lack of essential imported parts, also reports that the inflation rate is 2 million percent.

 

[Greg Bernhardt]

I wouldn't really call Zimbabwe as surviving. It's a disaster. People obviously have lost faith in it's currency so they are back to trading goods for goods. Unfortunately there is Iran and Russia to distract people from thinking about little ol Zimbabwe.

 

[_Mayday_]

I saw an advert on TV the other day asking for donations for people who's pensions have been destroyed over there. I remember I went there in 2000, when it was a lot better, but still bad. When they sold soft drinks in glass bottles, they actually refunded you nearly half your money if you returned the glass.

I really want to buy a 500,000,000 dollar note, but I don't know if British banks would sell it or if I would be able to sell it, because by the time it got to me it wouldn't be worth the paper it's printed on.

http://cjw.id.au/images/ZimbabweNote.jpg

 

[Astronuc]

I know very little about the economics of countries, so i came here to ask, how is Zimbabwe
surviving with its massive inflation and falling exports, i have seen reports of factories closing for lack of electricity and the lack of essential imported parts, also reports that the inflation rate is 2 million percent.

I imagine they are primarily on a barter system. Many people have left the country to go to neighboring countries, mainly Zambia, Botswana and S. Africa.

https://www.cia.gov/library/publications/the-world-factbook/geos/zi.html

http://www.state.gov/r/pa/ei/bgn/5479.htm

Economy
GDP (2007 IMF est.): U.S. $1.437 billion.

Real GDP growth rate (2007 IMF est.): -6.1%.

Real per capita GDP: Reliable estimates of current GDP and population size are unavailable.

Avg. inflation rate: 1,694,000% year-on-year, May 2008, by official accounts; private sector estimates are roughly one and half times the official figure.

Natural resources: Deposits of more than 40 minerals including ferrochrome, gold, silver, platinum, copper, asbestos; 19 million hectares of forest (2000).

Agriculture (15% of GDP): Types of crops and livestock--corn, cotton, tobacco, wheat, coffee, tea, sugarcane, peanuts, cattle, sheep, goats, pigs.
Industry: manufacturing, public administration, commerce, mining, transport and communication.

Trade (2007): U.S. exports--U.S. $105.2 million. U.S. imports--U.S. $71.8 million. Partners (2000 est.)--South Africa 22%, U.K. 10%, Germany 9%, U.S. 8%. Total imports (2004)--U.S.
$1.989 billion: most of these imports were construction and agricultural machinery, transportation equipment, data processing equipment and software, industrial machinery, pharmaceuticals, fertilizers, and general manufactured products. Major suppliers--South Africa 34%, U.K. 10.8%, Germany 7.3%, U.S. 6%. (Although China is now said to be the second-largest trading partner, no statistics are available.)

 

[agentyumi]

Zimbabwe is really struggling. Only this month Due to a cash deficiency and government banking limitations, there are very long lines at many of the banks in the central business district of Harare, which are attracting a large police presence as well.

And also, because of escalating economic crisis, Zimbabwe's public universities failed to re-open. This is really dreadful. Most universities were supposed to open in August or early September, but teachers/professors have either gone on strike or there are no funds for school operations.

Additional information from Astronuc’s post

This is from Theodora.com
Economy - overview:
The government of Zimbabwe faces a wide variety of difficult economic problems as it struggles with an unsustainable fiscal deficit, an overvalued official exchange rate, hyperinflation, and bare store shelves. Its 1998-2002 involvement in the war in the Democratic Republic of the Congo drained hundreds of millions of dollars from the economy. The government's land reform program, characterized by chaos and violence, has badly damaged the commercial farming sector, the traditional source of exports and foreign exchange and the provider of 400,000 jobs, turning Zimbabwe into a net importer of food products. Badly needed support from the IMF has been suspended because of the government's arrears on past loans, which it began repaying in 2005, and the government's unwillingness to enact reforms that would stabilize the economy. The Central Bank routinely prints money to fund the budget deficit, causing the official annual inflation rate to rise from 32% in 1998, to 133% in 2004, 585% in 2005, passed 1000% in 2006, and 6000% in 2007. Meanwhile, the official exchange rate fell from approximately 1 (revalued) Zimbabwean dollar per US dollar in 2003 to more than 17,500 per US dollar in 2007.

GDP (purchasing power parity):
$6.186 billion (2007 est.)

GDP (official exchange rate):
$3.129 billion (2007 est.)

GDP - real growth rate:
-5.7% (2007 est.)

GDP - per capita (PPP):
$500 (2007 est.)

GDP - composition by sector:
agriculture: 16.7%
industry: 21.6%
services: 61.6% (2007 est.)

Labor force:
3.998 million (2007 est.)

Labor force - by occupation:
agriculture: 66%
industry: 10%
services: 24% (1996)

Unemployment rate:
80% (2005 est.)

Population below poverty line:
68% (2004)

Household income or consumption by percentage share:
lowest 10%: 2%
highest 10%: 40.4% (1995)

Distribution of Family Income - Gini index:
56.8 (2003)

Inflation rate (consumer prices):
6,072% official data; private sector estimates are much higher (2007 est.)

Investment (gross fixed):
18.2% of GDP (2007 est.)

Budget:
revenues: $1.105 billion
expenditures: $1.366 billion (2007 est.)

Public debt:
189.9% of GDP (2007 est.)
Agriculture - products:
corn, cotton, tobacco, wheat, coffee, sugarcane, peanuts; sheep, goats, pigs