Academic journal article African Studies Quarterly

Endangered Human Security in Cash Strapped Zimbabwe, 2007-2008

Academic journal article African Studies Quarterly

Endangered Human Security in Cash Strapped Zimbabwe, 2007-2008

Article excerpt

Introduction

The political competition between the Movement for Democratic Change (MDC) and the Zimbabwe African National Union Patriotic Front (ZANU-PF) posed severe threats to the human security needs of Zimbabweans in terms of "freedom from fear" and "freedom from want." The chronic cash shortages that were experienced between 2007 and 2008 belong to the "freedom from want" strand of human security, which is the focus of this article. The period was characterized by a rapid decline of the economy, a hyperinflationary environment, excessive pricing, and a shortage of basic commodities. A significant number of banks came to a standstill largely due to undercapitalization. Consequently, the public lost trust in the banking sector as a result of the government's ill-conceived monetary policies that it had initiated with the intention to establish a steady cash flow in the country. It is imperative, however, to realize that the economic downturn in Zimbabwe began in 1991 when the country embraced the Economic Structural Adjustment Program (ESAP) and only reached its peak in 2008. Although companies, investors, and the government were affected by cash shortages, the ordinary citizens were the hardest hit. In 2007, the inflation rate stood above 1,400 percent and the Zimbabwean dollar was trading against the United States dollar at nine million to one dollar. (1) According to Hanke and Kwok, the inflation rate was recorded at 79.6 billion percent by mid-November 2008. (2)

While other countries have experienced hyperinflation, Zimbabwe's experience was the first of its kind in the 21st century and the second highest in world history (the first position being that of Hungary). It marked the world's thirtieth hyperinflation, with the first that which France experienced during the French Revolution. (3) There is a precedence to Zimbabwe's hyperinflation experiences that is briefly represented by what took place in Germany (under the Weimar Republic 1920-1923) and Yugoslavia (1992-1994). The German hyperinflation led to the development of a corrupt and criminal black market as people responded to survive the wiping out of their incomes. (4) In response to increasing hyperinflation Germans invested in houses, antiques, jewelry, soap, and hairpins. Petty theft of copper pipes and brass armatures and fuel siphoning from other people's cars also became a common way of coping. Others resorted to barter trade of goods and services. (5) In Yugoslavia people devised different coping mechanisms, which included relying on remittances from relatives who lived in other countries, savings, and in particular the black market that worsened the prevalence of corruption and criminality. (6)

The experience with hyperinflation by many countries worldwide made the subject vital in the burgeoning literature that seeks to explain and reflect on the economic challenges but, however, neglecting the resultant human security challenges per se. (7) According to Claessens and Kose, financial crises come in different sizes, forms, and shapes changing over time into different forms and even spreading across borders. Their implications for economies are enormous. Some of the countries that experienced run-away inflation include Germany (1920s), the United States (1930s), and Greece (2009). (8) The Great Depression, which started in the United States in 1929, is believed to have caused mass unemployment and severe deflation in many countries across the globe at different times and with varying severities. Its most devastating effects, however, were largely felt in the United States and Europe where it lasted longer. (9) Standards of living are believed to have dropped alarmingly, and one-fourth of the industrialized countries' labor force could not find employment during the Great Depression. (10) From the foregoing examples, different types of responses were experienced, and it is thus valuable to establish how Zimbabweans and their government responded to the cash crisis and how this affected human security. …

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