Insiders Insight: Zimbabwe protests as economic crisis deepens

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Forex shortage launches a crisis in Zimbabwe

In Zimbabwe, patients seeking medical care have to provide their own bandages, fuel prices are now the highest in the world, and police fired live rounds and tear gas at crowds protesting the rising cost of living.

Zimbabwe is suffering from a shortage of foreign exchange that is making it impossible for companies or the government to pay their bills. The crisis looks set to bring the country to a virtual halt. There are reports that Zimbabwe has only $400 million in actual cash at the moment — far below the amount of electronic funds held by the country’s banks.

The shortage of foreign exchange is a problem because Zimbabwe doesn’t have a currency of its own following bouts of hyperinflation under the regime of Robert Mugabe and now relies on the US dollar and other currencies. Without enough outside money in the country, the economy can’t function. But it’s not just the economy. The health system has virtually collapsed, with doctors unable to provide even basic services for patients.

President Emmerson Mnangagwa’s administration responded to the forex crisis by jacking up fuel prices and introducing a raft of other interventions over the weekend. That has sparked country-wide protests and calls from the Zimbabwe Congress of Trade Unions for workers to down tools.

Pastor Evan Mawarire, who led protests against the Mugabe regime in 2016-17, has joined in this effort as well. He has called on workers to stay away from businesses and students to stay out of school. His involvement signals that this strike might be gaining momentum.

Officials are clearly feeling the pressure. On Monday, the first day of the strike, police fired live rounds and tear gas at crowds in the capital, Harare, and in the town of Bulawayo who had gathered to protest.

The government has promised a new currency will be in place before the end of the year, but almost certainly not in time to stave off the serious political confrontation that is developing.

Compiled by  @_andrew_green

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Author : Insiders’ Newsletter

Publish date : 2019-01-15 16:30:03

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