Zimbabwe's currency crashes- we are in a catch 44

The value of the Zimbabwean dollar is said to have suffered its worst crash in memory. According to New Zimbabwe, "Black market exchange rates -- fueled by the central bank buying at the illegal rates to pay the mounting debts of crumbling state fuel and power utilities -- rose to upward of 300,000 Zimbabwe dollars to one U.S. dollar in large offshore deals." And "people are holding out for the highest bidder and mentioning as much as 400,000-1 which could be tomorrow's price."

These rates of exchange will probably not mean much to many people unfamiliar with life in Zimbabwe. But think of this: today you can buy a bottle of soda for $1 and tomorrow $1 does not buy anything. And I do not mean because the soda has become $1.20. No, I mean because it has become $3000. That is how bad things have become. And worse, the salaries never move an inch.

Anyone who has picked up a newspaper in the last few years is well aware of intensity of the voices calling for Mugabe's exist as the basis of salvation for Zimbabwe and indeed Africa. Many people believe that Zimbabwe's problems directly stem from one man and that were he to go, all would be great. But, to many Zimbabweans, Mugabe or no Mugabe, life has become so unbelievably tough beyond even my imagination. Though I can not imagine what things have become, I know that God and angels are busy at work in Zimbabwe. For how else could one explain how people survive with salaries that do not buy anything. Imagine what you would do if your salary could only cover your transportation costs to and from work. If you are a domestic worker, your salary can only last five days if you spent it on a loaf of bread and milk, which are not always available.

Take my family for instance. I have no idea how they manage to go through life in these times. Even though I send money home, the Zimbabwean situation is really beyond my imagination. A few weeks ago I sent money home to help with the expenses of my uncle's funeral and transportation costs for those who came from the villages. Fast forward to this week, prices for commodities have gone upwards of 500 % and some of the people can not afford the bus fare since the price they had paid for the bus is now only 20% of what they need to travel back.

Funerals are no longer as long as they used to be. A while back, you die, people come and mourn for at least a few days. Today everything is different. You die today, they bury you tomorrow, just to save costs. For those who have relatives abroad, they can at least afford to call every day to explain their dire situation and emotionally appeal for help. It is a hardship that has bankrupted even those of us who cannot fathom having money in a bank while our countrymen and women suffer. At home, people no longer keep money in the local currency. And that is part of what is fueling the crisis our country is facing today.

As citizens are hoarding all foreign currency, much of it never goes through the central banks to enable us to buy goods like oil from abroad. Instead, deals are made in living rooms and Western Union is becoming richer by day. Western Union takes foreign money and pays it out in Zimbabwe dollars. In the process, they buy the local currency, keep the transaction costs, plus the any results of currency fluctuations.

While the country languishes in shortages for money, a good number of citizens have enough cash stashed away in US dollars and other currencies- money that could be used to buy national essentials. So it is not surprising that the central bank is now on the street hunting for foreign currencies with tonnes of now- worthless Zimbabwean dollars, which further drives down the value of the local currency.

Though Mugabe has become the definition of the Zimbabwean problem, many people tend to ignore the contributions of Zimbabweans on the decline of the country. There are the rich who are hoarding away money and buying away anything of value, which drives everything up the roof, no, the sky. You have people who will buy US dollars from people abroad at exorbitant rates that fuel speculation within the country. Then you have local government officials who will buy US dollars from the central bank, turn around and sell the money at ridiculous prices or use it to pay tuition for their children abroad. Then you have the people abroad who will buy and sell commodities in Zimbabwe without the money actually reaching the country. The amount of external transactions going on abroad is unbelievable. Fuel and food is sold abroad in foreign currency for people to pick up at home and that money stays here.

May be Zimbabwe will win the prize for being the only place where a car's value appreciates. But for the time being, our country continues to go down while Mugabe gets all the blame. May be it is a chicken and egg problem since people have lost confidence because of some government policies. But, I am sure that unless Zimbabweans all take the moral high stand to help the county, Mugabe or no Mugabe, Zimbabwe will continue to burn. The only problem is, how does one sacrifice only to give to vultures or to not see the benefits. How does one send money through formal channels when that money may end up in a bar as a stipend of a friend whose parents are in charge over there? How does one sacrifice for the country when the immediate family could be better off- FOR NOW- with just a little bit of a boost in the black market rates? We are in a bind, a bind that is yet unknown. Indeed, we are in a catch 44.