Zimbabwe Should Adopt The US Dollar

Ecuador adopted the US dollar in 2000, with few major problems and El Salvador did so as well in 2001, so dollarization (whether official or semi-official) is hardly an unrealistic option for Zimbabwe. In fact, the Economist suggested precisely this in a recent article. The Reserve Bank clearly will not stop printing more money, in part because it is heavily influenced by the Zanu-PF government, which can only avoid total collapse of its authority by keeping the printing machines going. I don't really understand what you mean by democracy being a "learning process," since Zimbabwe is not a democracy and no one is learning anything. Its electoral commission is clearly in bed with the government and did not release presidential results for over a week, while government ministers have demanded a "recount" of the unpublished results. Dollarization has nothing to do with neo-imperialism, or bringing back the days of the British empire. The decision to adopt a foreign currency would be made on the national level, by Zimbabwe's likely MDC government and the newly minted leadership of the Reserve Bank. It is almost certain that Zimbabwe will drop its own currency and adopt a foreign monetary unit within the coming year. If it's not the US dollar, then it will be the South African rand.

mackenzie

07 Apr 2008 21:59

Comment

It's interesting that other countries had adopted the US dollar. I didn't know that. Nonetheless, the other parts of the argument stand. It's a pitiful recognition of incompetence on the part of government officials if they opt to let foreigners make their decisions for them. Zimbabwe has elections so it's a democracy of some sort, however flawed. American, Indian and Pakistani democracies are grotesquely flawed too, with governments using their power to alter the outcome of the voting process. Admittedly, Zimbabwe's electoral fairness problems seem much worse. People are always learning. The people who supported Mugabe because they believed him or feared him or wanted to favour he could lavish upon them are learning about the consequences of their choice. OpenUrmind's article, even if he copied it from someone else, also makes a good point. Zimbabwe's hyperinflation has been driven by its need to make debt repayments to the IMF, which is being controlled by the Americans. So a foreign country abuses its power to destroy the currency of a much weaker third world nation, then the country is forced into adopting the currency of its oppressor as a way out? Sounds like no-imperialism to me.