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A lesson from Zimbabwe

A lesson from Zimbabwe
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First Published: Fri, Mar 27 2009. 11 56 PM IST
Updated: Fri, Mar 27 2009. 11 56 PM IST
Good economic news is rare these days, but there is a welcome glimmer of hope in an unlikely country—Zimbabwe.
This African country is otherwise too small and inconsequential in the larger scheme of things. But it was till recently a model for bad economic policy.
The citizens of Zimbabwe had to battle inflation that touched 231 million per cent in July, as currency notes worth trillions of Zimbabwe dollars could not buy a meal. All this was thanks to bizzare policies that forced that country’s central bank to print money without any thought.
Various news reports now suggest that prices are dropping in Zimbabwe, after the new national unity coalition of Robert Mugabe and Morgan Tsvangirai— sworn enemies till recently —allowed businesses and people to abandon the worthless local currency and use US dollars and South African rand.
The economy has stabilized and there is stuff on sale in stores once again. Zimbabwe is a small reminder that Economics 101 matters.
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First Published: Fri, Mar 27 2009. 11 56 PM IST