The paper outlines the primary challenges of Zimbabwe economic system and provides a consistent account of inefficient economic strategies that disrupt the country’s well-being. The notion of Mugabenomics is reviewed in the case study.
Due to the findings of the case, there is a threat of Zimbabwe becoming the country with the highest level of inflation. Therefore, this study emphasizes the major problematic strategies that lead to a currency crisis. Finally, some recommendations on the possible development of Zimbabwe’s economy are provided.
Introduction: Zimbabwe Deviant Macroeconomics
As a field of study, macroeconomics regards the major issues that target a country’s general economic performances, decision-making and structural distributions. Since the indicators of Zimbabwe economy constitute a threatening picture, it is an undertaking task to outline any specific directions within the country’s macroeconomics.
Therefore, due to the Mugabe’s reign of terror, which predetermines every decision that is made in Zimbabwe, the term of macroeconomics can not be applied to regard the country’s policies. Instead, the notion of Mugabenomics was devised as an illustrator of Zimbabwe’s authoritarian politics.
The Notion of Mugabenomics
Due to the fact that Zimbabwe economic principles do not fall into any existing scientific theory, the term of Mugabenomics is used to emphasize its irrational direction.
The problem that disrupts the country’s economy is stipulated by an enormous inflation. According to Roger Bate (2008), consumer expenses are constantly going up in Zimbabwe. Thus, it became impossible to indicate the prices for food in the country, for they change every day. Consequently, the term Mugabenomics was coined to reveal a control-oriented character of Zimbabwe tragic economy decadence.
Analysis of the Economy Development in Zimbabwe
Zimbabwe Economic School of Thought
In general, there are several existing economic schools of thought that determine the essence of any macroeconomic system: Smyth’s classical economic school, Keynesian and Monetarist economic schools (Simpson, 2014, para. 2). In the case of Zimbabwe economics, it is not possible to indicate any features of existing economic school thoughts that could influence its development.
Strategies that Target Zimbabwe Economy
The sole strategy that directs the development of Zimbabwe economy was established by the country’s ruler, Robert Mugabe, and is based upon a centralized decision making and absolute control over the country’s resources.
Despite the fact that Zimbabwe possesses a huge economic potential, due to its fertile lands and valuable mineral resources, the country is precluded from any rational development. The socialistic economic strategy that was adopted by the president of Zimbabwe is rooted at the public policy purpose of equal distribution of resources. However, such strategy results in a decrease of economic stability.
The Major Threats of Mugabenomics
Mugabenomics is a deeply-rooted program that concerns every sphere of Zimbabwe life. Zimbabwe economics is not disrupted only due to the president’s desires. The ruler of the country managed to involve the major governmental forces into his authoritative political plan.
Thus, according to Higgins (2008), Gideon Gono who is Zimbabwe’s principal bank governor, follows the lead of Robert Mugabe, dwelling on the Bible laws. He claims that it is strictly forbidden to contradict the wishes of one’s president (para. 14). Consequently, a disastrous economic politics is a multidimensional concept that embraces logical, moral and religious assumptions. That is why, Mugabenomics may be regarded as one of the most threatening world institutions, since it forces people to rebut their own opinions.
Conclusion: Recommendations and Possible Development Strategies
Lately, the Zimbabwean government has accused the major business leaders of creating the economic problems that disrupt the country’s economy (Olson, 2007, para. 7). Therefore, the crisis of Zimbabwe economy is stipulated by the government’s deceiving politics.
Consequently, any alternative strategy that might contribute to Zimbabwe’s rise has to start from a complete substitution of the governmental structures and an embracement of a consistent economic strategy. Mainly, Zimbabwe economy can benefit from Keynesian economic school of thought, which is based on the implementation of effective fiscal policies and directed upon an inflation decrease.
Bate, R. (2008, July 7). How inflation may topple Mugabe. The Wall Street Journal.
Higgins, A. (2008, July 8). World news: Zimbabwe central banker answers to Mugabe, Bible; loyalty steers Gono while ruling party destroys economy. The Wall Street Journal.
Olson, P. (2007, July 13). Zimbabwe falters under Mugabenomics. Forbes.
Simpson, S. (2014, May 13). Macroeconomics: Schools of thought. Investopedia.