Hope for Zimbabwe?

According to many published reports (here, here, and here for example), there may be hope for Zimbabwe. The evidence continues to mount that President Robert Mugabe lost the recent election and will, finally, step down and end his almost 30-year reign.

President Robert Mugabe's grip on power continued to loosen Tuesday as a range of informal contacts began between his inner circle of advisers and opposition figures over how to break a stalemate resulting from last weekend's election, sources said.

With evidence increasingly clear that Mugabe came in second, behind opposition leader Morgan Tsvangirai, news reports and other sources said members of the president's camp have reached out to the opposition in search of a deal that would allow him to step down gracefully, while avoiding prosecution for any crimes committed while in office.

Okay that's an interesting piece of international news, but why am I bothering to blog about Zimbabwe of all places? Especially when my attention should be focused on the start of the MLB season? Well Zimbabwe is such a "train wreck" it's hard not to watch. Seriously, the economy is so messed up that we use it all the time as a worst case scenario in my macroeconomics classes. I won't bother with the whole list of things, but most estimates put the OFFICIAL inflation rate at over 100,000% and the unemployment rate at more than 80%.

That first statistic is almost unimaginable so bear with me for a minute. Think about it: 100,000% inflation. That means a $1 soft drink purchased from the drink machine just down the hall from my office would cost more than $100,000 a year from now! Of course that leads to all kinds of other problems. For instance, how do you carry that much cash around? You don't, of course; the government just prints larger denomination bills. I read recently that Zimbabwe had just started printing a $10 million dollar bill -- which wouldn't even buy a loaf of bread in Harare (the capitol city), if you were lucky enough to find a store with bread for sale.

See last year Zimbabwe's version of the Bureau of Labor Statistics announced it was unable even to compute the consumer inflation rate because its statisticians couldn't find enough items for sale in local stores to measure inflation. Seriously; it's one messed up country. How did this happen? The easy economic answer is Zimbabwe lost control of its money supply. (See the quantity theory of money if you don't remember your basic long-run macro models.) I also blame Zimbabwe's neighbors, mostly South Africa, for failing to pressure Mugabe into some semblance of sanity. No, instead they took the "don't criticize a hero of the liberation struggle" approach and turned a blind eye to the incredible suffering in the country.

How bad is the suffering? Even more chilling than the economic statistics is this little factoid: According to the World Bank and the U.N. average life expectancy in Zimbabwe was 63 years in 1990 but only 37 years in 2005! And remember this is not a country beset by civil war or foreign occupation or terrorist warlords. No this has all been accomplished under a steady, secure government.

So now maybe you see why I care enough to talk about Zimbabwe rather than Opening Day (a proper noun in my world). Of course while the signs are positive for change in Zimbabwe, I'm still skeptical Mugabe will step down peacefully. The government is taking its own sweet time in releasing voting results and I read last week that it wouldn't matter if the government did "lose" the election because the military had already indicated they'd stage a coup if anyone replaced Mugabe. In a country that poor and messed up, the military likely is the only organization capable of seizing control so I'm not real optimistic. On the other hand, I did notice this claim in the NY Times report about negotiations for a change in government:

“The chiefs of staff are talking to Morgan [the opposition leader] and are trying to put into place transitional structures,” ... “The chiefs of staff are not split; they are loyally at Mugabe’s side,” Mr. Makumbe said. “But they are not negotiating for Mr. Mugabe. They are negotiating for themselves. They are negotiating about reprisals and recriminations and blah blah blah. They are doing it for their own security.”

So it seems the rats may be fleeing the sinking ship. I truly hope so. Of course getting rid of Mugabe won't immediately fix Zimbabwe's problems, but it's a necessary first step. Some say if Mugabe steps aside peacefully he may be able to salvage his historical legacy. I hope for the opposite. I hope that when he finally leaves his neighbors finally will be able to admit how "misguided" they were in supporting him for the last 10+ years of his reign and they'll begin to atone by helping Zimbabwe rebuild.

I'm hopeful, but I'm not convinced Zimbabwe has yet seen the last of Mr. Mugabe.