How high can inflation in Zimbabwe go?
In the mid 1970s, I served as a Special Adviser in the Labour Government led by Harold Wilson and Jim Callahgan. I remember that in 1975 inflation in the UK reached an annual rate of 25%. It was suggested by the media at the time that no modern nation state could survive such a rate of inflation for very long and it was rapidly reduced by a tough incomes policy.
Yet what has been happening in Zimbabwe in recent years defies comprehension. A friend of mine was on holiday in Zambia this summer and bought this Zimbabwean 100 billion dollar note.
At the time (end of July 2008), it was worth around 40 pence.
The latest news suggested that inflation in Zimbabwe has now risen to 231 million %. Meanwhile the power-sharing agreement concluded in September between Robert Mugabe and Morgan Tsvangirai has still not been implemented.
I have no idea how any economy can function with such an inflation rate or how the people of Zimbabwe are surviving. This story tries to give a sense of what life is like in such appalling circumstances