Zimbabwe's Severe and Deepening Economic Crisis

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Once the economic success story of southern Africa, Zimbabwe was the only regional country to export food to Ethiopia during the drought in the 1980's. Its economy was doing well, its people were well educated and richer than many of their regional peers. Now, the country is facing an economic crisis.

Zimbabwe's inflation rate has been rising since December 2004 when it soared to 622.8%. An inflation rate is the increase in the price of goods and services over a given period of time. Zimbabwe's inflation rate reached 1,204.6% in August, adding greater strain to its economy.

Zimbabwe has been plagued by shortages of foreign currency to pay for fuel and food, a crumbling urban infrastructure, and water and electricity cuts. Unemployment has reached 70%. According to United Nation's agencies, more than four million of the country's 13 million people face food shortages. The health sector is struggling to function amid the crisis, as skilled health staff have migrated to Western Europe and neighboring African countries in search of better salaries and better working conditions.

The soaring inflation rate means that goods cost more than 13 times what they did a year ago, compounding the hardship many Zimbabweans experience. Just to buy everyday goods such as bread and rice, Zimbabweans have to carry huge amounts of cash. Rents have also risen following the government's controversial demolition of many homes, creating more homeless people.

Recently, internet traffic in Zimbabwe has come close to a standstill after international firm Intelsat cut the country's bandwidth because the government failed to pay its $700,000 fee.

Analysts have predicted that inflation could hit 1,800% by the end of the year. Most analysts blame the economic crisis on a combination of mismanagement and corruption on the part of the government. Specifically, they argue the government aggravated the situation when it took control of land owned by white farmers, which triggered a sharp drop in production and exports of agricultural goods, and caused a fall-out with international investors. Some analysts say that to some degree, Zimbabwe's problems stem from a neglect of capital expenditure under the guidance of the IMF, running down once-superior infrastructure and health and education systems.

President Robert Mugabe denies claims that his government policies, including land reforms, have contributed to the country's problems. Instead he blames domestic and foreign enemies for the country's difficulties and accuses its former colonial power Britain of leading a Western campaign of economic sabotage. Mr. Mugabe, 82, once renowned as a liberation hero, led the country to independence from Britain in 1980.

Questions:
What is in the future for Zimbabwe?
What should happen in Zimbabwe?