When countries take on
high levels of debt, they are at risk of running out of cash. They default on
their loans. They need to cut spending, restructure their loans and pay them
off like Greece. Venezuela took on $50 billion in debt, but didn’t spend it on
maintaining their oil business. They now have a $100 billion debt and oil
production has failed.
Venezuela should have
been forewarned about hyperinflation that occurs when the government can’t pay
their bills.
Zimbabwe’s sovereign
bankruptcy resulted from high government spending of hundreds of millions of
dollars in the war in the Democratic Republic of Congo from 1998 to 2002. Their
economy began to collapse in 2000.
The government printed
money to pay their bills and war debt from 2003 to 2009 resulting in inflation
that reached 231,000,000% in 2008.
To get out of
hyperinflation, the government abandoned the Zimbabwe dollar and adopted US and
other currencies. In 2009 they began to recover from their 95% unemployment
rate.
After 2000, the
government of Zimbabwe seized private farms and ranches from white owners and
gave these to Black Cronies who didn’t know how to farm. Crops failed. Their
policy remains “black only” for land ownership. South Africa did the same.
Zimbabwe has a population
of 17 million and a land area of 150,872 square miles. Labor force is 6
million, Labor force by occupation is agriculture 60%, services 9%,
manufacturing 4% and mining 3%. Poverty rate is 32%,
Zimbabwe has a Nominal GDP
of $18 billion. GDP growth is 2.7%. GDP by sector is agriculture 20.3%,
industry 25.1%, services 54.6%. Nominal per capita GDP is $908.
Main industries are mining
and cattle. Zimbabwe has reserves of
metallurgical-grade chromite, coal, asbestos, copper, nickel, gold, platinum,
iron ore, tin, clay, wood, cement,
chemicals, fertilizer, clothing, footwear, food and beverages. Ease of doing
business rank is 161st.
Exports are $3 billion in
platinum, gold, ferroalloys, cotton, tobacco, textiles and clothing sold to
South Africa 80%, Mozambique 10%, UAE 4%.
Imports are $5 billion in
machinery, vehicles, manufactured goods, chemicals, fuel and food purchased
from South Africa 50% and Zambia 24%.
Government revenue is $3
billion, spending is $4 billion, Current Debt is $18 billion.
Norb Leahy, Dunwoody
GA Tea Party Leader
No comments:
Post a Comment