I've covered the financial crisis the only way I could: lacking the necessary knowledge and insight into the economy and the workings of the financial markets, I relied on sources I deemed reliable and reported everything that stood out. I noted that the crisis moved from housing to financial institutions to production, and is now causing a rising unemploymend rate that is surely not going to stay in the United States only. The numbers aren't just threatening because they show that more and more people lose their jobs, but also because those still employed are currently working less and less, and those who have been unemployed before stop looking for new jobs.
Right now, I could write about the bailout for the big three (GM, Chrysler, Ford). Paul Krugman says this will last for two months. Some weeks ago I might have written about the irony of the Chief Executives of exactly those companies flying to Washington in private jets to beg for help. This time, they took fuel efficient cars. I might have written about how the idea has me excited that this chance could be used to invest unbelievable amounts of money into infrastructure and finding solutions to a future energy crisis that ideally does not involve nuclear power. Whenever I heard that new jobs would be created by trying to develop alternative energy sources, I felt a a shudder of excitement. Of course, if you really think of it, you probably start to doubt that this is going to work. It is certainly not going to help all those people who have worked the same Detroit factory for 30 years and now get laid off bailout or not. The (to me unexplainable) declining oil prices won't really help either, although the US government is certainly cheerful as it weakens the position of countries which basically depend on high oil prices, like Russia and Iran, though probably not Venezuela (according to a study by Mark Weisbrot and Rebecca Ray, which you can view as a pdf right here) . I want to see a realistic estimation of the number of jobs tied to the auto industry, including all the other production companies doing business with them. In Austria, the first effects of the crisis on providers of car parts (Austrian companies also struggle because German companies are failing as well) were reported as early as October.
But this isn't the point of this post. Ever since the meeting of the G-20, it has been made clear that this hits developing countries and failed states even worse than Europe or the US. While those countries easily seem to pull out billions of dollars for bailouts and have social security systems to a certain extent, African countries like Zimbabwe experience a catastrophe: a combination of political chaos reaching back and an economic crisis that can not be prevented or even softened by a government. In a recent article on afrol.com, there was also the argument made that African products have difficulty competing with the rise of "local and regional products" in American and European consumption. Zimbabwe is number 3 on the "failed state list" of the Fund for Peace. The two countries doing even worse are also in Africa, Sudan and Somalia.
Zimbabwe is a landlocked country in the Southern part of Africa. It has borders with South Africa, Botswana, Zambia and Mozambique. It gained independence from the United Kingdom in 1965 as part of Rhodesia (along with Zambia and Malawi) and became an independent country in 1980. The 13,35 million citizens have a life expectancy of 44 years for men and 43 for women, which is among the lowest of the world. About 1,8 million have HIV.
The Presidential election in the end of March 2008 was widely covered in the West: Robert Mugabe, who has governed the country under several different titles since its independence in 1980, ran against Morgan Tsvangirai, leader of the strongest opposition party, who he had defeated in a widely critisized election in 2002. After a very long five weeks until the results were announced, it turned out that Mugabe had lost the election, but one candidate was required to gain more than 50 % which nobody did. In the following campaign for the second round, oppositional politicians were killed, subject to torture or disappeared. Consequently, Tsvangirai dropped out of the race and Mugabe won in the second round by 85 % of the vote.
Hyperinflation in Zimbabwe has been a fact since 2006. The Zimbabwe Dollar used to be worth more than the American, but right now, bread costs 35 Million Zimbabwe Dollars. Die Zeit reports that the official inflation rate is 235 Million %, but the real rate might be as high as five times that number (yeah, that would be more than one billion percent). This means that the currency of Zimbabwe is worthless and millions of citizens try to get (mainly) South African Rands.
Now, in addition to this crisis, the country was hit by an outbreak of Cholera that reportedly started in August. Cholera is the kind of infection that should be extinct by now: it is caused by lack of safe water access or a defective sewage system. Two days ago, Oxfam and UNICEF estimated that 60 000 people are currently infected, and that the infection is spreading to bordering countries Botswana, Mozambique, South Africa and Zambia (and I guess that threat will increase as more and more citizens of Zimbabwe find that they can not survive in their home country and flee).
Right now, I could write about the bailout for the big three (GM, Chrysler, Ford). Paul Krugman says this will last for two months. Some weeks ago I might have written about the irony of the Chief Executives of exactly those companies flying to Washington in private jets to beg for help. This time, they took fuel efficient cars. I might have written about how the idea has me excited that this chance could be used to invest unbelievable amounts of money into infrastructure and finding solutions to a future energy crisis that ideally does not involve nuclear power. Whenever I heard that new jobs would be created by trying to develop alternative energy sources, I felt a a shudder of excitement. Of course, if you really think of it, you probably start to doubt that this is going to work. It is certainly not going to help all those people who have worked the same Detroit factory for 30 years and now get laid off bailout or not. The (to me unexplainable) declining oil prices won't really help either, although the US government is certainly cheerful as it weakens the position of countries which basically depend on high oil prices, like Russia and Iran, though probably not Venezuela (according to a study by Mark Weisbrot and Rebecca Ray, which you can view as a pdf right here) . I want to see a realistic estimation of the number of jobs tied to the auto industry, including all the other production companies doing business with them. In Austria, the first effects of the crisis on providers of car parts (Austrian companies also struggle because German companies are failing as well) were reported as early as October.
But this isn't the point of this post. Ever since the meeting of the G-20, it has been made clear that this hits developing countries and failed states even worse than Europe or the US. While those countries easily seem to pull out billions of dollars for bailouts and have social security systems to a certain extent, African countries like Zimbabwe experience a catastrophe: a combination of political chaos reaching back and an economic crisis that can not be prevented or even softened by a government. In a recent article on afrol.com, there was also the argument made that African products have difficulty competing with the rise of "local and regional products" in American and European consumption. Zimbabwe is number 3 on the "failed state list" of the Fund for Peace. The two countries doing even worse are also in Africa, Sudan and Somalia.
Zimbabwe is a landlocked country in the Southern part of Africa. It has borders with South Africa, Botswana, Zambia and Mozambique. It gained independence from the United Kingdom in 1965 as part of Rhodesia (along with Zambia and Malawi) and became an independent country in 1980. The 13,35 million citizens have a life expectancy of 44 years for men and 43 for women, which is among the lowest of the world. About 1,8 million have HIV.
The Presidential election in the end of March 2008 was widely covered in the West: Robert Mugabe, who has governed the country under several different titles since its independence in 1980, ran against Morgan Tsvangirai, leader of the strongest opposition party, who he had defeated in a widely critisized election in 2002. After a very long five weeks until the results were announced, it turned out that Mugabe had lost the election, but one candidate was required to gain more than 50 % which nobody did. In the following campaign for the second round, oppositional politicians were killed, subject to torture or disappeared. Consequently, Tsvangirai dropped out of the race and Mugabe won in the second round by 85 % of the vote.
Hyperinflation in Zimbabwe has been a fact since 2006. The Zimbabwe Dollar used to be worth more than the American, but right now, bread costs 35 Million Zimbabwe Dollars. Die Zeit reports that the official inflation rate is 235 Million %, but the real rate might be as high as five times that number (yeah, that would be more than one billion percent). This means that the currency of Zimbabwe is worthless and millions of citizens try to get (mainly) South African Rands.
Now, in addition to this crisis, the country was hit by an outbreak of Cholera that reportedly started in August. Cholera is the kind of infection that should be extinct by now: it is caused by lack of safe water access or a defective sewage system. Two days ago, Oxfam and UNICEF estimated that 60 000 people are currently infected, and that the infection is spreading to bordering countries Botswana, Mozambique, South Africa and Zambia (and I guess that threat will increase as more and more citizens of Zimbabwe find that they can not survive in their home country and flee).
1 comment:
You have no idea how much I depend on your analysis. I have digested this... Thank you.
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