Zimbabwe’s most severe case of hyperinflation in

Zimbabwe’s gross domestic product drastically dropped
during Mugabe’s reign.

The
gross domestic product of Zimbabwe dropped due to harming the environment in an
attempt to raise the gross domestic product, the government being irresponsible
with their money and debt issue, and the small glimmer of hope to raise their gross
domestic product rests in another country’s plan.

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There
are evident environmental costs of natural resource depletion through land
exhaustion. Land was also seized from farmers without compensation, which was
unconstitutional but ultimately ignored. This affects the net exports because
instead of selling maize to other countries, they now have to import it from
other countries and then it does not count towards Zimbabwe’s gross domestic
product, but to the country where the maize originates from.

 

The
Zimbabwean government constantly borrowing from other countries in order to keep
their citizens alive increased the debt levels immensely. On top of that, they
mass printed money and caused the “second most severe case of hyperinflation in
history” (Hanke). This meant that every day the dollar amount was nearly
doubling, causing the government to eliminate the Zimbabwean dollar and take up
the Unites States’ currency instead. Using the American dollar prevented the
country from yet another inflation issue. However, old habits die hard, and
more laws were broken, leading to the production of a new Zimbabwean dollar,
called Zim dollars, and a new wave of hyperinflation for the poor country.

With the end of Mugabe’s ruling comes a new hope of
saving Zimbabwe from financial ruin.

Focus
on consumption by creating an easier way to do business.

The
easier it is to create a business, the more people that will create businesses
and create better incomes. In turn, this will increase customer consumption and
raise the gross domestic product of Zimbabwe. However, the issue of inflation
and illegal land takeovers may still be a factor that can prevent growth since Mr.
Mnangagwa has the possibility of continuing this terrible path due to him having
benefitted from the previous way of ruling the country. In order for him to
prove that he is listening to the unhappy customers under his ruling, he could set
the country on that path that Singapore’s first prime minister followed: “stable
money, no foreign aid, first world competitiveness and the protection of
private property and the public’s safety” (Hanke).