Bond notes a lit­tle too late

Chronicle (Zimbabwe) - - National News -

ED­I­TOR — Let us call a spade a spade and ad­mit that a mis­take was made when salaries and prices for ser­vices and goods were pegged in United States dol­lars.

Zim­babwe be­came a sit­ting duck when com­mod­ity prices fell as China shifted from in­vest­ment to con­sump­tion as strat­egy to grow its econ­omy.

In the process, emerg­ing coun­try cur­ren­cies fell in au­to­matic re-ad­just­ment to de­creased in­vest­ment op­por­tu­ni­ties, and thus FDI and port­fo­lio in­vest­ment in­flows as well as ex­port vol­umes and rev­enue de­clined.

By its use of the US dol­lar as the an­chor cur­rency, Zim­babwe lacked this safety valve.

Go­ing for­ward, deep re­forms, which in­clude over­haul of many in­sti­tu­tions, are nec­es­sary.

These also in­clude both an aus­ter­ity pro­gramme and de-dol­lar­i­sa­tion. With­out fis­cal re­forms, and hope­fully debt for­give­ness and a bail out pack­age, de-dol­lar­i­sa­tion is un­likely to suc­ceed.

The bond notes story as told to date makes the na­tion a laugh­ing stock of the whole world. It is also too small an ini­tia­tive and pos­si­bly too late.

Lack of de­ci­sive ac­tion and re­forms on time have in­flicted enor­mous in­jury to the econ­omy and na­tional psy­chic.

The paral­y­sis and un­cer­tainty must be ended. Chi­ro­rodziva

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