The World Bank came to be in 1944, and its headquarters are in Washington, D.C. The organization’s website explains its two goals targeted for completion by 2030 in the following manner.,
End extreme poverty by decreasing the percentage of people living on less than $1.90 a day to no more than 3%.
Promote shared prosperity by fostering the Income growth of the bottom 40% for every country. Although it is not a bank in the commonly defined way, it Is a technical and financial source for developing countries worldwide. The Bank provides my-interest loans, zero-to-low interest credits, and grants to struggling nations. Along with these contributions, the organization offers assistance in:
Research and analysis
Tools, research, knowledge
Live discussions with participants
Although the World Bank granted Its services to Zimbabwe, brokering millions of dollars in an attempt to save the country from crisis, Zimbabwe is currently in arrears with the group and is receiving no loans or credits from the World Bank.
Still, the WB, over many years has shared and continued to offer ideas to Zimbabwe to establish a tum-around for the population of the country. In 2015, the WB began a project to procure and modernize technical assistance in the country. Later In the same year, a development support program for the Zimbabwe health sector that included health, nutrition, population and reproductive health.
In January of 2017, a National Water Project for the country began to improve availability and increase the efficiency of water services. And even this month, the WB is assisting Zimbabwe to develop solutions for climate change and agriculture, energy, forestry, and smart use of water.
Meanwhile, the Zanu-PF continues to wield Its malevolent sword. The Zimbabwe African National Union — Patriotic Front has been the ruling party in the country since 1980. in 1988, the party merged with the Zimbabwe African People’s Union. Robert Mugabe is and has been the Rime Minister throughout. Zarni-PF is a socialist party which supports African nationalism and Is opposed to Western domination.
In an opinion piece in The Guardian, dated September 2016, the writer says that at 93 it Is likely that President Robert Mugabe Is nearing the end of his ruthless administration, although he continues to claim he will be coming in a 2018 election. But even citizens who oppose the Zanu-Pf regime are concerned that any change might create even more economic catastrophes.
And the bad news is still the only news coming out of the South Africa country. The possibility of a repeat of the 2008 hyperinflation crisis is a valid and present danger as the “formal economy” declines. Thousands of street vendors hawk their wares on the streets of central Harare because they have lost their company jobs. The “informal economy” as the government calls it, makes up the majority of Zimbabwe’s workforce.
“The government is moving Into an increasingly untenable situation, and they are In desperate need of a bailout In the billions to restore liquidity In the country,” said John Robertson, an Independent economist In Harare. ‘The formal sector has collapsed. The informal sector is now very much bigger, and it Is actually keeping alive a very much higher percentage of the population.”
The future of Zimbabwe does not appear to be strong. Once a prospering nation, the country still has a reasonably stable infrastructure, beautiful countryside, pleasant climate, and the potential for tourism and agriculture. Zimbabwe also has a significant source of talented and skilled laborers. The ongoing political problems are the “elephant in the room” for Zimbabwe, leading many Zimbabweans to believe that the eventual end of Mugabe’s regime will be the gateway to a better future for their homeland.
How Zimbabwe’s Crisis Has Impacted Healthcare Services
Facing a plethora of health challenges and an average life expectancy of only 58.56 years, the citizens of Zimbabwe, Africa are in desperate need of improved access to healthcare. Topping Zimbabwe’s list of major health concerns are malaria, cholera, tuberculosis, and HIV/AIDS.
Additionally, there has been a recent surge in the number of citizens suffering from kidney disease. Residents living in the Mashonaland East province and Mutoko communal lands have been particularly hard hit by these health maladies, as they are more geographically removed from the health care centers in Harare and other city centers.
In addition to facing a short life expectancy and a variety of serious health ailments, citizens of Zimbabwe who require healthcare services face an uphill battle. Not only do they have a shortage of healthcare providers, but they also face lengthy delays for surgical treatments due to a lack of functional medical equipment. Below is a look at the role that Zimbabwe’s economic crisis has played in healthcare worker migration and the delivery of quality treatment to patients. Zimbabwe’s economic crisis has played a key role in the longstanding problem of healthcare worker migration.
Dollar Hoarding Blamed for Zimbabwe’s Cash Crunch
In a statement to Parliament April 6, Zimbabwe’s finance minister, Patrick Chinamasa, blamed the current critical cash shortage in Zimbabwe in part upon the hoarding of dollars by traders, in violation of a law (the Bank Use Promotion Ad) that requires that they bank their sales proceeds.
Chinamasa described the hoarding as “indiscipline” and “counterproductive” since the money “should be circulating in order to deal with queues at the banks” The government is no longer tolerating such hoarders, he said. “To date, three traders have been hauled before the courts” on related charges, and all three have “pleaded guilty to the offence and they now await their sentences after the Easter holidays.” He implied that more prosecutions are to be expected, as “the net is dosing on those players who continue to disrespect our laws” Zimbabwe abandoned its own currency in April 2017 after a period of hyperinflation. It now employs eight currencies from eight foreign countries as its own legal tender. The most important of these is the U.S. dollar.
The government has entertained the idea of promoting the South African currency, the rand, for a larger role in Zimbabwe. Indeed last summer the chairman of FBC Holdings, Herbert Nkala, said that embrace of the rand by Zimbabwean society generally was the “easiest way forward,” and indicated that the quicker it happened, the better.
But the idea has not caught hold, in part because the rand has itself been quite volatile of late. Unfortunately, these currencies— the dollar, the rand, and the others involved — have all become scarce, leaving the country more than they return to it, creating those long queues at the banks to which the minister referred.
Valuation by the Street
In 2017, the New Zimbabwe news service reported that “even the surrogate bond notes” have been vanishing from the banks, which can offer their customers no more than $150 at a dip — and that in notes, not in the much-prized U.S dollar. The Reserve Bank of Zimbabwe responded to an earlier stage in this cash crunch by introducing bond notes, which are said not to be currency but which are intended for use as a surrogate medium of exchange.
The country of Zimbabwe has certainly had it share of problems — from war and political corruption to hyperinflation and other economic woes. While recent economic data shows that Zimbabwe may have finally timed a corner, there Is still a great deal of work to be done — and many risks to be avoided.
The good news is that Zimbabwe’s economy is growing again, after shrinking for more than a decade. While the economy steadily shrank and hyperinflation took root from 1998 through 2008, recent economic results have been much more positive. The economy grew at a respectable 5 percent rate in 2012. This figure was less than the more than 9 percent growth In 2010 and 2011. The lower growth figure for 2012 was attributed to a poor harvest and lower revenues for diamonds — a staple export for the country.
While this growth Is certainly welcome news, especially for the people of Zimbabwe, it does not mean that the country Is out of the economic woods. The country still faces a number of economic and political headwinds, including deficiencies in Infrastructure, problems with government regulation and oversight and pressure from Indigenous groups There are plenty of political pressures and risks as well — the controversial reelection of President Robert Mugabe is Just the latest example.
Those problems, In addition to the lingering effects of the Ili-advised war with the Democratic Republic of Congo In the late nineties and early 2000’s, threaten to derail the economic progress Zimbabwe has been making for the past several years.
Zimbabwe has made significant progress tagging one of the most entrenched problems in recent memory — namely hyperinflation. Prior to 2009, the Reserve Bank of Zimbabwe routinely funded its staggering budget deficit by simply printing money. This strategy did help to reduce the budget deficit, but It led to extremely high levels of inflation.
That hyperinflation led to severe spikes in the price of everyday staples like rice and bread — and a great deal of political unrest and economic uncertainty. The government of Zimbabwe chose to fight this hyperinflation by allowing outside currencies like the Botswana pula, the U.S. dollar and the South African rand to be used locally.
This change was made early in 2009, and it did help to stabilize prices and put an end to the hyperinflation that had been crippling the economy in Zimbabwe. At the same time, however, those currency change served to expose the structural weaknesses of the economy and inhibit future growth rates.
The official Zimbabwean dollar still officially exists as a currency, but for all intents and purposes It has been abandoned by the people of Zimbabwe. The 2009 law that Slowed foreign currencies from Botswana, South Africa and the United States to be used helped push the Zimbabwean dollar into irrelevancy. Consumers in the country routinely used foreign currencies for their daily transactions, and there is no sign they will end the practice anytime soon.
No matter what currency is in use, Zimbabwe is sure to face ongoing economic problems, even if the era of hyperinflation Is now officially over. Zimbabwe is still a very poor country, with an estimated GDP of Just $500 per person. The country also suffers from very low levels of official employment with a large number of people either unemployed or employed in an unofficial capacity.
The country of Zimbabwe also relies heavily on agriculture, with more than two thirds of the population employed in the laming sector. This heavy reliance on agriculture makes Zimbabwe particularly vulnerable to events like the recent poor harvest, which helped to cut the annual growth rate nearly in half.
While President Robert Mugabe, who recently one a heavily contested and very controversial reelection is optimistic about the economy and the country in general, not all share his view. Opposition leaders continue to worry about the prospects for future growth, and they fear that the old policies that led to rampant Inflation and economic chaos could return. Only time will tell which view is the correct one.
Export Trade for Zimbabwe: Adding Value
The government of Zimbabwe, like its central bank (the Reserve Bank of Zimbabwe), has come to the conclusion that the country badly needs a more vigorous export trade. There is no doubt that Zimbabwe’s export earnings have declined drastically, more than 20% in a single year, from $36 billion in 2015 to just $2.8 billion in 2016. To get an idea of the modesty of that $2.8 billion figure, consider that the country’s population is 145 million, so the whole export trade last year earned just $200 per resident.
Further, the government Isn’t concerned merely with the U.S. dollar value of exports but with, so to speak, their quality. There is an important difference between “extractive” exports (those earned simply because a country allows foreigners to come in and extract natural resources from beneath its soil) and “value-added” exports (those earned because the people of a country do valuable work and sell the fruits of that work across borders). Zimbabwe’s raw materials exports figure for 2015 was $1.439 billion, while Its intermediate goods and consumer goods exports were each less than $150 million.
The government’s Industry and Commerce Minister, Mike Bimha, recently expressed continuing concern about the export situation. “The most sustainable source of currency for Zimbabwe is not Just exports but value added exports,” he said.
Two Different Approaches
In May the RBZ issued a public notice explaining how it would help bolster the export of goods, and so would bring foreign currency into Zimbabwe and reduce the trade deficit. It offered to do so by paying exporters of goods and services up to 5% of the value of their exports as a bonus or incentives It would pay this percentage as bond notes, backed by an African Export/Import Bank facility, releasing the notes gradually and within the limit set by the Afexim bank facility of $200 million.
In 2017, the Zimbabwean government has taken another approach: It has simply loosened its export regulations. Specifically, it will no longer deem certain products to be “strategic,” thus ending the requirement that exporters of those products obtain permits. The list of strategic products used to be quite a long one: Butter, cream, gypsum, Industrial equipment and machinery, coconut oil, palm oil, and much else were all treated as “strategic.
The economic climate is dire in Zimbabwe as its national bank grapples with yet another currency crisis. Currency woes have plagued Zimbabwe for more than a decade, but na, more than ever, the country is hastening towards what many financial analysts are calling a “death spiral.”
After abandoning its national currency in due to hyperinflation, the economy has limped on using a basket of currencies to facilitate commerce, with the US dollar dominating transactions dollarization briefly stabilized the economy until exports softened and the US dollar strengthened, depleting cash reserves. The little cash that remained in the country was hoarded by merchants To combat this, in the fourth quarter, i.e. 2017, the Reserve Bank of Zimbabwe (RBZ) initiated an infusion of $200 million worth of bond notes backed by the Afexim bank. The notes have been restricted to domestic transactions and carry no international value, resulting in widespread skepticism of their sovereignty. The skepticism is warranted.