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. Last Updated: 07/27/2016

In Zimbabwe, It's Pass the Buck

JOHANNESBURG, South Africa -- For years, Zimbabweans have stoically accepted the convolutions of government economic policies that, most experts agree, have led to quadruple-digit inflation and impoverishment.

Zimbabwe's more affluent classes, however, may not be so complacent.

Only days after the government devalued its currency by 60 percent last week, the suburban Harare plantation of Gideon Gono, the chief of Zimbabwe's reserve bank, suddenly went up in flames on Friday. Gono is the public face of the drastic new policies imposed last week and a close adviser to Robert Mugabe, Zimbabwe's authoritarian president since the nation became independent in 1980. The fire, which the police have called suspicious, is seen as one sign of the bitter opposition to the latest economic moves among the wealthy -- who, uncharacteristically, have much to lose this time.

The most visible change announced last week was a revaluation of Zimbabwe's currency, which has been rendered almost worthless by years of inflation that now exceeds 1,200 percent per year. The revaluation knocked three zeroes off bank notes, changing the 20,000 Zimbabwean dollar bill into a 20 dollar bill. The bill's actual value -- 10 U.S. cents at official rates and less than 3 cents at current black-market rates -- remains unchanged.

Weary Zimbabweans, who must lug satchels of money to make even ordinary purchases, might applaud the move, which would lessen their burden. But Gono gave holders of the old bank notes only three weeks to exchange them for new ones. And he placed draconian limits on the amount they could trade in: Individuals can exchange less than $150 per day at black-market rates, and companies are limited to a bit over $7,000.

That struck directly at those who hoard large stacks of bank notes -- principally, the wealthy who have benefited hugely from trading in Zimbabwe's black market in currency and other goods, and who cannot expose their riches by placing them in banks. Since the policy change last week, according to news reports, Zimbabwe has seen an explosion in purchases of automobiles, appliances and other luxuries as hoarders seek to convert their cash into goods.

The police have confiscated billions of Zimbabwean dollars at roadblocks set up outside Harare and other big cities, and scores of people have been arrested for violating currency laws. Border guards were reported to have confiscated more than 100 billion dollars in old currency being smuggled back into the country.

But the greatest fallout, perhaps, has been political. Stunned members of Mugabe's Cabinet, many of them wealthy by Zimbabwe standards, were reported to have sat on their hands when Gono announced the new currency policies in a July 31 speech. Zimbabwe's few independent newspapers have reported bitter infighting in Mugabe's inner circle between supporters of Gono and opponents who suspect that the new policies, dubbed "Operation Sunrise," are aimed at crippling them financially and politically.

"It has aroused much bitterness and resistance in the upper classes,'' said Eldred Masunugure, chairman of the political science department at the University of Zimbabwe in Harare. There is talk, he said, that Gono "may be strategically locating himself for succession to President Mugabe," who is scheduled to retire in 20 months.

Mugabe has made clear his support for Gono's policies. His state security minister, Didymus Mutasa, warned this week that anyone who attempted to harm Gono would be "acting against the interests of the government and its people," and would be brought to justice.

Once one of Africa's richest nations, Zimbabwe was recently nominated by a panel of United Nations experts for the status of "least-developed country," a badge of economic failure.

John Robertson, a Harare economist, said the currency change was mostly cosmetic. "You might say we've moved from millimeters to meters,'' he said, referring to the 1,000-to-1 revaluation. "But the rest of the world is still using kilometers. We have a long way to go."