Hungry Jacarandas: 2. The Value of Money

The most worthless piece of metal on this planet!

It was a Sunday and Mrs. Anita Bose (who I had briefly introduced to my readers in the – well – Introduction) had called me home for dinner. Mashima, as i called her, would do this at the faintest opportunity. Motherly as she was, she realized that the cooking prowess of Thomas, our designated cook, was rather shallow at best. That evening Toton-da – Mashima’s youngest son – had called over a few of his friends and their family for dinner. For those who had access to foreign currency – US Dollars or South African Rand – alcohol was dirt cheap in Harare and the vodka was flowing well that evening. “You heard this joke about Mugabe having this dream?”, asked Arif, a Chartered Accountant as he shifted his drink from one hand to the other. He wasn’t expecting an answer and continued his narration. “Well, Mugabe  dreamt he was going to the local Spar to buy stuff with a wheelbarrow full of money. Two thugs come out of nowhere and mugged him. And they fled with just the wheelbarrow”. Strangely, Arif did not laugh at the joke and neither did anyone else. We all shifted nervously, reaching for our drinks or the chips. The complete uselessness of the local currency was not a matter that evoked any hint of mirth – however nervous.

I had read stories of hyperinflation in Germany in the nineteen twenties. The Deutsche Mark notes were so useless, housewives in Berlin burned them instead of firewood to keep the house warm. The Zimbabwe Dollar came very close. The economy was quite fine to start with at independence and the Dollar (it would have been politically incorrect to name the new currency a Pound, I presume) was pegged at the exchange level of the Great Britain Pound. It was in 1992 that the first exchange rate crisis happened and things went pear shaped. I am not a student of economic history and hence ignorant what caused the problem then, but the hyperinflation of the 2000s was squarely created by trade imbalances. Mugabe’s policy of grabbing farmland from the world’s most productive farmers – the whites in Zimbabwe – and handing them over to the indigenous population resulted in severe shortage of food, especially foodgrains. There wasn’t enough to eat at home, forget exports. But forgetting exports has its consequences – namely a shortage of foreign currency and hence a depreciating domestic exchange. The double whammy came from a supply side driven food inflation. The indigenous population did not know how to farm. “You know what the old man’s propaganda machinery has blamed it all on, Sub?”, Ezekiel Bopoto, or Bops, asked rhetorically. “The two consecutive years of solar eclipse visible from Zimbabwe! God’s doing this apparently, not the old man”. Bops would rock as he laughed. He was six four and weighed at least two hundred pounds, every bit of it muscle. You would not have seen a more gentle giant – trust me. But I wasn’t sure if it was proper for me to join Bops in the laughter

Five hundred Dollars. That was the largest denomination that currency notes came in Zimbabwe – at least till September 2002 (the notes were called Ferrari. They were red and went fast!). A loaf of bread would cost about five thousand dollars. One fine afternoon in Harare, larger denomination notes suddenly started going around in premium. Please do not misunderstand this as a figure of speech – that was not my intent. Five hundreds were impossible to get and people were willing to pay more than the intrinsic value to get those notes. Stanley Mpofu, boys from our consulting team called him StanMan, one day narrated to me over lunch how people had started bargaining with the bank for a higher interest rate for deposits made in all five hundreds. And their negotiation of interest rate was not something how we traditionally understood usance. “I will give you a hundred thousand in all five hundreds. I want the deposit to show a hundred and twenty thousand credit” – that was the deal. Stan, the ever simple man that he was, actually went up to Sethuraman, my colleague and asked Sethu if he knew how the additional twenty thousand should be accounted for in the core banking software! With all the five hundreds gone to Banks, and the banks hoarding them because the value of those notes were going up by the passing minute, all that remained on the streets were fives, tens, fifties and a few sporadic hundreds

Immanuel, another gentle giant, would ferry us between the two campuses of the Bank in a Mitshubishi Pajero. Zimbabweans had this thing about imported cars. Soumitro Ghosh, an economist working for the World Bank had once told me how imported cars are used as the only hedge against inflation in Zimbabwe. But we digress from an incident that has been seared in my mind. One day my colleague Ranjit Nair and I were in the car when Immanuel wanted to go the BP Bunk to get a fill up. Fuel was scarce, not to mention prohibitively expensive, but this gas station had a special arrangement with the Bank. A black board hung near the window of the small room next to the pump tills – that’s where people paid after their purchase. Scrawled on that board in white chalk were the curious words – “Only one denomination please”. Just below the window, on the other side, was a young boy manning a weighing scale. Immanuel pulled out a outsized brownpaper bag from the boot, went up the window, bent down low to level his head with the window and said “All tens”. He then placed the bag on the weighing scale. I peeped into the window – whatever Immanuel’s big size would allow – and saw two small boys at the back of that room sorting out notes into piles. They were more than ankle deep in currency notes. It is a pity smartphones with cameras were not around then but even today when I chat with Ranjit – now settled in Chicago – this invariably comes up

Mt. Nyangani – the highest peak in Zimbabwe. On a clear day all cities of the country can be seen from this spot

Thomas, the gardener cum cook, was paid by the Bank. One day Thomas walked up and said that he needed to be paid more frequently than at the end of every month. He never studied economics – I don’t think he studied anything at all for that matter – but was astute to understand that inflation erodes purchasing power. Hyperinflation obliterates it. The Bank agreed to pay him weekly wages, which was only fair since prices fluctuated – rather, only went up – with mind numbing frequency. I was out one weekend with Abhijit Ghosh – my colleague – and his wife Shoma and we went in to Nando’s to grab a chicken lunch. Nando’s had replaced all their price lists with black boards on which they would write the prices with color chalks. That day we were chatting amongst us, making up our minds on what to eat when the queue stalled with two men ahead of us at the counter. The girl had stopped taking orders because one of her colleagues had just climbed up a ladder, wet cloth in hand. She wiped out all the prices and was painstakingly writing the new ones. Clearly, the price of Nando’s Special Peri-Peri Chicken Wings at Mount Pleasant, Harare had started imbibing behaviour of a volatile stock trading on the New York Stock Exchange

“Have you seen the latest, Sub?”, Bops was standing at the door to our office in the Bank. Not quite an individual office – it was a large room where three of us had our desks. He was holding up a pale green bank-check like instrument between his thumb and forefinger. “A bearer bond issued by the Reserve Bank of Zimbabwe. Fifty thousand dollars denomination. And you know what this one instrument by itself can purchase?”, Bops had this naughty smile and tilt of the head that he did just before saying something funny. “A copy of the evening news paper”

The photograph at the beginning of this post is that of a fifty Zim cent coin from my collection. Before the original Zim Dollar was replaced with a new rebased currency, you would had to place 300 trillion of these coins one atop the other to get one US Dollar at the prevailing exchange rate. The coins are about 2mm thick. You know where I am going with this, right? That stack of coins would measure 745,645,431 miles. Think of this number

  • this is 1561 round trips from the earth to the moon
  • 29,943 times around the circumference of the earth
  • a beam of light traveling from the base of this stack will take one hour and six minutes to illuminate the top-most fifty cent coin

All this for one US Dollar

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  1. Ezekiel Bopoto

     /  February 2, 2013

    Subrata, this is a well written account of what transpired during your stay in Harare, Zimbabwe more than 10 years ago. I did not know that I am such a good actor why don’t you get this scripted into a short movie we could make a few dollars (not Zim Dollars of course) from this project my brother.

    • Bops my brother – such a pleasure hearing from you! I am afraid my creative capability stops miles short of writing a movie script! I’d be happy if I were able to the chronicle some of the extraordinary stuff I witnessed during my stay at Harare – one of the best years of my life. No small measure for that feeling must rest on the fantastic people – like you Bops – that I had the luck to meet. I hope to return one day to Harare and show my wife and son around beautiful Zimbabwe


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