ASSESSMENTS

As Its Economy Worsens, Zimbabwe Teeters on the Edge of Chaos

Dec 5, 2019 | 10:00 GMT

A man displays his new two-dollar notes of the Zimbabwe dollar.

A man displays Zimbabwe's new two-dollar banknotes on Nov. 12. The Zimbabwean government recently introduced small-denomination notes to help mitigate ongoing cash shortages across the country.

(JEKESAI NJIKIZANA/AFP via Getty Images)

Highlights

  • President Emmerson Mnangagwa's attempts to attract more foreign investment into Zimbabwe's mining sector could eventually help relieve the country's dire economic crisis.
  • In the meantime, dire revenue shortages and spiraling inflation will increase the risk of destabilizing protests and labor strikes, as well as potential power struggles within the government.

2020 looks to be another trying year for Zimbabwe as a foreign currency shortage continues to ravage the country’s import-reliant economy. In January, fuel and food shortages spurred angry protests that ended in a violent security crackdown. President Emmerson Mnangagwa's administration has since tried to address Zimbabwe's systemic economic weaknesses by floating and reshaping its currency, as well as restricting the use of the U.S. dollar -- though so far, to no avail. Desperate for revenue, the government is also now attempting to ramp up mining investments. But the windfall from such efforts will take years to materialize -- years Mnangagwa's administration may not have, especially if Zimbabwe's deteriorating living conditions end up turning his own security forces against him....

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