Monday, June 26, 2006

Sad state of affairs continues in Zimbabwe

The ovetures made toward expatriated white farmers from the Zimbabwean government have turned out to be hollow:

Zimbabwe's white farmers' union has given warning of an impending "humanitarian catastrophe" after the government reneged on a promise to pay evicted white farmers the full value of the buildings and equipment seized along with their farms, leaving many of them destitute. ...

"They are waiting until people are desperate and then offering them between two and 10 per cent of what it would fetch at auction," said Mr Gifford.

It's a wonder that any whites remain in the country at all. Zimbabwe's unemployment rate is 80%, a quarter of the population has AIDS, and GDP is contracting at 7% a year. Even though two-thirds of the country's workforce is involved in agriculture, Zimbabwe is now a net food importer. After losing white farmers and seeing production drop drastically (tobacco, the biggest export earner, has seen production fall to less than one-third of what it was in 2000), it appeared Mugabe might be trying to entice the white farmers back in. But more reneging on promises that were already unfavorable for whites is showing Mugabe to be completely untrustworthy.

The compensation scheme put forth by the government is extortion. Zimbabwe's inflation rate has topped 1000% per year. Basic goods and services nominally cost ten times more than they did a year ago. The best protection against inflation is owning real assets. The grossly reduced payouts by the government are even more worthless than they seem. They're staggered, and as time passes the buying power they represent declines dramatically:
Ken Fraser, 59, said he was called to a "compensation hearing" on Thursday at which he was offered Zim$14.7 billion (£25,000) for one of the five farms he once owned. "What they were offering me was quite ridiculous," said Mr Fraser, who was almost beaten to death by "war veterans" two years ago.

"We had a shed put up there about five years ago that was worth Zim$13.9 billion
(£23,000), but that's what they are offering me now for the entire farm." He lives on savings and some income from contract work and has refused to leave his last house.
Of course the real loser here is going to be Zimbabwe. The disempowering of whites in Africa has been terrible for Africans. When a place falls into the clutches of groups antagonistic to the productive classes, an exodus of human capital ensues. We've witnessed it firsthand in Cuba, it's going on in Zimbabwe, and it's taking place in Iraq.

There are alarming anecdotal tales of the same thing beginning to happen in the US, although I've not seen them quantified. There's no reason for the US to take such a risk. Although there are pockets in the urban core and increasingly in the Southwest, we do not have huge numbers of relatively destitute groups pushing for robin hood-style plundering. But we are sliding in that direction. We need to completely halt the importation of net-liability immigration and set up an enforceable merit immigration system that brings in only those that are going to increase the standard of living and contribute to US productivity gains. Further, we should consider the implementation of a national sales tax and a scrapping of or reduction in income taxes to make the US a more attractive place for research and production investment and make our economy less reliant on the perpetually increasing consumption of cheap consumables.


1 comment:

JSBolton said...

Those are good suggestions; and the term 'net liability immigration' is definitely useful.
It is rare that anyone publishes an abstract term which reminds us that such a class of immigrants is present.