Inflows from Zimbabwe to South Africa - Essay Example

The African continent has countries of which most of them are living in extreme levels of poverty. One of the African countries with a better economy, even though there are still living below the national level of poverty of the federal government in South Africa. Zimbabwe is a country located within the borders of South Africa. In this country, the economy is facing disastrous hyperinflation of 4530% and an 80% unemployment rate (Wines, 2007). 
Thousands of desperate persons from Zimbabwe are migrating to South Africa every week. South African cannot support a load of many more people since their economy is not doing that well itself. The immigration authorities are deporting 3900 Zimbabwean every week (Wines, 2007). To put in perspective the effect the incredible inflation has on the time value of money of the Zimbabwe currency a person that used to make $9 month in salary is now making $2 (Wines, 2007). A hyperinflation event causes great human suffering since people become desperate and frighten that from one day to another their money is losing 12% of the value daily meaning that the next they might not be able to buy the primary necessity goods such as food and medicine.

Hyperinflation is one of the worst economic systems any economic system could face. In the 1980s the Latin American country of Argentina 1980’suffered through a prolonged hyperinflation era which destroyed the economic system of this nation. The Zimbabwe crisis is even worst than what in Argentina since that nation was not living sub-human levels of poverty such as the people of Zimbabwe were experiencing even prior that the economic chaos there are currently encountering. The current hyperinflation state of Zimbabwe compares with some of the world cases of hyperinflation in world history.

Some of the most famous hyperinflation cases are illustrated in the table below: The graph below shows a comparative analysis of countries with normal inflation, high inflation under normal parameters, and hyperinflation. The average inflation in the European Union in 2006 was 3.1% and in Puerto Rico in 2007 was 11.6% (Completelandlord, 2007). The Zimbabwe economic state is causing panic and as of right now has no immediate solution. The root of the problem which is causing the chaotic state in terms of economic status and social humanistic effects in Zimbabwe include factors such as the above 80% unemployment rate, the weak industry productivity which is operating at 30%, and the fact the country cannot produce or import enough food to feed its people.