Friday, November 4, 2011

Is Greece an "African" country.

Am I the only one who has noticed the uncanny and eerie similarity between the economic woes of Greece and the precarious financial positions of African States like Zimbabwe and Uganda in the late 80s. Is Greece now an "African" country ~  an economic ward-of-state that must be told what to do as if it were a child? The similarities between, say, the Greek financial condition and that of Zimbabwe in 1989 are frighteningly similar: Greece has a service-economy dependent on shipping and tourism; by virtue of it being in the EuroZone, Greece is burdened with an overvalued currency that plays havoc with its economic strengths; and Greece is technically insolvent, unable to pay its bills. Furthermore -- like a real African country -- there has been rumblings in the barracks with the Prime Minister being forced to replace the military service chiefs with his "own men".

Zimbabwe in 1989 had an overvalued currency (the old Zim Dollar) that was playing havoc with its economic strengths. Forced to fund  a progressive health and education program, the Zimbabwe Govt found itself in a precarious situation, but what really keeled the fiscus over was the cost of a debilitating war in neighbouring Mozambique that had sucked in 10 000 troops. Unable to pay its bills, the Zim Govt was forced to call in the IMF. The medicine they prescribed is well-known to most Africans over 35 (and too scary to repeat here).

Eerily the Greeks are being served the same rat-poison of massive cuts in Govt-spending and social-service that we Zimbabweans were forced to swallow from 1989-1991 (the dreaded E.S.A.P reforms). As in Zimbabwe, there has been massive emigration of the best and brightest Greeks to wealthier shores and better opportunities abroad. The only solution for the Greeks is to exit the EuroZone, re-introduce the Drachma, and craft their own economic policies. After that I'm sure Greece will rebound in the long-run, but in the short-term there will be immense economic-pain.

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