Price Cuts Ruin Zimbabwe's Economy

Mugabe's radical 'solution' to spiraling inflation backfires
By Dustin Lushing,  Newser Staff
Posted Aug 2, 2007 10:53 AM CDT
Two women walk past empty bread baskets in a supermarket in Harare, Zimbabwe Tuesday, July, 10, 2007. The move by the Zimbabwean government to reduce prices of basic commodities by more than 50 percent...   (Associated Press)
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(Newser) – A radical attempt to curb Zimbabwe's hyper-inflation by cutting prices up to 50% has backfired on President Robert Mugabe's government, which is now teetering on the brink of collapse, the New York Times reports. Store shelves are empty; bread, sugar, and cornmeal, the staples of Zimbabwean's diet, are depleted.

Gasoline, meanwhile, is unobtainable, as manufacturing has ground to a halt and scores of workers are being laid off. Zimbabwe's economy began shrinking in 2000 because of political turmoil, capital flight, and gross mismanagement, but business says it's now near rock bottom. And the middle class, who rely mostly on retail stores, are likely to feel the brunt of the decline.