Read More »"/> Read More »"/> Gasoline as Money in Zimbabwe | David J. Theroux
 

Gasoline as Money in Zimbabwe

Prohibited from using U.S. dollars or other currencies in the midst of hyperinflation, the people of Zimbabwe have now turned to using gasoline coupons for moneyanything but the Zimbabwean dollar. The result is that people transact in liters of gasoline, with the coupons as the currency.

Zimbabweans face acute shortages of local currency. Already gas coupons can be used to pay some household accounts. Many businesses also pay workers part of their earnings in scarce foodstuffs, or demand dollars for purchases, which is illegal.

“Where coupons become a currency, it reflects the rapidly falling value of the Zimbabwe dollar. Barter selling provides something that holds its value,” said John Robertson, an independent economist in Harare, the capital.

Other forms of barter are also common, including foodstuffs, and “obsolete” coins:

Obsolete coins also have been revalued, sending Zimbabweans hunting for coins they squirreled away in recent years.

And:

Embattled restaurants were offering discounts of up to 80 percent for either U.S. dollars or local cash because of shortages of both. They also added a penalty fee of up to 80 percent on top of the bill for those who paid by check, estimating price rises in the five days it takes a check to clear.

Businesses reported a slight upturn in transactions since Friday, despite the money crisis.

Since the new money came out, it already has fallen in value against hard currencies by about 20 percent. “The petrol coupon has a more stable value and barter works,” Robertson said.

Our new book by George Selgin, Good Money, explains how legalizing private, competitive currencies is the solution.

David J. Theroux is Founder, President and Chief Executive Officer of the Independent Institute.
Posts by David J. Theroux | Full Biography and Publications
Comments
  • Catalyst
  • MyGovCost.org
  • FDAReview.org
  • OnPower.org
  • elindependent.org