Though Sri Lanka and Zimbabwe are thousands of miles apart and are on two separate continents, but our economic policies have so much in common with that country, that it is uncanny.
The readers of this column are no strangers to Zimbabwe as we have tried to keep a regular update on what is happening there due to the similar, crisis creating, economic policies that are adopted by the two countries.
We first took readers to Zimbabwe in October 2004 in the Thrift Column – DÃ©jÃ vu . At the time Zimbabwean T-bill yields were 162.85 percent and overnight rates 189 percent. The Zimbabwe dollar was ‘officially’ at 5,616 to the US dollar, down from 4,196 in January 2004. Inflation is going ‘down’ and was 314 percent in August 2004.
What is the situation now?
Inflation in May 2006 inflation was 1193 percent. The ˜official’ exchange rate is 101,195 to the dollar, and the government is merrily printing money, to a much greater extent than we did during the infamous Rata Perata period or we are now doing under the Mahinda Chinthana.