By Staff Reporter
Reserve Bank of Zimbabwe Governor Gideon Gono has has revealed that Zimbabwe could next year adopt the Chinese currency, the yuan, and ditch the globally valuable US dollar, it has been reported.
If the country goes ahead with Gono's plans, commentators say the move would be an economic disaster as it would mean Chinese direct control of Zimbabwe's economy.
"This will be a clear mismanagement of the economy, and this could define the end of Mugabe's brutal era and econonomic mismanagement. They seem to be making economic decisions on personal emotions," a commentator said.
Speaking during a Confederation of Zimbabwe Industries (CZI) end-of-year business dinner in Gweru at the weekend, Gono said Zimbabwe should not be caught napping by the Euro-zone debt crisis but should start adopting the yuan as the major currency in its multi-currency regime.
The state media qouted Gono, President Mugabe’s closest ally said: "The extraordinary happenings in Europe where economic power houses in the Euro-zone have been hit by a debt crisis deserves extraordinary measures especially here in Zimbabwe where we have adopted the US$ as the major currency in our multi-currency regime.
"With the continuous firming of the Chinese yuan, the US dollar is fast ceasing to be the world's reserve currency and the Euro-Zone debt crisis has made things even worse. As a country, we still have the opportunity to avoid being caught napping by adopting the Chinese yuan as part of consolidating the country's look East policy," he said.
The Reserve Bank Governor said it was not long ago that Zimbabwe, with its vast deposits of mineral resources and picking agriculture, would provide its former colonial master, Britain with some bail outs.
"It’s only recently when we had the startling revelations with Angola offering to bail out her former colonial master Portugal from her debt crisis. This can also happen with Zimbabwe if we choose the right path. If we continue with our Look East policy, it will not be long when we will also be volunteering to bail out Britain from her debt crisis and I will not wait for my creator's day before this happen," he said
Gono said the Look East policy was the best decision that the Government took, adding that China's currency was likely to take over the US dollar as the 21 century's world reserve currency.
"When President Mugabe and his administration came up with the Look East policy, all sorts of words were said with attacks coming from all sides. I will say it for the umpteenth time that this was the very best decision and a great vision that the President had.
"There is no doubt that the yuan, with its ascendancy, will be the 21st century's world reserve currency," he said.
The central bank boss said Zimbabwe also needed to re-strategise and come up with its local currency without necessarily ruling out the use of other currencies.
"As long as we continue to use other countries' currency where we do not have control over that currency, we are not going anywhere as a nation. At the moment the US dollar is going down the tube owing to the Euro-zone debt crisis and as a country, we are also going down the tube because we do not have control of that currency.
"The year 2012 should thus see Zimbabwe coming up with its own currency which we should be using without ruling out the multicurrency system until the economy stabilises," he said.
Gono said Zimbabwe is endowed with vast deposits of mineral resources which should help improve the economy.
"In Zimbabwe, I don't know why we continue to have other countries dictate where our economy should go when we are so rich in minerals.
"Zimbabwe and South Africa claim 80 percent of the world's platinum deposits but we continue to be crying babies despite that firm position. What we only need to do is to join hands with South Africa and form a platinum association like what the Opec did. This, we will be able to dictate prices of platinum and shift from the current scenario where others have to dictate the prices of our own resources," he said.
Turning to the 2012 budget, Gono said the US$4 billion budget and its highlights was the best Finance Minister, Tendai Biti, could do with the current fiscus.
Gono, however, said the only biggest surprise was that Minister Biti was mum on next year's elections budget.
"The 2012 budget was the best that the Minister could present but the only biggest surprise was his silence on election budget. Maybe there is a secret fund that he has for the elections because to my knowledge, elections need to be budgeted for," he said.
Gono said the other omission in the 2012 budget was failure by Minister Biti to review civil servants salaries.
"I am a civil servant as well and I was left wondering when the minister said nothing about the civil servants' cause. Maybe the minister is aware of what he is doing and we will wait as we progress," he said.