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Zimbabwe has just $217 in the bank

Posted By GABRIELLE LEVY, UPI.com   |   Jan. 30, 2013 at 11:25 AM   |   Comments

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Jan. 30 (UPI) -- How much does $217 buy?

A fair amount, if you're just looking at your weekly grocery bill. But if you're an entire nation? Not so much.

Zimbabwe's finance minister Tendai Biti told press that his country has just $217 in the bank after civil servants got their paychecks.

"The government finances are in paralysis state at the present moment," Biti said at a press conference in Harare, Tuesday, the Telegraph reported. "We are failing to meet our targets."

The country's dire financial straits are particularly worrisome, considering the upcoming elections planned for later this year. Biti told reporters the government plans to ask the international community for assistance.

Three out of every four Zimbabweans lives on less than £1 per day, and more than half of the workforce is unemployed.

Zimbabwe had struggled financially after a decade of hyperinflation, when President Robert Mugabe began to hand white-owned farmland over to black Zimbabweans. Thousands of farmers were kicked off their lands, harming investor confidence, slowing production to a halt, and prompting international sanctions.

In 2008, when a disputed election left the 88-year-old Mugabe's Zanu-PF party sharing power with the opposition Movement for Democratic Change, the hyperinflation was slowed and Zimbabwe experienced two years of now-slowing strong growth.

"Despite better-than-expected revenue performance, central government operations recorded a cash deficit of 0.6 per cent of GDP in 2011 and domestic arrears accumulation of about 1 per cent of GDP, due mainly to two salary increases that raised employment costs by 22 per cent, crowding out social and capital investment," the International Monetary Fund said in an annual report.

"The effect of the salary hikes was compounded in early-2012 by an increase in employee allowances and unbudgeted recruitment," it added in its report.

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