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01 / 05
Consider This Brief Look at Mugabe's Legacy

Blog Post | Economic Growth

Consider This Brief Look at Mugabe's Legacy

In Botswana incomes rose by 285% since 1980, but in Zimbabwe they declined...

They say that it is difficult to make predictions, especially about the future. Back in 2000, when Robert Mugabe started to expropriate commercial farms in Zimbabwe, thus consigning that country to economic ruin, I predicted that the good people of Zimbabwe would revolt rather than see their country go down the tubes. Sixteen years later, Mugabe is still in charge and Zimbabwe’s economy has been, by and large, destroyed. Having learned a lesson—note to Bill Kristol—I have not made another prediction since.

On the upside, Mugabe will have to die someday. According to South Africa’s Mail & Guardian, the 92-year-old has recently relinquished many of his responsibilities, works only 30 minutes a day and had his Singaporean doctors flown in to Harare for an unspecified medical procedure. Assuming that the dictator really is on his final, unlamented, leg, let us look at three highlights of his 36 years in office. (To put Mugabe’s legacy in perspective, I will compare Zimbabwe with its regional neighbors: Botswana, Namibia and Zambia.)

When Mugabe took over, life expectancy in Zimbabwe was 60.5 years. It peaked in 1990 at 63 years. Then came the HIV/AIDS epidemic and life expectancy collapsed to a low of 40.7 years in 2002. While HIV/AIDS hit the entire Southern African region, the consequences of the epidemic were particularly devastating in Zimbabwe; they were exacerbated by the collapse of Zimbabwe’s healthcare system that followed the economic meltdown, malnutrition and the spread of other communicable diseases, such as cholera and tuberculosis. Today, life expectancy remains lower than what it was 36 years ago.

Now let us look at inflation adjusted income per capita, which was $633 in 1980. Average income rose to an all time high in the mid-1990s, but then collapsed to $458. That’s a decline of 28 percent. (I have not used my favorite income data set, which adjusts not only for inflation, but also purchasing power parity, because it has no data for Botswana.) Contrast that with Botswana, where incomes rose by 285 percent. Even Zambia, which toyed with socialism in the 1970s and 1980s, is today richer than Zimbabwe. Worldwide, incomes rose by 57 percent and average income in Africa rose by 68 percent between 1980 and 2015. And, let us not forget that Mugabe’s economic mismanagement resulted in the second highest hyperinflation in recorded history. According to my Cato colleague Steve Hanke, it reached 90 sextillion percent in 2008, with prices doubling every 24.7 hours.

Last, but not least, consider political freedom. Back in 1980, Zimbabwe was hardly a liberal democracy, but Mugabe, a convinced Marxist, managed to make things much worse. He turned Zimbabwe into a one-party state and sent his North Korean-trained goons to wipe out 20,000 supporters of the opposition in the province of Matabeleland. Zimbabwe’s “democracy score” nosedived between 1980 and 2008, when Mugabe’s ZANU-PF party was forced into a power-sharing agreement with the opposition Movement for Democratic Change.

Today, Zimbabwe, once Africa’s second most sophisticated economy, is a wasteland. As the aging dictator’s hold on power slips away, Mugabe’s successor will face the unenviable task of undoing 36 years of failure.

This first appeared in Reason.

MSN | Wealth & Poverty

It Turns Out despite Avocado Toast, Millennial Wealth Is Booming

“A new report from the Center for American Progress, a left-leaning think tank, looked at how wealth changed for different age cohorts from 2019 to 2023 by analyzing data from the Federal Reserve’s Distributional Financial Accounts.

The analysis found good news for the much-beleaguered millennial generation: Their wealth grew at a historic clip.

Per CAP’s analysis, from the end of 2019 to the end of 2023, the average wealth of households under 40 grew by 49% — a $85,000 increase, to $259,000 from $174,000. The analysis said that rate of rapid wealth growth had never happened before in the data series’ history, and it came after wealth growth remained relatively stagnant for young Americans prepandemic.

Here’s the whopper: Wealth gains were even higher for just millennials, who were 23 to 38 in 2019; their wealth doubled from the end of 2019 to 2023.”

From MSN.

The Economist | Wealth & Poverty

Generation Z Is Unprecedentedly Rich

“In America hourly pay growth among 16- to 24-year-olds recently hit 13% year on year, compared with 6% for workers aged 25 to 54. This was the highest ‘young person premium’ since reliable data began (see chart 3). In Britain, where youth pay is measured differently, the average hourly pay of people aged 18-21 rose by an astonishing 15% last year, outstripping pay rises among other age groups by an unusually wide margin. In New Zealand the average hourly pay of people aged 20-24 increased by 10%, compared with an average of 6%.

Strong wage growth boosts family incomes. A new paper by Kevin Corinth of the American Enterprise Institute, a think-tank, and Jeff Larrimore of the Federal Reserve assesses Americans’ household income by generation, after accounting for taxes, government transfers and inflation. Millennials were somewhat better off than Gen X—those born between 1965 and 1980—when they were the same age. Zoomers, however, are much better off than millennials were at the same age. The typical 25-year-old Gen Z-er has an annual household income of over $40,000, more than 50% above baby-boomers at the same age.”

From The Economist.

BusinessMirror | Poverty Rates

PHL Could Hit Single-Digit Poverty Years Ahead of Schedule

“Better labor market conditions and slower inflation in the country could turn the administration’s single-digit poverty incidence aspirations into a reality two years ahead of schedule.

This was according to the latest Macro Poverty Outlook for the Philippines, released by the World Bank on Monday. It estimated that poverty incidence in the country could decrease to 9.3 percent in 2026 from 12.2 percent this year and 17.8 percent in 2021.”

From BusinessMirror.