Financial problem in a country or organization of your choice Essay

Discuss the causes of a financial business in a boorish or organization of your choice and suggest some solutions. Specify the problem and the City/Country and relate to a particular study. Zimbabwe is an agricultural based economy previously known as the bread-basket of Southern Africa. In the past decade, the country experienced a drastic economic disintegration due to wide range of factors including unconstitutional land redistribution, health, decline in foreign investment funds and hyperinflation. The Zimbabwean economy is strongly intertwined with politics therefrom the political instability subsequently offset the economy. In 2000, the governance embarked on the land reform programme which upstage white commercial-grade farmers from ar fit lands so that it could be redistributed among black farmers. The experienced farmers were replaced by mostly black subsistence ones, with no farming knowledge, equipment and capital and therefore could non produce at a commercial scale .There was no agricultural export, meaning there was a loss of foreign currency macrocosm injected into the economy on a regular basis. This marked the beginning of economic downfall. Richardson (2004307). The failure of the agricultural sector which is the backbone of the economy led to the economic crisis. This meant that the governing body could not generate enough revenue to sustain its infrastructures such as the health sector. Health conditions are directly related to the poor economy. Sick workers were not able to work as much or as productively as healthy ones. Labour markets were less efficient and the market was not able to produce as much. Consequently, the economy produced far less per-worker than a similar healthy economy. This was evident in Zimbabwe by the low participation rate that at just over 35 %, as opposed to 51.08 % in the U.S. or 51.97 % in Japan. Richardson (2004289).Another contributing factor was that foreign investors also fled, due to insecurities and the government policies dictating that 51% ownership of their businesses should be locally owned. Foreign direct investment fell to zero by 2001, and theWorld Banks risk pension on investment in Zimbabwe shot up from 4 % to 20 % that year as well. Hill (2003 109). Furthermore, the Zimbabwean economy was brought down by the illicit sanctions (an order that is given to force a country to obey international laws by limiting or stopping trade with it. Merriam-Webster dictionary 2012198) imposed by the American and European superpowers. This meant that no trade was to be done with Zimbabwe. There was a sudden death of foreign currency and investment influx to the country.The U.S. and Britain fork up partially withheld financial support for Zimbabwe and there would be no access to the International Monetary Fund (IMF) because they could not pay their debt and the prevailing hyperinflationary conditions. Hill (2003 102). The causes of Zimbabwes financial problem can be mitigated by firs t achieving a political breakthrough that will depoliticize the economy. Then, land should be re-redistributed among experienced commercial farmers and train the less experienced ones to ensure a more sustainable output. There must also be a liberalisation of foreign investment regulations to attract the foreign investors. In conclusion, these suggested solutions will help to rebuild the economy and restore Zimbabwe as the bread basket of Southern Africa.ReferencesRichardson, C,J. 2004. The Collapse of Zimbabwe in the fire up of the 20002003 Land Reforms. New York Edwin MellenHill, G. 2003. The Battle for Zimbabwe. Cape Town Zebra