US To Supply Coins To Zimbabwe

sel_691 brings up two points,

All swapping their currency for a hard currency does is force them into a situation where they cannot keep making excuses for reneging on foreign obligations.

Second, in today's world of global fiat currencies, the simple step of dollarizing a nations paper currency really isn't a major deal. On the other hand, to forgo the right to mint a nations own coinage is a really major move. The minting of coins is a basic litmus test of sovereignty.

What do we, the 'western' world get from currency dollarization? Well, they might eventually pay their outstanding bills, for a change. So, that's a good thing.

The coins are a different story. That can go two very different ways in the short term. Either they pay 'COP' (cost of production) for the coins, or they pay 'par', the actual cash value for the coins. Depending on the breakdown of what they get, each has it's issues. Since there is no mention of 'seigniorage', there doesn't appear to be a buffer against the pitfalls of either approach.

The long term effect wouldn't seem to be very good. Countries that don't issue their own coins generally don't exist on a long term basis. It's a fairly safe bet that any move to reform the Zimbabwean economy is guaranteed by the natural resources. However, since long-term exploitation of those resources by the ruling class is one of the reasons that Zimbabwe is a mess today, (along with Mugabe's absolute ineptitude and greed), further exploitation on a global basis would appear to not help the Zimbabwe situation in either the short term or the long term.