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Zimbabwe authorities mix charm with force in an attempt to shore up the world’s newest currency

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Zimbabwe authorities mix charm with force in an attempt to shore up the world’s newest currency
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Zimbabwe authorities mix charm with force in an attempt to shore up the world’s newest currency

2024-05-26 13:25 Last Updated At:13:31

HARARE, Zimbabwe (AP) — The introduction of the world's newest currency in April inspired a reggae artist to record a song praising the ZiG, or Zimbabwe Gold.

The catchy tune, titled “Zig Mari,” received generous play on state television and radio. The musician, Ras Caleb, received a car and $2,000 — ironically paid in greenbacks, not the new ZiGs — from a businessman with close ties to Zimbabwe's ruling party and President Emmerson Mnangagwa; he said he wanted to reward an act he considered “patriotic.”

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Street cleaners walk past people waiting in a bank queue in Harare, Zimbabwe, Thursday, April 25, 2024. Zimbabwe introduced the world's newest currency in April introduced the world's newest currency in April, the ZiG, or Zimbabwe Gold. (AP Photo/Tsvangirayi Mukwazhi)

HARARE, Zimbabwe (AP) — The introduction of the world's newest currency in April inspired a reggae artist to record a song praising the ZiG, or Zimbabwe Gold.

Street vendors hold the new currency note called the ZiG, in Harare, Zimbabwe, Tuesday, April 30, 2024. Authorities in Zimbabwe are resorting to force to defend the new currency, including packing jail cells with dozens of street currency dealers and freezing accounts of hordes of businesses accused of undermining the value of the ZiG. (AP Photo/Tsvangirayi Mukwazhi)

Street vendors hold the new currency note called the ZiG, in Harare, Zimbabwe, Tuesday, April 30, 2024. Authorities in Zimbabwe are resorting to force to defend the new currency, including packing jail cells with dozens of street currency dealers and freezing accounts of hordes of businesses accused of undermining the value of the ZiG. (AP Photo/Tsvangirayi Mukwazhi)

An elderly man waits to withdraw cash from a bank in Harare, Zimbabwe, Tuesday April 30, 2024. Zimbabwe introduced the world's newest currency in April introduced the world's newest currency in April, the ZiG, or Zimbabwe Gold. (AP Photo/Tsvangirayi Mukwazhi)

An elderly man waits to withdraw cash from a bank in Harare, Zimbabwe, Tuesday April 30, 2024. Zimbabwe introduced the world's newest currency in April introduced the world's newest currency in April, the ZiG, or Zimbabwe Gold. (AP Photo/Tsvangirayi Mukwazhi)

Street currency dealers cover their faces while making a court appearance at the magistrates courts in Harare, Zimbabwe, Thursday, April 25, 2024. Authorities in Zimbabwe are resorting to force to defend the new currency, including packing jail cells with dozens of street currency dealers and freezing accounts of hordes of businesses accused of undermining the value of the ZiG. (AP Photo/Tsvangirayi Mukwazhi)

Street currency dealers cover their faces while making a court appearance at the magistrates courts in Harare, Zimbabwe, Thursday, April 25, 2024. Authorities in Zimbabwe are resorting to force to defend the new currency, including packing jail cells with dozens of street currency dealers and freezing accounts of hordes of businesses accused of undermining the value of the ZiG. (AP Photo/Tsvangirayi Mukwazhi)

Street currency dealers make a court appearance at the magistrates courts in Harare, Zimbabwe, Thursday, April 25, 2024. Authorities in Zimbabwe are resorting to force to defend the new currency, including packing jail cells with dozens of street currency dealers and freezing accounts of hordes of businesses accused of undermining the value of the ZiG. (AP Photo/Tsvangirayi Mukwazhi)

Street currency dealers make a court appearance at the magistrates courts in Harare, Zimbabwe, Thursday, April 25, 2024. Authorities in Zimbabwe are resorting to force to defend the new currency, including packing jail cells with dozens of street currency dealers and freezing accounts of hordes of businesses accused of undermining the value of the ZiG. (AP Photo/Tsvangirayi Mukwazhi)

Although money typically doesn't require publicity, Zimbabwe's sixth national currency in 15 years needs all the help it can get.

Desperate to halt a money crisis underlining the country’s economic troubles, the government launched the gold-backed ZiG, the latest attempt to replace the Zimbabwe dollar, which had been battered by depreciation and often outright rejection by people unwilling to put their faith in it.

Senior officials from the Reserve Bank of Zimbabwe and the ruling ZANU-PF party embarked on a flurry of public rallies and meetings to encourage the skeptical population to now embrace the ZiG ahead of the U.S. dollar — also legal tender in the southern African nation. Commercial jingles heralding the currency flooded the airwaves along with Caleb's single.

Yet despite the charm offensive, the ZiG is facing a familiar problem: public mistrust and structural barriers that have people still clamoring for U.S. dollars. Although the ZiG has largely held its value on the official market, it has tumbled on the black market, where $1 can be exchanged for up to 17 ZiGs.

Authorities are also using force to prop up the new banknotes. They have packed jail cells with dozens of street currency dealers, and frozen the accounts of businesses accused of undermining the ZiG.

Law enforcement agents have arrested more than 200 street currency dealers on allegations of flouting foreign currency exchange regulations, national police spokesman Paul Nyathi said. The government accuses them of undermining and devaluing the new currency by using exchange rates higher than the official one.

Twin brothers Tapiwa and Justice Nyamadzawo, 24, were arrested two weeks after the launch of the new currency after allegedly selling undercover detectives cellphone airtime worth $10 at a rate of 15 ZiGs per dollar, according to court papers. The official exchange rate was just over 13 ZiGs per dollar. Like other currency traders, the twins were denied bail and remain in pretrial detention on charges that carry a maximum prison term of 10 years.

The crackdown is incongruous, because Zimbabwe has a long history of street currency dealers whose unofficial rates often carry the day. Many shops and merchants also ignore the official rate and only accept the local currency at their own rates. And many vendors, particularly in the unlicensed sector that employs more than 80% of adult Zimbabweans, still only accept the dollar.

What's more, the government has allowed some businesses, such as gas stations, to refuse to accept the ZiG in favor of U.S. dollars. Some departments, like the office that issues and renews passports, also accept only greenbacks. Many others still list their fees in U.S. dollars, although they accept the equivalent in local currency.

The government has announced fines up to 200,000 ZiG or about $15,000, for businesses that fail to stick to the official exchange rate. Authorities have also frozen bank accounts of some businesses on accusations of rejecting the new currency or trading using exchange rates higher than the official rate. The Reserve Bank didn't name the affected businesses.

Zimbabwe has a long and tumultuous history of monetary instability. The ZiG is the sixth currency used following the spectacular 2009 collapse of the Zimbabwe dollar amid hyperinflation of 5 billion percent, one of the world’s worst currency crashes.

The government printed a 100-trillion Zimbabwe dollar banknote to keep up with spiraling prices that saw a loaf of bread going for more than 500 million Zimbabwe dollars.

John Mushayavanhu, the governor of Zimbabwe's central bank, has hyped the ZiG as a first step toward eventual de-dollarization. The U.S dollar accounts for more than 80% of transactions in the country, according to Mushayavanhu, who wants the ratio to be 50% by 2026.

But for now, the allure of the almighty dollar remains. Across Zimbabwe, it is widely used for paying rent, school fees and to buy groceries. Many citizens, including government workers, take their local currency earnings to the black market to trade for dollars.

The government has said it is working on mechanisms that include opening bureau de changes for individuals to access dollars “for small transactions.” Economists and business groups have warned, meanwhile, that the use of force is unlikely to lead to more confidence in the ZiG or halt the black market traders.

“They will work to ensure that the police do not catch them,” Sekai Kuvarika, the chief executive of the Zimbabwe National Chamber of Commerce, told a hearing of parliament’s finance and industry committees.

Street currency dealers holding wads of money and openly soliciting for clients were a feature of Zimbabwe's urban architecture for years. They have deserted their familiar spots since the crackdown began in April and appear to have taken their business underground.

Many now use social media and instant messaging platforms such as WhatsApp and Facebook to connect with customers.

Maxwell Chisanga, 28, a resident of the capital, Harare, said a shop where he works pays him in ZiGs, but he needs U.S. dollars for everyday transactions.

“My landlord needs her rent in dollars so I have no choice but to look for it on the black market,” Chisanga said.

Economist Prosper Chitambara said lack of faith in the local currency and demand for U.S. dollars will continue driving the black market despite the crackdown.

“The solution is to build public confidence in the local currency. Otherwise, arrests will not work as long as people are hungry for U.S. dollars, which they cannot get from official channels,” Chitambara said.

AP Africa news: https://apnews.com/hub/africa

Street cleaners walk past people waiting in a bank queue in Harare, Zimbabwe, Thursday, April 25, 2024. Zimbabwe introduced the world's newest currency in April introduced the world's newest currency in April, the ZiG, or Zimbabwe Gold. (AP Photo/Tsvangirayi Mukwazhi)

Street cleaners walk past people waiting in a bank queue in Harare, Zimbabwe, Thursday, April 25, 2024. Zimbabwe introduced the world's newest currency in April introduced the world's newest currency in April, the ZiG, or Zimbabwe Gold. (AP Photo/Tsvangirayi Mukwazhi)

Street vendors hold the new currency note called the ZiG, in Harare, Zimbabwe, Tuesday, April 30, 2024. Authorities in Zimbabwe are resorting to force to defend the new currency, including packing jail cells with dozens of street currency dealers and freezing accounts of hordes of businesses accused of undermining the value of the ZiG. (AP Photo/Tsvangirayi Mukwazhi)

Street vendors hold the new currency note called the ZiG, in Harare, Zimbabwe, Tuesday, April 30, 2024. Authorities in Zimbabwe are resorting to force to defend the new currency, including packing jail cells with dozens of street currency dealers and freezing accounts of hordes of businesses accused of undermining the value of the ZiG. (AP Photo/Tsvangirayi Mukwazhi)

An elderly man waits to withdraw cash from a bank in Harare, Zimbabwe, Tuesday April 30, 2024. Zimbabwe introduced the world's newest currency in April introduced the world's newest currency in April, the ZiG, or Zimbabwe Gold. (AP Photo/Tsvangirayi Mukwazhi)

An elderly man waits to withdraw cash from a bank in Harare, Zimbabwe, Tuesday April 30, 2024. Zimbabwe introduced the world's newest currency in April introduced the world's newest currency in April, the ZiG, or Zimbabwe Gold. (AP Photo/Tsvangirayi Mukwazhi)

Street currency dealers cover their faces while making a court appearance at the magistrates courts in Harare, Zimbabwe, Thursday, April 25, 2024. Authorities in Zimbabwe are resorting to force to defend the new currency, including packing jail cells with dozens of street currency dealers and freezing accounts of hordes of businesses accused of undermining the value of the ZiG. (AP Photo/Tsvangirayi Mukwazhi)

Street currency dealers cover their faces while making a court appearance at the magistrates courts in Harare, Zimbabwe, Thursday, April 25, 2024. Authorities in Zimbabwe are resorting to force to defend the new currency, including packing jail cells with dozens of street currency dealers and freezing accounts of hordes of businesses accused of undermining the value of the ZiG. (AP Photo/Tsvangirayi Mukwazhi)

Street currency dealers make a court appearance at the magistrates courts in Harare, Zimbabwe, Thursday, April 25, 2024. Authorities in Zimbabwe are resorting to force to defend the new currency, including packing jail cells with dozens of street currency dealers and freezing accounts of hordes of businesses accused of undermining the value of the ZiG. (AP Photo/Tsvangirayi Mukwazhi)

Street currency dealers make a court appearance at the magistrates courts in Harare, Zimbabwe, Thursday, April 25, 2024. Authorities in Zimbabwe are resorting to force to defend the new currency, including packing jail cells with dozens of street currency dealers and freezing accounts of hordes of businesses accused of undermining the value of the ZiG. (AP Photo/Tsvangirayi Mukwazhi)

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Dagestan, in southern Russia, has a history of violence. Why does it keep happening?

2024-06-24 23:56 Last Updated At:06-25 00:00

Over the years, Russia's southern republic of Dagestan, located in the North Caucasus region, has been beset by extremist violence. This weekend, there was more bloodshed.

Officials say five gunmen in the regional capital of Makhachkala and the city of Derbent opened fire at Orthodox churches and two synagogues, as well as a police post, killing at least 20 people before being slain by authorities.

The large-scale and coordinated assault raises difficult questions for the Russian authorities about continued security lapses, especially after an attack claimed by an affiliate of the Islamic State group at a Moscow-area concert hall in March killed 145 people.

A look at the volatile region:

Dagestan, which sits in the North Caucasus between Chechnya and the Caspian Sea, is known as one of Russia’s most diverse — but volatile — regions.

There are more than 30 recognized ethnic groups and 13 local languages granted special status alongside Russian.

The region has seen its population boom in recent years, reaching 3.2 million in 2024.

About 95% of the population identifies as Muslim, according to Russian government statistics, but the region also has long-standing Christian and Jewish communities. The Jewish community dates to the 5th century.

It has been blighted by violence since the early 2000s, when militant insurgents taking part in separatist wars in neighboring Chechnya were pushed into the region as a result of pressure from Russian security forces and iron-fisted Chechen leader Ramzan Kadyrov.

Bombings, attacks on police and kidnappings — all blamed on extremists — were commonplace in the region more than a decade ago,

The bloodshed eased as tougher security measures were imposed before the 2014 Winter Olympics in Sochi, and thousands of militants were believed to have left for Syria and Iraq to fight alongside Islamic State extremists there.

The COVID-19 pandemic and Russia's invasion of Ukraine also has kept violence down. said Harold Chambers, a political and security analyst specializing in the North Caucasus.

But the region remains restive.

Activists in Russia say ethnic minorities are serving in Ukraine in disproportionate numbers, and videos circulated in October 2022 of protests in Dagestan over complaints that its population was providing more recruits than elsewhere.

In a sign that extremist sentiments still run high, mobs rioted at Makhachkala's airport in October, targeting a flight from Israel. Hundreds of men, some carrying banners with antisemitic slogans, rushed onto the tarmac, chasing passengers and throwing stones at police. More than 20 people were hurt — none of them Israelis.

The attacks took place Sunday night in the city of Derbent and the regional capital of Makhachkala. A group of armed men attacked a synagogue and an Orthodox church in Derbent, the Interior Ministry said.

The Russian Jewish Congress said the attackers opened fire and set the building ablaze using Molotov cocktails less than an hour before evening prayers. Many of the victims were private security guards and police who had provided extra security for worshippers after the Makhachkala airport incident involving the flight from Israel.

At the church, attackers slit the throat of the Rev. Nikolai Kotelnikov, a 66-year-old Russian Orthodox priest, before setting the church ablaze, according to Shamil Khadulayev, deputy head of a local public oversight body. The attack came on the day the Orthodox faithful celebrated Pentecost, also known as Trinity Sunday.

Almost simultaneously, reports appeared about an attack on a church, synagogue and a traffic police post in Makhachkala, some 120 kilometers (about 75 miles) to the north.

Russia’s Anti-Terrorist Committee said at least five gunmen were killed.

Chambers says several factors contribute to the unrest in Dagestan, including sympathizers to the Ukrainian cause and Russia's “continuous, tightening repression — particularly in the wake of the large-scale anti-mobilization protests in September of 2022,”

He also says a "long-term trend of youth radicalization contributed to what we saw in Makhachkala and Derbent.”

So far, no group has claimed responsibility for the attacks.

Telegram channels associated with the Islamic State affiliate group that carried out the Moscow concert hall massacre praised Sunday's attack by “our brothers from the Caucasus,” but did not mention its own involvement.

Dagestan Gov. Sergei Melikov blamed Islamic “sleeper cells” directed from abroad, but didn’t give any other details. He said in a video statement that the assailants aimed at “sowing panic and fear,” and attempted to link the attack to Moscow’s military action in Ukraine — but also provided no evidence.

President Vladimir Putin had sought to blame the Crocus City Hall attack in March attack on Ukraine, again without evidence and despite the claim of responsibility by the Islamic State affiliate. Kyiv has vehemently denied any involvement.

Dagestan’s violent history means the area has a heavy security presence, said Mark Youngman, the founder of Threatologist, which analyzes Eurasian security risks and specializes in the North Caucasus. Nonetheless, the response was slow, with different state agencies giving conflicting accounts as events unfolded.

“If you’re looking at it from a security perspective, you should have concerns because you have a high number of security service casualties,” Youngman said, noting Russian authorities reported at least 15 security service personnel among the dead.

“I think you would look at the official response and say there are concerns about the security services’ ability to protect themselves, let alone others,” he said.

The Russian state news agency Tass cited law enforcement sources as saying that one Dagestani official was detained over his sons’ alleged involvement in the assault.

Concerns remain that Russia’s broad security apparatus has not learned the lessons from the Moscow Crocus City Hall concert attack.

Authorities “were caught off guard” by Sunday's attack, Chambers said.

He believes a disconnect remains between Russian counterterrorism and the capability of assailants operating domestically.

There has been no evidence that Russia's “counterterrorism strategy more broadly will change in the wake of the Crocus City Hall attack,” Chambers said.

"The solution is still deportation and repression. This has been the Russian counterterrorism strategy for decades, and it has still allowed for such attacks as today,” he said.

In this photo taken from video released by The Telegram Channel of the head of Dagestan Republic of Russia on Monday, June 24, 2024, A damaged by terrorists David's star is seen on the wall of the the Kele-Numaz synagogue in Derbent after a counter-terrorist operation in republic of Dagestan, Russia. Multiple police officers and several civilians, including an Orthodox priest, were killed by armed militants in Russia's southern republic of Dagestan on Sunday, its governor Sergei Melikov said in a video statement early Monday. (The Telegram Channel of the head of Dagestan Republic of Russia via AP)

In this photo taken from video released by The Telegram Channel of the head of Dagestan Republic of Russia on Monday, June 24, 2024, A damaged by terrorists David's star is seen on the wall of the the Kele-Numaz synagogue in Derbent after a counter-terrorist operation in republic of Dagestan, Russia. Multiple police officers and several civilians, including an Orthodox priest, were killed by armed militants in Russia's southern republic of Dagestan on Sunday, its governor Sergei Melikov said in a video statement early Monday. (The Telegram Channel of the head of Dagestan Republic of Russia via AP)

In this photo taken from video released by Russian Investigative Committee on Monday, June 24, 2024, a Russian Investigative Committee employee works inside a damaged by armed militants Orthodox Church in Makhachkala after a counter-terrorist operation in republic of Dagestan, Russia. Multiple police officers and several civilians, including an Orthodox priest, were killed by armed militants in Russia's southern republic of Dagestan on Sunday, its governor Sergei Melikov said in a video statement early Monday. (Russian Investigative Committee via AP)

In this photo taken from video released by Russian Investigative Committee on Monday, June 24, 2024, a Russian Investigative Committee employee works inside a damaged by armed militants Orthodox Church in Makhachkala after a counter-terrorist operation in republic of Dagestan, Russia. Multiple police officers and several civilians, including an Orthodox priest, were killed by armed militants in Russia's southern republic of Dagestan on Sunday, its governor Sergei Melikov said in a video statement early Monday. (Russian Investigative Committee via AP)

In this photo released by The Telegram Channel of the administration of the head of Dagestan Republic of Russia on Monday, June 24, 2024, the head of Dagestan Republic Sergei Melikov, center, embraces and comforts a priest as he visits the Orthodox Church of the Intercession of the Blessed Virgin Mary in Derbent after a counter-terrorist operation in republic of Dagestan, Russia. Multiple police officers and several civilians, including an Orthodox priest, were killed by armed militants in Russia's southern republic of Dagestan on Sunday, its governor Sergei Melikov said in a video statement early Monday. (The Telegram Channel of the administration of the head of Dagestan Republic of Russia via AP)

In this photo released by The Telegram Channel of the administration of the head of Dagestan Republic of Russia on Monday, June 24, 2024, the head of Dagestan Republic Sergei Melikov, center, embraces and comforts a priest as he visits the Orthodox Church of the Intercession of the Blessed Virgin Mary in Derbent after a counter-terrorist operation in republic of Dagestan, Russia. Multiple police officers and several civilians, including an Orthodox priest, were killed by armed militants in Russia's southern republic of Dagestan on Sunday, its governor Sergei Melikov said in a video statement early Monday. (The Telegram Channel of the administration of the head of Dagestan Republic of Russia via AP)

In this photo released by The Telegram Channel of the administration of the head of Dagestan Republic of Russia on Monday, June 24, 2024, the head of Dagestan Republic Sergei Melikov, center, comforts a woman as he visits the Orthodox Church of the Intercession of the Blessed Virgin Mary in Derbent after a counter-terrorist operation in republic of Dagestan, Russia. Multiple police officers and several civilians, including an Orthodox priest, were killed by armed militants in Russia's southern republic of Dagestan on Sunday, its governor Sergei Melikov said in a video statement early Monday. (The Telegram Channel of the administration of the head of Dagestan Republic of Russia via AP)

In this photo released by The Telegram Channel of the administration of the head of Dagestan Republic of Russia on Monday, June 24, 2024, the head of Dagestan Republic Sergei Melikov, center, comforts a woman as he visits the Orthodox Church of the Intercession of the Blessed Virgin Mary in Derbent after a counter-terrorist operation in republic of Dagestan, Russia. Multiple police officers and several civilians, including an Orthodox priest, were killed by armed militants in Russia's southern republic of Dagestan on Sunday, its governor Sergei Melikov said in a video statement early Monday. (The Telegram Channel of the administration of the head of Dagestan Republic of Russia via AP)

In this photo taken from video released by The Telegram Channel of the head of Dagestan Republic of Russia on Monday, June 24, 2024, the head of Dagestan Republic Sergei Melikov, center, visits the damaged the Kele-Numaz synagogue in Derbent after a counter-terrorist operation in republic of Dagestan, Russia. More than 15 police officers and several civilians, including an Orthodox priest, were killed by armed militants in Russia's southern republic of Dagestan on Sunday, its governor Sergei Melikov said in a video statement early Monday. The gunmen opened fire on two Orthodox churches, a synagogue and a police post in two cities, according to the authorities. (The Telegram Channel of the head of Dagestan Republic of Russia via AP)

In this photo taken from video released by The Telegram Channel of the head of Dagestan Republic of Russia on Monday, June 24, 2024, the head of Dagestan Republic Sergei Melikov, center, visits the damaged the Kele-Numaz synagogue in Derbent after a counter-terrorist operation in republic of Dagestan, Russia. More than 15 police officers and several civilians, including an Orthodox priest, were killed by armed militants in Russia's southern republic of Dagestan on Sunday, its governor Sergei Melikov said in a video statement early Monday. The gunmen opened fire on two Orthodox churches, a synagogue and a police post in two cities, according to the authorities. (The Telegram Channel of the head of Dagestan Republic of Russia via AP)

In this photo taken from video released by the National Antiterrorism Committee on Monday, June 24, 2024, FSB officers conduct a counter-terrorist operation in republic of Dagestan, Russia. Multiple police officers and several civilians, including an Orthodox priest, were killed by armed militants in Russia's southern republic of Dagestan on Sunday, its governor Sergei Melikov said in a video statement early Monday. (The National Antiterrorism Committee via AP)

In this photo taken from video released by the National Antiterrorism Committee on Monday, June 24, 2024, FSB officers conduct a counter-terrorist operation in republic of Dagestan, Russia. Multiple police officers and several civilians, including an Orthodox priest, were killed by armed militants in Russia's southern republic of Dagestan on Sunday, its governor Sergei Melikov said in a video statement early Monday. (The National Antiterrorism Committee via AP)

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