Zimbabwe Finance Minister slams US Geography academic Prof Steve Hanke

Steve Hanke, professor of applied economics at Johns Hopkins University, speaks during a panel discussion at the Bloomberg via Getty Images Global Inflation Conference in New York, U.S., on Thursday, Sept. 8, 2011. The event will look at global inflation in the wake of recent events, from protests over food prices that ushered in the Arab Spring, to the U.S. debt crisis, to China's ongoing struggle to keep its economy under control. Photographer: Ramin Talaie/Bloomberg via Getty Images

FINANCE Minister Mthuli Ncube has dismissed United States economist and currency expert Steven Hanke’s claims the country’s inflation was much higher than the official figures presented by authorities.

Hanke recently put Zimbabwe’s inflation at 290 percent, presenting it as second highest in the world after Venezuela.

On the contrary, the Zimbabwe National Statistics Agency recently put the country’s inflation rate at 57 percent.

Briefing guests at a Reserve Bank of Zimbabwe monetary policy review breakfast meeting last Friday, Ncube expressed doubt over the methodology being employed by Hanke in determining the country’s inflation figures.

“Coming to issues being raised by Hanke, one has to know that there are many ways to calculate inflation.

“In Zimbabwe, we have a very constant way of using the household basket to calculate inflation and that basket. Our inflation rate year on year is what it is as published,” he said.

Ncube added, “Hanke is using something else like the replacement cost approach to calculate inflation which is why he is coming up with much higher figures.

“He must not spend time quarrelling with us. We hear him, we know it. Figures are what they are and there is no need to fight because figures are what they are because of different methods to calculate inflation.”

The minister said what he only respected from Hanke’s findings was the message that inflation was something to worry about and hence, needed to be dealt with.

Zimbabwe’s economy has been going through turbulence due to failure by government to expand the national cake, lack of a stable currency and political instability.

In the past, Hanke has come under fire for his advocacy of currency board systems, particularly from local government officials in countries where he has worked as an adviser, as well as from rival economists.

For example, Former Bulgarian bureaucrat Krasimir Angarski who was tasked with the introduction of the currency board has contested the often repeated claim that Hanke is the “father of the Bulgarian currency board” and has added that Hanke had no knowledge of the Currency Board law because Angarski refused to provide him the manuscript he was working on.

In 1969, Steve Hanke began his academic career as a water resource economist in the Johns Hopkins Department of Geography and Environmental Engineering (now the Department of Environmental Health and Engineering), a department founded by famed sanitary engineer Abel Wolman.

At the time, the department was known as the premier water resource engineering department in the country, and was home to world-renowned sanitary engineer John C. Geyer, with whom Hanke would frequently collaborate.

In 1981, Hanke was appointed a senior economist with the President’s Council of Economic Advisers, where his responsibilities included the Reagan White House’s water portfolio. While at the CEA, Hanke led a team that re-wrote the federal government’s Principles and Guidelines for Water and Land Related Resources Implementation Studies, to include more rigorous benefit-cost analysis requirements.