ABSTRACT
Unemployment and underemployment affected 15 per cent of the workforce; the number of jobs in the manufacturing sector is on a par with the situation thirty years ago. Since there is no domestic capital market, and the system functions at a very low rate of monetisation, the fiscal deficit has to be financed by an expansion of credit from the Central Bank. The growth in liquidity attributable to the bank rate is cancelled out by the private sector's interest payments. The discrepancy lies in refinancing the debt servicing, and delayed payments. When the State lacks the political power to meet its external financial commitments without increasing liquidity, inflation becomes the necessary tool for any change. This creates a sort of inflationary tax, seen in the fall in real wages, profitability in the business and industrial sector, and less money available for the population as a whole.
