Prime Minister Narendra Modi’s announcement of demonetisation on November 8, 2016, to invalidate Rs 500 and Rs 1,000 notes caused chaos. Each individual had and still have different perception of the move. Some consider it as a positive step towards the end of black money while others feel it failed to achieve its aim. India is not the only country to come up with demonetisation, there are countries who experimented with it in the past. Where countries like Australia, United Kingdom, and Pakistan were successful in demonetisation there are countries who failed miserably. Here’s a look at five countries that had tried demonetisation but failed at the end.
North Korea (2010)
In 2010, in order to tighten control of the economy and close black markets, the regime of then-dictator Kim Jong II introduced a reform that knocked off two zeroes from the face value of the old currency. The move left people with severe food shortage, increase in the price of necessary goods and no shelter.
Soviet Union (1991)
In January 1991, under Mikhail Gorbachev, the government withdrew 50 and 100 ruble notes from circulation in a move to tackle the black economy and increase the currency value. The 50 and 100 ruble notes comprised of about one-third of the money in circulation. The move severely affected – the economy collapsed and citizens lost faith in the government. Historians also hinted that the move fuelled the eventual break-up of the USSR.
Myanmar (1987)
In 1987, the military invalidated around 80 percent of the value of money in circulation in order to curb black money. The move resulted in first student demonstrations, deepening economic unease with mass protests across the nation followed by a government crackdown and killing thousands of people.
Nigeria (1984)
In 1984, the military government under Muhammadu Buhari issued new currency notes with new colours to make old notes outdated, within a limited period. The aim of the movement was to fix the debt-ridden economy. The move failed miserably as Buhari was eventually ousted in a coup the following year.
Ghana (1982)
In 1982, Ghana got rid of its 50 cedi notes to curb tax evasion, mop up excess liquidity and get rid of corruption. The move was highly unsuccessful as citizens started supporting the black market by investing in physical assets and turning to foreign currency, making the economy weak. Citizens in rural areas had to walk miles to exchange the demonetised money and after the deadline, there were accounts of notes abandoned as worthless.
