Chapter 9: External trade, 1970-2000
Stuart Jones INTRODUCTION Since the 1880s gold has been the main driving force behind the expansion of South Africa’s external trade. Gold provided the export surplus that enabled larger volumes of imports to be maintained than would otherwise have been possible in a developing economy. By the 1960s producer goods had overtaken consumer goods in the volume of imports pouring into South Africa and this pattern was reinforced by the rise in the gold price in the 1970s and the government’s commitment to a number of capital-intensive infrastructure projects. In the 1980s, when the gold price declined, the economy experienced a severe adjustment that was made worse by the deteriorating political situation both at home and overseas. In these circumstances, the trade-led growth of the 1970s gave way to external trade acting as a break upon the economy in both the 1980s and the 1990s. The main reason for this dramatic change was the decline in both the volume and value of gold exports. Moreover, despite all the ‘media hype’ about globalization, the South African economy has been disengaging itself from the world economy in the last 20 years of the century. Nor has the arrival of an ANC/Communist government reversed this situation to any extent. Trade as a proportion of GDP has fallen dramatically. As Table 9.1 indicates, this fell from 61 per cent in 1980, the year the gold price peaked, to 38.1 per cent in 1990. Five years later, after the ending of sanctions and the arrival...
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