Internal and external trade in the 1970s

Abstract

In the golden decade of the 1970s South Africa's trade reflected the more difficult economic conditions of the time, signalled by the ending of rapid economic growth and the onset of double digit inflation. The illusion of prosperity was maintained by the rise in the gold price and accompanying expansion of the currency base. These developments in turn were reinforced by the policies of the Vorster government, which did not understand the workings of the market and had a long standing bias in favour of government intervention and centralised state control, as could be seen in the operation of the agricultural marketing boards, in the industrial decentralisation policies, and in the government's futile attempts one is tempted to say Manuel-like attempts to ignore the market and to maintain low interest rates at a time of double digit inflation. Both internal and external trade reflected these conditions, which were further reinforced by the ending of a quarter of a century of unparalleled growth in the international economy.