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Periodical article Periodical article Leiden University catalogue Leiden University catalogue WorldCat catalogue WorldCat
Title:How exposed is the South African economy to international trade?
Authors:Rangasamy, L.ISNI
Blignaut, Z.
Periodical:South African Journal of Economics
Geographic term:South Africa
Subjects:economic conditions
international trade
industrial production
Abstract:Following the policies implemented during the 1990s, South Africa's economy has become more globalized. This is particularly the case as far as international trade is concerned. The implementation of trade reforms, in some cases faster than WTO commitments, has increased the exposure of the South African economy to international trade. Trade in intermediate inputs increases the external orientation of an industry and hence increases the economy's exposure to trade. This means that the economy is more open to external trade shocks than is conveyed by the traditional openness measure which considers only the trade in final products. This paper uses a measure proposed by J. Campa and L.S. Goldberg (1997) to estimate the exposure to trade and finds that around 79 percent of output in 2000 was accounted for by industries that became more exposed to international trade. Further, domestic production has become more reliant on imported inputs with around 60 percent of South Africa's GDP being accounted for by industries with a negative external orientation (i.e. industries where imported input costs exceeded export revenue). In addition, it was also found that those sectors that became more externally oriented had lower inflation rates and higher growth rates than the other sectors in the economy for the period under analysis. The extent to which the increased exposure to international trade facilitated these developments remains topical for further research. Ann., bibliogr., notes, ref., sum. [Journal abstract]