ABSTRACT
In the late 1920s and early 1930s South Africa embarked on an import substitution growth path. South Africa was a founding member of the General Agreement on Tariffs and Trade (GATT) in 1948. Trade liberalisation is intended to increase competition in the domestic market and so dampen inflationary pressures, and to encourage exports by forcing manufacturers to become more competitive and reducing the anti-export bias. Despite rapid industrialisation, imports are generally a similar proportion of national income to their average of 24 per cent in the 1930s. Indian Ocean Rim Association for Regional Co-operation (IOR-ARC) is a welcome example of home-grown regional co-operation, assisted by Indian economic liberalisation since 1991 and South African democratisation since 1994. Portfolio investment in South Africa is, in contrast to Foreign Direct Investment (FDI), double that of South Africans abroad: for Europe this ratio increases to 2.75. In South Africa, not surprisingly, aid levels have increased massively since the end of apartheid.
