ABSTRACT
The classical economists did not take the trouble to examine the significance of import-content in exports. It was only after the war, when the free flow of international trade was severely distorted by all kinds of interventionist measures, that economists formulated theories on the protection exchange rate of domestic industries which were deliberately sheltered by restrictions import policies. Frauds, like those practiced by Heilig and the Brazilians, are only workable if foreign currency can be bought on the black market at a relatively cheap rate. Apart from creating the anomaly of exports with a negative VALAD, the overt and covert multiple exchange rates provide luscious openings for all astute manufacturing exporters. A Centre for Research and Promotion of Investments and Exports (CIFIEX) has the responsibility for ascertaining the value of both. The Export Incentive Technical Commission utilises the findings of CIFIEX and awards export bonuses geared to the size of local-content and value-added.
