ABSTRACT
In the 1970s South Africa changed from a high-growth to a low-growth economy. During the previous century, the rate of growth appears to have been one of the fastest in the world. While the economy was stagnating another problem was getting increasing attention. The year 1994 reflected a recovery for the economy of South Africa, with a real GDP growth of 2.4 percent. There is a risk that growth slows down by economic policy measures that forces the economy into a new recession, unless positive expectations are created in private business circles. The chapter discusses the problems created by the import substitution policy from the 1970s onwards and the knowledge that the role of minerals, notably gold, as an engine of development has come to an end. The dynamism that characterized the South African economy from the time of the mineral discoveries during the late nineteenth century until the 1970s was to a large extent artificial.
