Economy

Until well into the 20th century, South Africa's economy was based almost entirely on agriculture and mining. Industrial development came primarily after the political unification of the country in 1910 and with the establishment of a domestic iron and steel industry during the early 1930's. In the following decade many secondary manufacturing concerns were established, most notably those based on iron and steel.

The greatest economic boom, however, occurred during the 1950's and 1960's. This period was marked by diversification of industry and large investments of foreign capital. Economic growth slowed during the 1970's and 1980's, largely because of political instability, the cessation of much foreign investment, and the wide fluctuations in the price of gold, an important export for South Africa.

Most of South Africa's industries are privately owned, but somesuch as iron and steel, electrical power, and most forms of transportationare primarily government enterprises. The economies of South Africa, Botswana, Lesotho, Swaziland, and Namibia are closely linked by a customs agreement.

Most white South Africans enjoy a relatively high income and a high standard of living, comparable to those of the United States. The income and the standard of living of most nonwhites, although improving, are substantially lower.

In terms of its contribution to the gross national product, manufacturing leads all other economic activities. Though production is less varied than in most industrialized nations, it is, nevertheless, diverse. Except for computers, South Africa does not rely heavily on imports.

The principal groups of manufactured products are processed foods and beverages, metals and metal products, textiles and clothing, chemicals, machinery, and transportation equipment (mainly automobiles and trucks). Also important are the industries that produce paper, tobacco, glass, rubber, and wood products.

Most of the industrial development has occurred in four widely separated areasthe metropolitan regions of Cape Town, Durban, and Port Elizabeth, and, especially, in Gauteng Province. The latter centers on Johannesburg and extends northward to Pretoria, southward to Vereeniging and to other cities of the Witwatersrand, or Rand. Concentrated here are the metallurgical, chemical, and engineering industries.

To avoid the further concentration of industry, the government has established a program that provides incentives for private companies to locate their facilities in regions that are relatively undeveloped. The incentives include tax concessions and financial assistance.

In the late 1980's agriculture employed about 14 per cent of South Africa's labor force and made up a large and highly valuable part of the economy. It is declining in relative importance, however, because of increasing industrialization. Most of the commercial farms are operated by white South Africans employing mainly black laborers.

Only about 12 per cent of South Africa's land is suitable for cultivation, mainly because of scant rainfall and because few rivers can provide water for irrigation. The principal exception is the Orange River, where a vast engineering project supplies irrigation water and hydroelectric power for parts of the Free State and Northern Cape Province.

Despite the relatively small crop area, a great variety of temperate and subtropical crops are grown, mainly because of the wide range of climate, soil, and terrain. Corn is the chief cash crop. It is also the main subsistence food of black South Africans. Wheat ranks second among cereals; others include oats, barley, and kafir (a grain sorghum). Sugarcane and fruits are grown, partly for export. Other chief crops include potatoes, wine grapes, tobacco, peanuts, cotton, bananas, and pineapples.

The raising of livestock has long been a basic part of the South African economy. It is based on the vast grasslands that are unsuited to crops, but are capable of sustaining livestock. Sheep are by far the most numerous animals; next are cattle, goats, and hogs. From the sheep herds comes one of South Africa's most valuable exportswool, mainly merino wool. Among wool-exporting nations South Africa has long held a prominent position. Large amounts of meat, dairy products, hides, and skins are also derived from South Africa's livestock.

South Africa is one of the world's great mining countries, not only in production but also in the variety of minerals produced and in reserves. Except for petroleum, which is totally lacking, the nation is virtually self-sufficient in minerals.

For many decades gold has been of overwhelming importance. Normally it accounts for 50 to 60 per cent of the value of all minerals mined in South Africa and the largest single share of world production. The chief mining areas are in the north-central part of the country, especially in Gauteng, Mpumalanga, and the northern part of Free State. In gem-quality diamonds South Africa has long been a leading producer. Mines near Kimberley and Pretoria account for much of the production. Of increasing importance is the Atlantic coast, where diamonds are recovered from alluvial sand and gravel.

Copper and coal also rank among South Africa's valuable minerals. Coal is particularly significant since it is virtually the only domestic fuel and source of electric power. Gasoline is produced from coal at Sasolburg in the Free State. Other minerals produced in South Africa include uranium, platinum, asbestos, iron ore, manganese, phosphates, chromium, antimony, silver, and vanadium.

The fishing industry of South Africa has grown rapidly since the 1950's. Operations are conducted far out at sea and along the entire coast, including that of Namibia. The catch consists mainly of pilchard, anchovy, herring, rock lobster, and hake, and is processed primarily at fishing ports along the western and southern coasts. Much of the catch, especially rock lobster and hake, is canned or frozen for export. Large amounts of fish are also converted to meal and crude fish oil.

Because of its limited natural forests, South Africa relies heavily on commercial plantations of pine, eucalyptus, and wattle (a type of acacia) to meet most of its wood requirements. Many woods, however, must still be imported. Wattle bark and its extract, which is used in tanning leather, have long been exported.

The South African government owns and operates virtually all public transportation facilities, including railways, ports, airports, and pipelines. Most of the facilities and equipment are operated by one agency, South African Transport Services.

The railway system is modern and serves all major South African urban and mining centers. It also connects with the railways of several adjoining countries. Johannesburg is the chief rail hub. Except in the sparsely inhabited northwest, the country is served by an extensive and modern highway system.

South Africa's merchant marine is made up of nearly 1,000 vessels. Durban is the largest port in terms of tonnage. Other major ports include Cape Town, Port Elizabeth, East London, and Mossel Bay. The Johannesburg-Pretoria area is served by Maputo, the principal port of Mozambique. South African Airways (SAA), the national airline, provides domestic flights and international servicemainly to adjoining countries and to Europe. The largest airport, and center of operations for most foreign airlines, is Jan Smuts International Airport, about midway between Johannesburg and Pretoria.