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Until about 1870 the economy of the region was almost entirely based on agriculture. With the discovery of diamonds and gold in the late 19th cent., mining became the foundation for rapid economic development. In the 20th cent. the country's economy was diversified, so that by 1945 manufacturing was the leading contributor to the gross national product (GNP). By the 1990s, services contributed almost 60% of the GNP, while industry contributed over 35% and agriculture only about 5%. The economy is largely controlled by whites, but nonwhites make up more than 75% of the workforce. Working conditions and pay are often poor, and many nonwhites work as subsistence farmers.
South Africa has a limited amount of arable land (about 10%) and inadequate irrigation; production is diminished during periodic droughts. The chief crops grown are corn, wheat, sorghum, potatoes, peanuts, citrus fruits, cotton, tobacco, and sugarcane. In addition, large numbers of dairy and beef cattle, sheep, goats (including many Angora goats), and hogs are raised. There is a large fishing industry and much fish meal is produced.
The main industrial centers are Johannesburg, Cape Town, Port Elizabeth, Durban, Pretoria, and Germiston. The principal manufactures include processed food, beverages (including wine), textiles, clothing, forest products, chemicals, iron and steel, metal products, machinery, and motor vehicles. South Africa is a world leader in the production of gold, diamonds, aluminosilicates, chromium, manganese, vanadium, and platinum. Other leading minerals extracted are copper ore, coal, asbestos, iron ore, silver, and titanium. Uranium is also mined.
The country has good road and rail networks. The chief seaports are Durban, Cape Town, Port Elizabeth, East London, Saldonha Bay, and Mossel Bay, where natural gas is now extracted offshore. The Orange River Project, a major hydroelectric and irrigation scheme, began in 1963 in central South Africa and was fully operational by the mid-1980s.
The main imports are machinery, transport equipment, consumer goods, chemicals, petroleum and petroleum products, industrial raw materials, and foodstuffs. The chief exports are manufactured goods, precious metals, chemicals, arms, foodstuffs, and diamonds. The principal trade partners are Germany, the United States, Great Britain, and Japan. South Africa carries on a large-scale foreign trade and generally maintains a favorable trade balance. It is a member of the Southern African Development Community.
Disapproval of apartheid policies and increasing social unrest among black South Africans in the 1970s and 80s led to the withdrawal of investments by some members of the international business community. A number of nations (European Union members, Japan, and the United States) imposed sanctions on South Africa, banning new investment and selected South African exports. These trends were reversed with the political changes of the 1990s, and tourism also began to make a comeback.
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