Dr. Johan Cloete-Bariley Bank c hief economist.--Johannesburg. 1985
Black unemployment, inflation and the recession have heit them hard.
The official figures understate the situation. TheCy say 500,000 unemployed but it is more
like 2-3 million, especially if the unregistered blacks are included.
Using unemployment to fight inflation will cause an explosion among the blacks
\k use 2.5 billispn rand per month in cash at a prime rate of 25%.
There is consideration of import control as part of the 1986 planning. Also there will be no
wage increase in the public sector.
In 1983 the government removed exchange control for fax non-residents.
The capital account shows a net inflow in gold shares but at any time the money could flow out.
Dis-investment is disastrous because it will undermine confidence and that could stop the
credit that is needed to keep the economy going. Right now the gold and foreign exchange
is not enough to repay the short term A credit that has already been extended.
Real long term investment is going up---most of it is from companies that are already in the
country investing their earnings.
There has been no significant plant expansion. There is already an over-capacity. Fixed
investment is decreasing as is capital and current accounts.
There has been a removal of profits/ Anglo took a lot of money out.
In 1961 after Sharpsville the government instituted exchange control.
U. S. companies are looking for a 5 year pay back on their investment.
South African disinvestment can take place through stock dividends to affiliated companies.
There is now exchange control on all residents. There is a routing of all capital funds
through the central banking authority which maintains an Emchange Equalization Fund.
The international labor movement is impacting on the economy.
The blacks buy 504 of all the food and clothing.
There is a great need for technical and skill training. Some of the big companies run inservice
Also there is a language problem, especially as blacks try to move into higher level managerial