Sanctioning Apartheid - KORA

SANCTIONS AND FINANCING
SOUTH AFRICA'S FOREIGN TRADE
John E. Lind and David J. Koistilzen
The financing of the irnpo* of capital goods is crucial to the.
maintenance of the South &can economy became South Africa
produces for export primary products like gold and d while
insporting finished goods and the machinery which it needs to
keep its mines and industry rudng.
In September 1987, the governor of the South &can
Reserve Bank outlined an optimistic scenario for South African
growth which required, among other measuresI) "an increased use
by South A€rican importers and exporters of foreign trade and
suppliers' =edits. . . ." Since there is general agreement concerning
the imvce of trade credits, this chapter tries to answer
in quantitative terms the question: How great would be the
damage to the Swth African wnamy if dl foreign trade finance
WW Nt off!
Fmt, the total ammt of trade finance is sthated ffom the
total .trade volume, assassuming that no general purpose lending is
available. The d t s vary from $5 billion to $8 billion for 1985
to $7 billion to $11 billion for 1987. These numbers are found to
be roughly ronsomt with the foreign debt fi- of South
after the trade finance was extracted hrn the total South