Traditional thinking stymies export growth

INDUSTRIALISTS MUST throw off the shackles of the past and take a leaf from the automotive industry's book to get involved in the export market more fully, says Standard Bank economist Dr Iraj Abedian. "They need to seek niche markets where South African products can compete globally," he told a breakfast meeting organised by the Johannesburg Chamber of Commerce and Industry in Sandton last week. "Too often manufacturers have allowed themselves to become traditionalists and have been bound to the situation of the pre-1990s when South Africa was an importer rather than an exporter. This saw the country's financial situation dip at one stage to a level where reserves allowed for only three weeks of imports," he said. "The low level of reserves and unavailability of international finance put pressure on the Balance of Payments (BOP) and this also affected the exchange rate. Today this has improved to the point where we hold about 14 weeks of reserves. But this is far from satisfactory when you consider Botswana's two-year period and two-and-a-half years which Mauritius enjoys. "Exporters should exploit niche markets, non-traditional destinations and non-traditional types of exports. "We must get away from the outlook that we cannot compete with overseas nations. The automotive industry has shown what can be done. Who would have thought a few years ago that we could compete in that field with Germany and Japan, and even export vehicles to the United States? "We have become less dependent on mining these days, with a huge leap in non-mineral exports. The category of precious stones and metals shows a jump from 7.1% of our total exports in 1991 to 26% in 2000. That, by international standards, is amazing. "Get away from the belief that our geography is against us, and get together in each industry as the automotive manufacturers, both vehicles and components, have done and move ahead."