International Trade and South African Rand

3644 words 15 pages
Introduction:

Namibia is small flourishing country located in the south west of Africa. Its surrounding neighbors are Angola, Botswana, South Africa, and the South Atlantic Sea. The country is very young, and was recently liberated from foreign and South African rule, and was formerly known as South West Africa. Compared to all of its neighbors Namibia has an extremely low unemployment rate of 5.3%, and a GDP per capita of 7,500 USD. Even though the country appears to have a high per capita GDP compared to some of its other neighbors, the distribution of wealth in the country is one the “world’s most uneven distributions of wealth”. Namibia also has close economical ties with South Africa, because the South African rand and the Namibian
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50% of Namibia’s cereal is imported, with a vast majority of it coming from South Africa. By having the currencies pegged the exchange rate remains constant. This prevents any fluctuations that could increase the food price for Namibians and therefore create massive inflation. Namibia has been classified by the UN as a lower middle income country .

There is heavy trade with the European Union which represents it’s main export market. Inparicular would be the UK for diamonds and Spain for Fish. Diamonds and other minerals still represent over 80% of Namibia’s exports .
TRADE
1986 1996 2005 2006
(US$ millions)
Total exports (fob) 913 1,463 1,402 1,503
Diamonds 310 543 600 630
Other minerals 391 251 254 269
Manufactures 178 343 318 371
Total imports (cif) 651 1,555 1,980 2,090
Food .. N/A 333 424 447
Fuel and energy .. 92 117 123
Capital goods .. 516 657 693

BALANCE of PAYMENTS
1986 1996 2005 2006
(US$ millions)
Exports of goods and services 997 1,801 2,233 2,501
Imports of goods and services 838 2,136 2,643 2,860
Resource balance 159 -335 -410 -359
Net income - 246 70 72 80
Net current transfers .. .. .. ..
Current account balance 253 168 348 430
Financing items (net) .. -145 -323 -402
Changes in net reserves .. -23 -25 -28
Memo:
Reserves including gold (US$ millions) .. 195 371 410
Conversion rate (DEC,

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