49. South Africa has none the less invested heavily in the domestic production of 'strategic' items such as S 3mthetic fuel, armaments, computers, chemicals and automobiles, all of which are heavily dependent on imports. Small domestic markets and spending on costly imports of capital and intermediate goods have made these projects highly cost-inefficient. Massive Government subsidies have been necessary to sustain projects like the SASOL oil-from-coal conversion plants and the Mossel Bay fuel-from-gas project designed to meet only 20 per cent-25 per cent and 10 per cent of South Africa's crude oil imports, respectively. South Africa is heavily dependent on foreign technology for both the exploration and manufacture of liquid fuels. It has been estimated that liquid fuels produced by SASOL would cost at least three times as much as oil bought on the international market. According to international experts, the Mossel Bay project will produce only about 25,000 barrels of fuel a day for the cost of R5,500 million, while a similar project overseas could be built to produce four times as much for only RlOO million. 50. The South African Government's programme of structural reform also includes privatization of public enterprises and corporations. The proceeds from privatization are supposed to be spent on retiring public debt and developing infrastructure and small businesses. Part of it is to go to pay for the Government's 'repressive reform' policy. This aims to co-opt a small group of urban blacks in certain key townships through township-upgrading schemes with new houses, water and electricity, while at the same time increasing repression to silence the majority. Some observers believe that privatization is aimed at counteracting those sanctions which have been directed mainly against the Government and Govemment-owned bodies, however. Still others see in it a pre-emptive effort to keep economic control in white 
**Analysis**
The text discusses the economic situation of South Africa, specifically the country's dependence on foreign technology and imports, and the government's attempts to reform the economy through privatization. It highlights the inefficiencies of domestic production and the high costs of government subsidies.

**Category**
Economic development, Industry