fluctuations in world prices. Moreover, declining productivity is also affecting South Africa’s primary industries. It is difficult to see how south Africa's gold mining industry can compete with countries that have increased their market sbare by using new mining methods and low-cost tscbn010gy. 34. South Africa has a very high propensity to import during periods of growth resulting in persistent current account deficits. The country has been extremely dependent on imports of capital goods, intermediate goods such as oil, as well as other strategic items like arms and chemicals that it cannot produce for ?tself. Moreover, white consumers tend to demand high quality imports. Growth is increasingly consumer-led, and an upswing in the economy is usually accompanied by an expansion of consumer credit and a rise in demand for imported goods. 35. Distortions in the gpg&gLd economy are a part of the reason for thie import dependence. There is a growing tendency to adopt capital-intensive modes of production because of the scarcity of skilled labour reeulting from restrictiona on education for non-whites, &L&&Q prohibition of black workers in white jobs, and high wages for skilled jobs. Moreover, louth Africa has failed to develop its own capital goods sector. Attempt? to promote import-substitution bave not decreased it8 dependence on imports; much of the local production in the electronics and automobile sectors, for instance, io limited to local assembly of imported components or to production under licence. A major obstacle to South Africa becoming a modern industrial nation is the e system itself. Domestic markets are too small to finance research and development costs and skilled people are crucial to development of sophisticated high technology. 36. Because of thZe heavy dependence on imported capital and intermediate gooda, an expansion in economic activity tends to increase the demand for 
**Analysis**
The text discusses various factors affecting South Africa's economy, including fluctuations in world prices, declining productivity, and import dependence. It highlights the challenges faced by the country's primary industries, such as gold mining, and the lack of development in its capital goods sector. The text also touches on the issue of skilled labor scarcity and the impact of consumer-led growth on imports. Overall, the text appears to focus on the economic development and structural issues affecting South Africa's economy.

**Category**
Economic development, Industry, International trade