reserves . Drawing down foreign reserve8 would affect the country’s capacity to meet its debt repayment obligations and to finance its essential tipotto. 44. Overall. the dual exchange rate eyetem has had only a limited impact on capital inflow and outflow. Despite the expectations of the South African Government, restraints on repatriation appears to be discouraging rather than encouraging new direct investments. Moreover, disinveetors are cutting some of their loeees by using non-equity links to repatriate licensing or franchise feee and royalties at the higher commercial rand rate. 3. Q 45. In the absence of capital inflowe, South Africa hae been forced to generate ourpluaeo in the current account of its balance of trade to offset its debt repayments. In order to circumvent trade sanctions, the South African Government has sought in various waysl to encourage avoidance, counter-trade and sanctiona-busting. It has set up a special Secretariat for Unconventional Trade to eotablieh sanctione-busting networks and provide advice to importers and exporters. The Private Sector Export Advisory Cowittee encourages private capital to engage in sanctions-busting activities. For instance, foreign companies eager to sell technology to South Africa or buy strategic minerals from South Africa are asked to buy South African exports or supply strategic imports such as oil and arms. Trade will largely take place through a third country in order to disguise its origfqs. The South African Government also facilitates ‘unconventional’ trade by concealing information on foreign trade and shipping traffic. It is illegal to divulge information on matter8 related to oil, uranium and nuclear technology. 46. Circumventing trade eanctions neceeearily entail enormous Costa, chiefly by increasing the number of middle-men and setting up of front companies or other links abroad. The coats of maintaining the infraetructure needed for /... A/45/552 English Page 17 this conduit trade must be borne partially by tne South African Government. 
**Analysis**
The text primarily discusses the economic policies and practices of South Africa, particularly its use of unconventional trade methods to circumvent international trade sanctions. It highlights the country's reliance on foreign reserves, its struggles with debt repayment, and the ways in which the government has sought to encourage capital inflows and offset debt payments through trade activities.

**Category**
International trade