according toestimates madebytwoacademics attheUniversity ofCapeTown,cited ina1989special reportoftheDirector-General ofILO,unemployment couldbeas highas4millionl approximately 50rercentoftheeconomically activepopUlation inthe"homelands" wasthought tobeoutofwork. AreportoftheCommittee of Economic Affairs ofthePresident's Council inSouthAfricaprojected theincrease insurplus labourto7.9million bytheyear2000iftheeconomic growthratewaG 3,1percent. ~/ 104.SouthAfrica's balance·-of-payments situation deteriorated sharply in1986. Over$800million ofthecountry's reserves ofgoldandforeign exchange w~re dra~n down.51/Inthecapital account, theoutflow ofcapital fromSouthAfrica continued, withthetotalnetoutflow fortheyeartotalling R6.7billion (approximately $3billion), ofwhichR5.6billion ($2.5billion) wass~ort-term andR1.1billion ($500million) waslong-term capital. ~5/Oncurrent account, thesu~plus shrankin1988to$1.272billion asrompared with$3billion in1987, reflecting thereduction inthe1988merchandise tradesurplus. Imports ofboth consumer goodsandindustrial inp~tsrosesharply in1988astheSouthAfrican ~onomyexpanded. Theincrease intotalimports (f.o.b.) was37percentinterms 'ndandalmost24percentintermsofUnitedStatesdollars. Exprrtearnings ~OBein1988butatalowerratethanimportss expor.trevenues in1988were up12percentover1987intermsofrandand6percenthigherintermsofUnited Statesdollars. Thus,thesurplus on~outhAfrica's merchandise tradeshrank from $7.16billion in1987to$5.22billion in1988.Against this,thesecondbiggest -26-iteminthecurrent account -"invisibles" -registered adefic:it of $4.13billion. ~I 105.Toreducefinancial pressures, SouthAfrican authorities focused particularly ontwokeyareasl flscalpolicy andnegotiation withcreditors withregardto external debtrepayment. Thenational budgetpresented inMarch1989aimedto abortthemini-boom of1988,the3percentgrowthratehavingtobeconsidered as "over-heating" oftheeconomy. Particularly inviewoftheprio:dty assigned to security expenditure, thebudget aimedtoholdexpenditure constant inrealtermR andtomeotthedeflationary goalbyincreasing expen~iture taxes. Withthe inflation ratefortheperiodestimated ataround 15percent,theofficial defence budgetfor1989/90, innominal terms,was21.3percentgreater thanthebudgetfor 1988/89 aud13.7percenthigherintermsofactualexpenditures. ,5Jl/ 106.The~xtenttowhich'the financial pressures onSouthAfricawerereduced through alleviation ofthedebt-servicing burdenisdescrib~d inthefollowing section. C.Economic relations andimpac~~~~ 107.SouthAfrica's economic performance isclosely linkedtotheeconomic relations thatitmaintains withother c~~·ntries. Potentially, SouthAfricais extremely vulnerable toexternally imposed economic pressures bywayofforeign trade,accesstoloansandtradecredits, debtrepayment terms, andcapital investment. Yet,economic sanctions, ascurrently implemented, havesofarnot succeeded inpressing theregimetothepointthatitiaprepared toabandonits apartheid policies. Loopholes, avoidance measures andanincrease inthirdporty trading practices haveallservedtolessentheimpactofeconumlc sanctions. 1.I{adeandtransport 108.SouthAfricaisatraditionally o~eneconomy' foreiqn tradeasapropo~tion ofGDPhasaveraged somewhat over50percentduringthe19808. Thus,pressures through foreign tradestrikeattheheartoftheSouthAfrican economy. Data compiled intheIndependent Expert.StUdyontheEvaluation oftheApplication and ImpactofSanctions, commissioned bytheCommonwealth Secretariat ofForeign MiniDters onSouthern Africa, indicate thattotaltradebetween SouthAfrica and ninemajorWestern States(Australia, Canada, Denmark, Finland, France, New Zealand, Norway, Sweden andtheUnitedStates) fellby$2.135billion, or 33percent,between 1983-1985 and1987.Duringthatperiod, imports fromSouth Africadecreased from$3.481billion to$2.230billion, or36percont,while exports toSouthAfricawentdownfrom$2.931billion to$2.047billion, or JOpercent.[I/However, thlsdecreasing tI'endappears tobereversed in1988. Comparison ofthodataforthetwoperiods indicates thattradebotween South Africaandthesetrading partners in~rGased invaluein1988. -27-Table2.Tradebetwetn theCustoms UnionofSouthAfricaand tradingpartners, January-September 1987and January-September 1988andthepercentage change (Inmillions ofU~itedStatesdollars) Total Imports from Exports totrod! SouthAfrioe SouthACricf
**Analysis**
This text appears to be a report on the economic situation of South Africa, discussing various economic indicators such as unemployment, balance of payments, and trade. It also touches on the impact of economic sanctions on the country. Given the focus on economic data and analysis, it seems most likely that this text falls under the category of economic development, with some relevance to international trade.

**Category**
Economic development, International trade