South Africa’s move to curb imports while it is unable to produce a wide variety of products will negatively impact its ability to trade.According to the latest rankings by Harvard Universities’ Growth Lab, looking at the economic complexities of countries around the world, South Africa now ranks 70th. In 2000 the country was ranked in the top 50 countries worldwide, sitting at 44th.The ranking, which is considered one of the best indicators of whether a country will grow in the next few years, highlights that South Africa is losing its ability to produce a wider variety of products.With plans to reduce imports, this is a catastrophic situation. Comparing South Africa to Ethiopia on the same ranking, for example, shows that while South Africa at present is still at a higher level of development and sophistication from a development production base, if Ethiopia continues on its current course, it will overtake South Africa within the next ten to 20 years and become a more diversified and industrialised economy than South Africa.In this scenario the last thing South Africa should be doing is shrinking its import base.Exports and imports work hand-in-hand and cannot be divorced from each other. Imports allow us to be better at exports. In a small domestic economy like South Africa with an increasingly narrow industrial base to export, imports are critical.Trade is a zero-sum game and to win one has to participate on both sides. Diversifying, growing and expanding the range of locally produced products competitively at an international level will boost exports.
