International Trade and South African Rand

3644 Words Nov 8th, 2008 15 Pages
Introduction:

Namibia is small flourishing country located in the south west of Africa. Its surrounding neighbors are Angola, Botswana, South Africa, and the South Atlantic Sea. The country is very young, and was recently liberated from foreign and South African rule, and was formerly known as South West Africa. Compared to all of its neighbors Namibia has an extremely low unemployment rate of 5.3%, and a GDP per capita of 7,500 USD. Even though the country appears to have a high per capita GDP compared to some of its other neighbors, the distribution of wealth in the country is one the “world’s most uneven distributions of wealth”. Namibia also has close economical ties with South Africa, because the South African rand and the
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Namibia has natural resources varying from diamonds, gold, and other metals, to farming and fisheries, and exotic wildlife. The economy is based on capital intensive industry and farming. Although the country has a high GDP amongst other developing countries, the wealth is not evenly spread out, they have a small working class of about 200,000 skilled labors, while the rest rely on herding and farming. Namibia is trying to better its trade relations with out countries, they are apart of General Agreement on Tariffs and Trade (GATT), and World Trade Organization (WTO). The legal currency of Namibia is the Namibian dollar, but the South African rand is also accepted, although it’s not true vice versa because of the Common Monetary Area (CMA).
Tourism is the 3rd highest source of income for Namibia, it helps provide job opportunities for Namibians in rural regions of the country, while helping to preserve the natural wonders. Even though most of the tourism is from the local regions, by South Africa and other surrounding countries, they are trying to develop it and market it on a national level.

External Factors impacting on the country
Since independence in 1990 Namibia’s currency the Namibian Dollar has been pegged to the South African Rand. This helps due to the fact that Namibia is characterized by a high private savings rate which due to
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