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Sectors of the economy

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Primary sector - use of base materials

The primary sector is the portion of the country’s economy devoted to the exploitation of basic materials, such as mining, agriculture, fishing, and forestry.  The productivity of these primary resource sectors is variable, especially in agriculture, forestry, and fishing, partly because of the reliance of these sub-sectors on weather patterns and on the carrying capacity of their respective resource bases (for example, arable soils and fish stocks).  They are also sensitive to exchange rate movements and international commodity cycles, especially mining.  Mining remains an important foreign-exchange earner, with gold accounting for over one-third of exports.  South Africa is also a major producer of coal, manganese, chrome, platinum, and diamonds.  Agriculture (even though it contributes only about 3.6% to the GDP) is an important provider of direct and indirect employment.
 
Given its reliance on renewable and non-renewable resources, the primary sector has wide-ranging impacts on the environment.  Agriculture has contributed to the degradation of soils and vegetation across South Africa and has affected water quality through, amongst other things, the use of fertilizers and pesticides.  Commercial fishing has had a significant impact on marine and coastal ecosystems and research indicates that there has been over-exploitation of pelagic and linefish species (see Marine and coastal ecosystems).
 
Mining changes the topography and visual character of the land and destroys natural habitats, causes pollution from mining contaminates, depletes surface and groundwater resources, and degrades soils.  In 1997, mining was the largest producer of waste in South Africa, creating over 376 million tonnes of hazardous and general waste.
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Primary sector

The primary sector is the portion of the country’s economy devoted to the exploitation of basic materials, such as mining, agriculture, fishing, and forestry.  The productivity of these primary resource sectors is variable, especially in agriculture, forestry, and fishing, partly because of the reliance of these sub-sectors on weather patterns and on the carrying capacity of their respective resource bases (for example, arable soils and fish stocks).  They are also sensitive to exchange rate movements and international commodity cycles, especially mining.  Mining remains an important foreign-exchange earner, with gold accounting for over one-third of exports.  South Africa is also a major producer of coal, manganese, chrome, platinum, and diamonds.  Agriculture (even though it contributes only about 3.6% to the GDP) is an important provider of direct and indirect employment.
 
Given its reliance on renewable and non-renewable resources, the primary sector has wide-ranging impacts on the environment.  Agriculture has contributed to the degradation of soils and vegetation across South Africa and has affected water quality through, amongst other things, the use of fertilizers and pesticides.  Commercial fishing has had a significant impact on marine and coastal ecosystems and research indicates that there has been over-exploitation of pelagic and linefish species (see Marine and coastal ecosystems).
 
Mining changes the topography and visual character of the land and destroys natural habitats, causes pollution from mining contaminates, depletes surface and groundwater resources, and degrades soils.  In 1997, mining was the largest producer of waste in South Africa, creating over 376 million tonnes of hazardous and general waste.
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Linkages between economy and the environment

Sustainable development is not simply an environmental issue that depends on appropriate economic development.  Economic development depends on a sustainably managed environment and natural resource base.  Agriculture and the associated food-processing industry in South Africa, for example, will not be sustainable unless soil is preserved and loss (which is occurring at eight times the rate of replacement) is reduced. 
 
 
Interactions between the economy and the environment
 
 
 
The linkages between the economy and the environment are summarized in the figure above.  A simplified view of the economy divides it into the two sectors of production and consumption, which are linked through the exchange of goods and services on the one hand, and factors of production on the other.  The environment, typically ignored in conventional macroeconomic analysis, interacts with the economy in three ways: by supplying energy and materials, by taking up waste products, and by providing amenities.
 
The productive sector uses energy and material resources from the environment, transforming them into useful goods and services and generating waste products.  There is some recycling of resources within both the consumption and production sectors (represented in the figure by the R1 and R2 loops).  The environment, therefore, acts as a supplier of resources, a sink for waste resources (with a limited capacity to assimilate them), and as the provider of amenity (that is, of the qualities and facilities that make an area a pleasant and convenient place to live and work) and of spiritual and existence values to society.
 
Encompassing the whole economy are the global life support services provided by the natural environment, which include maintaining a global atmospheric composition suitable for life, maintaining the right temperature and climate, and recycling water and nutrients.
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This page was last updated 22/05/2008