Picture: ISTOCK
Picture: ISTOCK

The editorial, “When there is fire, yell fire!” (September 5), says that “it would be some consolation if the weaker rand had led to an improvement in exports….”

Export volumes may well increase as the price decreases due to rand weakness, but export earnings may not necessarily increase. Indeed, they may fall if the price elasticity of demand for all or some exports is relatively inelastic.

Placing our faith in export industries for which the quantity demanded over a given period is relatively insensitive to lower prices will lead to disappointment (unless local production and regulatory costs fall more than proportionally).

This suggests we need to carefully consider the nature of international consumer demand for our goods and services and whether this can be influenced favourably by cost-effective marketing, design and other strategies.

Dr Doug Blackmur
West Beach

Please sign in or register to comment.