1983, the countrya€™s real gdp growth dwindled to 2, 6 per cent per annum. in the early 1970s, the semi - fixed exchange rate system, which had been in force up to that time in most parts of the world, broke down, reducing the discipline imposed on policy makers. the first oil price shock together with a substantial increase in the gold price initiated an inflation spiral and financial conditions became less stable with inflation rising to double - digit levels from 1974. growth in manufacturing slowed to 3, 4 per cent per annum, as momentum could not be sustained given the more uncertain economic environment and the shortages of highly skilled people. still, growth in the tertiary sectors remained relatively buoyant at 3, 5 per cent per annum. non - gold mining output expanded by 3, 6 per cent per annum during this period, with coal performing well as the high price of crude oil lifted the prices of all energy - related minerals. although gold production contracted as ore grades were reduced to prolong the lives of mines, gold mining profits remained robust because of the high gold price. the high gold price of 1979 and 1980 acted as a buffer and protected south africa from the effects of the second oil crisis in 1979, ensuring record growth in 1980. however, this artificial boost did not last as the gold price declined from its $ 800 a fine ounce peak. fixed capital formation remained positive during 1973 - 83, although its average growth rate slowed down appreciably to 2, 8 per cent per annum. but final consumption expenditure by general government recorded the strongest growth rate amongst the expenditure components. during this period, its growth rate averaged 5, 3 per cent per year. as south africa became more isolated from the international arena, growth contracted. from 1983 to 1993 real gdp growth fell to a mere 1, 0 per cent average per annum. manufacturing grew at only 0, 3 per cent per annum, and confidence was shaken as international pressure, sanctions and internal dissatisfaction mounted. financial instability severely undermined the economy. consumer price inflation peaked at 20, 7 per cent in january 1986 and the prime overdraft rate rose from 14 per cent in 1983 to 25 per cent in 1984 before declining to 12 per cent at the end of 1986. the subdued gold price also impacted negatively on the economy. only agriculture, which is an inherently volatile sector, managed to grow at a rate in excess of the 2, 2 per cent per annum population growth rate. on the expenditure side, fixed capital

. i do also want to emphasize that we need to find the right balance between stricter regulation and intensified supervision. regulation alone, especially in the form of more regulatory capital, will not prevent the next crisis. the risk profiles of financial institutions vary across firms and countries, and they change over time. thus, regulation needs to be effectively combined with rigorous supervision and close monitoring. iv. closing remarks i have discussed the points to be remembered in discussing near - term economic policies at this critical juncture. but i have stopped short of showing a specific direction of policy actions. such policy actions should be mapped out by the policy authorities and people concerned with consideration of economic conditions. given that a crisis comes to the surface with a different face every time, what i can say here is that central bankers as well as executives of private financial institutions, who are all at this meeting, need to be humble enough to pay attention to various possibilities with consideration of historical lessons. thank you for your attention.