Johannesburg — WITH all the recent drama in South African sport it might not be advisable for us to draw correlations between any of the sporting codes and exports.

Suffice it to say that, as things stand, for both you need a very strong stomach.

The rand recently depreciated sharply against the currencies of our main trading partners. As we write the currency is at its lowest point since 2001. And just as quickly as the rand went south, so the talk started of South African exporters as world-beaters. It makes sense at first blush -- exporters, who get paid in dollars and euros are either raking in the rands or have become more competitive so can export more, while the inverse amounts to a nightmare for importers.

Unfortunately, the truth is not that simple. As economists we look at policies and circumstances that maximises the welfare of society, and a depreciating currency is not one of those.

Why? Well, if we boost our exports based on a depreciating currency we assume implicitly that a weak rand is our comparative advantage in world trade. The problem is that such a comparative advantage is not sustainable.

Firstly, the rand is a floating currency so the level is determined by supply and demand. This, together with the international tradability of the rand, makes the rand exchange rate volatile, so the "advantage" is likely to disappear once the rand starts to strengthen or appreciate. Therefore the advantage of a weak rand might be short-lived. This type of advantage will not attract long-term quality exporters that create sustainable jobs and stimulate economic growth.

Secondly, the rand depreciated due to fears of a global slump. If the world is heading for recession who is going to buy our exports? Eventually, we might need to lower our dollar prices to sell abroad. So much for the so-called comparative advantage.

Thirdly, many of the products that we export include imported parts or raw materials, or we use imported capital machinery to produce them. These goods must also be transported with imported fuel. Therefore, a weaker rand will increase production costs, forcing exporters to raise the rand price of their products.

Fourthly, there is a lesson to be learned from the 2001 rand collapse. Many businesses took advantage of the exchange rate to start exporting their products. Unfortunately, many of these exporters neglected their local markets. When the collapse turned out to be temporary these exporters found themselves without either market as exporting became difficult and importers were able to muscle in on neglected home markets.

Lastly, a weaker currency creates inflationary pressure, leading to either higher interest rates or a delay in interest-rate cuts. As interest rates are the opportunity cost of physical investment it might cause some potential producers to invest their money in the financial markets rather than to increase production.

SA's real comparative advantages only surface when the currency is stable and the government has created a conducive environment for exporters. A depreciating currency should not be seen as a comparative advantage. The goal should rather be a stable environment in which exporters will be able to plan for the future and in the process create sustainable jobs and stimulate economic growth.

Reyno Seymore and Riaan de Lange are lecturers in international economics at the University of Pretoria and are associated with the investment and trade policy centre of the University of Pretoria.