Foreign Affairs on India-Brazil-South Africa (IBSA) summit
briefing

14 October 2007

Ambassador Jerry Matjila

Good morning and thank you for coming to this briefing. I thought that this
morning I would deal with the substance issues around India-Brazil-South Africa
(IBSA) and to brief you on what will happen during this process.

First of all, I prepared a slide presentation of which you will receive
copies.

I thought I would take you through IBSA and where we are in the process.
What is important is the geo-strategic position between India and Brazil and
that is where we see a major advantage for South Africa – that we are at the
centre of the three countries.

Regarding India, we speak of a country with 1.1 billion people. According to
the World Bank India has a Gross Domestic Product (GDP) of US$806 billion. This
is very significant. India is a global player in terms of information and
communication technology (ICT) and other global products.

Regarding Brazil, the World Bank says the GDP of Brazil is US$882 billion.
This is the 2005 statistics. Brazil has a population of 186 million people. It
is very developed in terms of services and the automotive and agriculture
sectors. And then it has the second largest black population after Nigeria.
This is very significant.

Our own economy: US$242 billion in GDP, 47 million people according to 2005
statistics. We are a mining economy.

So these three countries have over 1,3 billion people. So this is very
significant as a combined market, and almost US$2 trillion if you put the three
together. This is very substantial. The statistics illustrate these are very
significant countries in their three sub-regions and are major players in their
sub regions.

In terms of trade between South Africa and Brazil, 2002 statistics
illustrate a slight improvement. We still have to a lot of work to enter the
Brazilian market. It is very apparent that we have to work very hard. We
therefore require reliable connectivity in terms of shipping and air links.

With India, our two-way trade has crossed the US$2 billion mark. Once more,
it does show that there is a huge potential in the Indian market and I think
both countries are working very hard to ensure value added trading
relations.

The two-way trade between the IBSA countries, between South Africa, Brazil
and India combined amounts to approximately US$30 billion in 2006. So we are
very optimistic that this forthcoming IBSA Summit will highlight the
opportunities available in each market.

The background of IBSA: it was conceptualised between 1999 and 2000 when
President Mbeki wrote letters to the Heads of State of India, Brazil, China,
Mexico, Nigeria, Egypt and Saudi Arabia and proposed the formation of the Group
of eight of the South. This is the origin of this project. President Mbeki then
followed this up with telephone calls and more and more discussions ensued. In
the end, it was agreed that we should begin with India and Brazil in 2003.

What are common about these three countries are their very vibrant
democracies, common views on major global issues and we are substantial players
in our respective sub-regional economies.

The project has developed into something that many developing countries have
begun to envy. The Heads of State meet twice a year, the Foreign Ministers meet
quite often, there is a lot of activity that has been going on. My colleagues
and I have had ten meetings as the IBSA focal point. We have exchanged ideas
with our colleagues regarding views on the common benefit for each of our
countries. We have noted that this grouping gives a lot of substance to
South-South dialogue and co-operation. It gives us a critical mass with which
to engage in global debate and dialogue. This is very significant because you
cannot ignore the voices of these three countries put together when you discuss
global issues.

And, when you say this it is very important because there is a lot of
synergy between the three countries. Above all, this grouping addresses a
combined population of 1,3 billion people with the economies totally US$ 3
trillion. So we can create and establish mechanisms to ensure that indeed,
there is a benefit for these economies.

We can create a maritime highway from India to South Africa as a hub, back
to Brazil. We can also create an aviation hub from South Africa to India. This
maritime highway is an issue we are vigorously pursuing given the huge trade
that flows around our shore. 80% of the world's trade flows around our shores
and the Indian subcontinent has a huge trade, as does Brazil and Latin America.
We really want to re-position South Africa to be centrepiece of this new
aviation and maritime highways. There is so much people-to-people engagement in
the IBSA project, more especially the three countries, in terms of human
resource development and technology transfer we can complement each other.
Above all, we want to explore the opportunity of employment and job creation
for our people.

The other engagement we have and are going to have is with the G-8 and G-8
processes on global issues. Both countries are adamant there is a need for
reform of the United Nations. We are linking our efforts and working very hard
to ensure the next round of Doha Trade Talks does succeed. And there will be an
exchange of ideas during this meeting on the issues of the Millennium
Development Goals (MDGs) and how we can work together to ensure the Doha Round
is a success.

I talked about the major sectoral activities we are planning to engage on.
Almost four major government departments of the three countries, not less than
17 ministries in the three countries are talking to each other. This is
unprecedented in the present global political situation.

We have established many working groups meeting from Monday. We have also
established many sectoral working groups. We are going to be launching two
working groups in South Africa, viz. one on climate change and one on human and
urban settlement. We are preparing to launch one on local government, water
affairs, business, public works and home affairs, so we will launch five more
working groups in India. At the end of 2008, it will be possible that 26
government departments and ministries will be talking to each other on broad
issues.

We are also looking increasingly closely at the issue of the IBSA Fund and
the impact of it. I think that in 2007 the Heads of State and government will
agree we should have a project in Burundi and HIV and Aids. This is very
important. Burundi has just recovered from war.

I think we will also be having a programme in East Timor on capacity
building.

We think that the US convened conference on the Middle East in November will
bring some movement to the Palestinian situation. We hope to launch a
capacity-building project to help the Palestinian government carry out its
functions and responsibilities.

We have just had a meeting in Delhi with the Ministers. The Ministers are
the executives of IBSA. The Ministers of Foreign Affairs of India, Brazil and
South Africa are the ones that ensure that major decisions are taken and
conveyed to the Heads of State and government.

We will for the first time see a meeting of the Parliamentary Forum. This is
a new development and parliamentarians from India and Brazil are beginning to
arrive in South Africa from today. They are going to have their own session on
Tuesday 16 October 2007. They are going to exchange issues and discuss how
their respective parliaments can assist the IBSA processes.

In an hour's time, the Woman's Dialogue is beginning. We have about 100
women in Sandton from Brazil and India. They will meet to discuss the gender
inclusive macro-economic framework. This is very significant given that both of
us are developing countries where so much work is being done by the women. They
will be discussing capacity building, skills development, a gender labour
management programme, co-operatives and macroeconomics. It will be two-day
meeting. This report will then be presented to the Heads of State and
Government on 17 October.

The same thing will be done with the Parliamentarians. For the first time
the outcomes of their report will be presented to the Heads of State and
government.

We have a journalist forum because we believe we need this forum for the
journalists. They met in Delhi a month ago. We have established an IBSA
editor's forum so we continuously exchange ideas on this. However, we thought
we should exchange journalists. As you are aware, we are hosting journalists
from India and Brazil for a week. They have been visiting South Africa because
we thought we should expose our journalists to each other. The same thing will
happen when we go to India next year. South African and Brazilian journalists
will visit India and the same with Brazil.

The other important forum that has begun work today is the civil society
forum. We believe it is very important to include civil society in processes
and not leave them behind. We felt they should exchange ideas of various issues
including development, poverty alleviation, etc.

The academics will also meet in Sandton from Monday to Tuesday. We have
Brazilian and Indian academics that have already arrived. Some are arriving
this morning. They will talk about major global economic and social imperatives
of the three countries and the world.

We will also look very closely at the challenges of connectivity and to
engage on economic growth and development to ensure greater research. We
thought our universities and researchers must meet to begin to imbue our own
people with credible information.

We will also have a business forum. We have close to 100 South African
businesspeople, 60 from India and 20 to 30 from Brazil participating in this
forum. So we will have the businesspeople meeting tomorrow.

We really thought we should make a major backstop with the Business Summit
where we will have to talk a lot about energy and climate change. Regarding
energy, we are trying to move towards companies with a focus on biofuels and
clean energy in order to address these high costs of energy in the three
countries. We have to move into the alternative fuels market.

South Africa is the leader in the mining industry amongst the three
countries. We have to move towards beneficiation. On Monday the energy sector
will engage in a research workshop. Sasol and PetroSA are taking the lead on
this matter in the energy sector. We have an advantage in the area of
technology and coal to liquid and gas to liquid fuels. Both India and Brazil
are looking towards this. About 40% of Brazilian fuel comes from biofuels. So
there will be a dedicated two day seminar on this matter specifically.

Another specific matter we will deal with is a workshop on maritime and
aviation issues in order to investigate this matter of implementing aviation
and maritime super-highways between South Africa, India and Brazil. We have
decided to have our operators and officials in this meeting in order to remove
whatever obstacles might be there. As I said earlier on, we are very close to
sign a shipping co-operation agreement between the three countries.

ICT is a very important sector so there will be a workshop on this
matter.

These are some of the meetings that will be held in the Sandton Convention
Centre.

On Wednesday, 17 October 2007 we will have the Ministers of India and Brazil
together with Minister Dlamini Zuma meeting at the Union Building to evaluate
where matters stand.

At 10h00 that morning the summit will take place at the Presidential
Guesthouse. For this summit we hope that a number of trilateral agreements –
shipping, ICT, energy. In Brasilia we signed the agreement on aviation
co-operation. That is why we have this dedicated focus on aviation and
maritime.

We are also working a lot on agriculture and co-operating in ICT. We have
finalised agreements on public administration, we this weekend finalised an
agreement on irrigation. Social development is almost final. We are working on
cultural co-operation. With energy, we hope that we can conclude this agreement
upon arrival of the Indians. And an agreement on customs and tax matters is
almost finalised. These are some of the very concrete issues on which we will
work.

We thought we should concentrate more on business-to-business co-operation
in the preparations for the summit. As government, our role is to create an
amiable atmosphere in which business can operate. We have to work on this
co-operation. So we are thankful that we have almost 180 business people from
India and Brazil with us for the next four days. We thought they could sit with
the Trade Ministers of India, Brazil and South Africa on Thursday. As you know,
the business people will sit with the Heads of State and Government at 11h00 on
Wednesday, 17 October 2007 and report to them and discuss with them the
challenges as well as the opportunities present in each of the three countries.
That is one of the centrepieces of this dialogue.

We are also trying to identify those impediments from our side that if dealt
with appropriately can fast track economic co-operation. We will also see in
this seminar, more movement on the free trade arrangements. They have been
meeting over the past few weeks between the three countries. They have really
moved to now being able to table proposals. The initial obstacles have been
overcome in this round.  We see the three regions talking. It was talking
between South Africa and India, South Africa and Brazil, India and Mercosur. We
will now be able to see the triangle closing and when the triangle closes we
will see movement towards greater sub-regional arrangements in terms of
Mercosur, South African Customs Union (Sacu) and India proposals.

All in all, we are expecting approximately 300 visitors from India and
Brazil to South Africa. We will move on the morning of 17 October to the
Presidential Guesthouse

Thank you

Questions and answers

Question: Ambassador what would be the issues that would be discussed on the
bilateral level between India and South Africa?

Answer: On the afternoon of Wednesday, 17 October 2007 President Mbeki and
Prime Minister Singh will have bilateral discussions on conclusion of the IBSA
Summit.

As you know, in November 2007 we will have the India-South Africa Joint
Bilateral Commission co-chaired by the Foreign Ministers of India and South
Africa.

As you know, the Heads of State and Government have been discussing how to
strengthen the dialogue between India and South Africa. First of all, we have
set ourselves a target on trade that we believe we can move towards, US$3 to 4
billion two-way trade.

Secondly, to encourage investments in both India and South Africa, I think
we are doing very well. We are seeing Indian and South African companies moving
into each others countries.

I think the Heads of State and Government will continue discussions began at
the G8 Summit on issues of UN reform, nuclear non-proliferation and nuclear
energy.  I think these will be the key issues discussed between South
Africa and India.

Question: Ambassador, can we expect an agreement between India and South
Africa to streamline the visa regime to fast track this trade and investment
movement into South Africa?
Answer: Indeed, we have moved since the Brasilia Summit. For example the
Indians also complaining about transit visas. This has now been abolished, for
South Africa or indeed any other Southern African Development Community (SADC)
country.

Secondly, they also complained about the duration of work permits for South
Africa. We have now increased this from two to four years.

Thirdly, a complaint was raised about the turn around time for the issuance
of visas in both Mumbai and New Delhi. We are now increasing capacities to deal
with the visa regime. We are working closely with, various Indian Commerce of
Industries. There are also about 4 500 Indians seeking political asylum. Some
have applied to South Africa for business reasons and eventually apply for
political asylum. So we clearly have to, both India and South Africa, to ensure
that bona fide businesses are not inconvenienced. At the same time, we have an
interest to ensure that people do not misuse the opportunity to get visas
quickly to come and overstay in South Africa.

Question: Ambassador, there have been some concerns that developing
countries, including India and Brazil (inaudible) have.

Answer: Fortunately, I have been involved in the Doha Trade negotiations for
many years. In our participation, I have always seen that both India and Brazil
are as enthusiastic as South Africa to conclude these negotiations. The three
countries are the leading countries in the G-20. In Hong Kong in December 2005
we formed this Non-Agricultural Market Access (NAMA). We did this because it
was very important to ensure the Round is concluded as quickly as possible. In
the centre of the Round is the issue of development. Developed countries who
are slightly advantaged should not overlook and undermine the need for the
development round. And then the question was when there is movement on
subsidies including external support for subsidies then you have to go to the
NAMA co-efficient formula to see what variables need to be put into place to
ensure the developed countries especially the United States (US) and European
Union (EU) should reduce subsidies substantially especially on export. Then
developing countries must show flexibility and open up. It is a really delicate
balancing act.

There is a feeling in the EU and US that they have moved and are now waiting
for Brazil, India, Mexico and South Africa to move. The G-20 says you have not
moved substantially in terms of NAMA issues and therefore more movement is
required. We understand there is some rethinking in the EU to put more
proposals on the table to accommodate the issues around external support for
agricultural subsidies. I know that Brazil, India and South Africa have also
moved to show flexibility in terms of industrial market access. So I think we
are all looking for additional movement from the US and EU and I think that
will trigger movement from the major developing countries in terms of
industrial and other processes. The major issue is going to be around services.
I think there is going to be some flexibility. We do not expect the least
developing countries like Lesotho, Botswana, etc to follow suit if India,
Brazil and South Africa make some concessions. We don't expect the US and EU to
demand the same response from the weaker countries. This is where the challenge
lies with developing countries: who will open and who will not? We believe we
should protect the most vulnerable from the pressure of opening up their
markets from the EU and US.

Question: Ambassador, are there any plans to develop co-operation in nuclear
energy since India and South Africa have advanced capabilities in this
regard?
Answer: As I was saying earlier on, there is a discussion taking place on the
broader field of energy from fossil fuels to other sources. There is a
discussion that is looking at every area including nuclear energy for civilian
use, wind energy, biofuels, solar energy there is a whole basket of issues at
which the three countries are looking.

You know we have this ambitious target in South Africa that by 2025 we will
have 20 to 40% of our energy from nuclear sources. This is very ambitious. I
see the same ambitions from India and Brazil so there are growing possibilities
we can explore wind and solar energy, biofuels. We can also begin to move into
these areas.

You will see a commitment in the declaration where you will read, the three
countries wholly promotes the utilisation of nuclear energy for peaceful
purposes. That is what you will read in the Declaration that will be adopted by
the Heads of State and Government on Wednesday, 17 October 2007. There will
then be the possibility of us increasingly working together to advance in this
area. We also say we do so bearing in mind the position and regulatory
framework of the International Atomic Atom Agency (IAEA). We will not exceed
these regulations. We will remain open so that there will be no suspicions as
we embark upon this road. This is a common understanding I hope we will reach
during this summit. There is an affinity towards biofuels and there is nothing
stopping us from looking at nuclear energy for peaceful purposes.

Issued by: Department of Foreign Affairs
14 October 2007