Indonesia
17 April 2006
Tshwane â South African Deputy President Phumzile Mlambo-Ngcuka, supported
by Deputy Foreign Minister Aziz Pahad, will pay a working visit to Japan and
Indonesia scheduled from Wednesday to Thursday, 19 to 20 April, and Friday to
Tuesday, 21 to 25 April 2006, respectively.
The visit by Deputy President Phumzile Mlambo-Ngcuka to Japan and Indonesia
comes within the context of South Africaâs priority to strengthen North-South
and South-South relations for increased market access, trade and investment. In
this regard, the visit is also aimed at popularising South Africaâs Accelerated
and Shared Growth Initiative for South Africa (AsgiSA) and Joint Initiative for
Priority Skills Acquisition (JIPSA) while investigating areas of co-operation
and skills transfer between South Africa and Indonesia and Japan.
In addition, the visit to Indonesia comes a year after the historic
Afro-Asia Conference that commemorated the Bandung Conference of 1955. At the
2005 Afro-Asia Conference, leaders of African and Asian countries committed
themselves, through the New Africa-Asia Strategic Plan, to consolidating
economic relations between both continents that adequately reflected the strong
socio-political links between Asia and Africa.
Working visit to Japan
Deputy President Phumzile Mlambo-Ngcuka will hold discussions with Prime
Minister Koizumi during her visit to Japan. Deputy President Mlambo-Ngcuka is
also scheduled to pay a courtesy call on Crown Prince Naruhito who is the
eldest son of Emperor Akihito. Discussions will focus primarily on how Japan
can contribute to the successful implementation AsgiSA and JIPSA.
The aim of the visit is also to consolidate and strengthen the existing
cordial political relations between South Africa and Japan. Deputy President
Mlambo-Ngcuka will also hold discussions with the:
* President of the Japan International Co-operation Agency (JICA) Sadako
Ogata with a view to popularising and seeking support for AsgiSA and JIPSA.
Discussions are likely to focus on empowerment of South Africaâs Second
Economy, providing human resource development support to JIPSA and trilateral
co-operation initiatives;
* Chairperson of the Japan External Trade Organisation (JETRO) Osamu Watanabe
during which discussions are likely to include increased market access between
Japan and South Africa;
* Governor of the Japan Bank for International Co-operation (JBIC) during which
discussions will focus on the Enhanced Private Sector Assistance (EPSA) for
Africa in partnership with the African Development Bank (AfDB);
* Vice-Chairperson of Toyota and South African Honorary Consul to Japan Mr
Nakagawa during which discussions are expected to focus on private sector
involvement with the recapitalisation programme of Further Education and
Training institutions in South Africa;
* President of the House of Councillors Mrs Oogi who is also a member of the
South Africa-Japan Parliamentary Friendship League. The League has played an
important role in strengthening relations between the two countries.
Discussions are expected to include the enhancement of Japanâs relations with
the Pan-African Parliament under the auspices of the Tokyo International
Conference for African Development (TICAD);
* President of the Sanko Steamship Company and Kenji Kanda, President of the
Kanda Shipbuilding Company;
* Business executives from Keidanren (Japanese Chamber of Commerce)
Deputy President Mlambo-Ngcuka will depart from Japan on Friday, 21 April
2006, ahead of her working visit to Indonesia.
Working Visit to Indonesia
Deputy President Phumzile Mlambo-Ngcuka is expected to hold bilateral
political and economic discussions with her Indonesian counterpart Vice
President Jusuf Kalla in Jakarta, Indonesia, on Monday, 24 April 2006.
Issues on the agenda are expected to include, among others:
* The status of bilateral political and economic relations between both
countries;
* Co-operation between Southern African Development Community (SADC) and
Association of Southeast Asian Nations (ASEAN);
* Reflection on the New Africa-Asia Strategic Plan â developments since April
2005 and the way forward in the consolidation of economic relations between
Africa and Asia;
* Developments in Africa including the consolidation of institutions of the
African Union (AU) and AsgiSA and JIPSA;
* Suggested areas of co-operation between countries including mining, energy,
telecommunications, infrastructure, small, medium and micro-enterprises (SMMEs)
and tourism;
* Global governance including World Trade Organisation (WTO) discussions and
the comprehensive reform of the United Nations (UN) and
* Other issues of mutual interest including the situation in the Middle
East.
While in Indonesia, Deputy President Phumzile Mlambo-Ngcuka is also expected
to pay a courtesy call on Indonesian President Susilo Bambang Yudhoyono and
Chairman of the Parliament Agung Laksono, present a lecture at the Indonesian
Council of World Affairs and hold discussions with representatives of the
Indonesian Chamber of Commerce and Industry.
Deputy President Mlambo-Ngcuka is also expected to visit Solo in Central
Java and Makassar in South Sulawesi. In Java Deputy President Mlambo-Ngcuka
will meet with the Governor Mr Mardiyanto and the Mayor of Solo Joko Widodo,
hold discussions with the Java business community, visit handicraft and batik
centres and meet with SMMEs that support the tourism and industry.
In South Sulawesi, Deputy President Mlambo-Ngcuka will meet with the
Governor of South Sulawesi and Mayor of Makassar, hold discussions with
political and religious leaders of South Sulawesi, visit the Centre for
African-Asian studies at the University of Hasanuddin, visit handicraft centres
and meet with SMMEs that support the tourism and industry. Deputy President
Mlambo-Ngcuka is expected to return to South Africa on Wednesday, 26 April
2006
Background
Bilateral Economic Relations between South Africa and Japan
Japanâs economic policy toward African development taken in its entirety is
directed within the Tokyo International Conference on African Development
(TICAD) process which was first held in 1993. TICAD has led to the
implementation of projects aimed at increasing African human resource capacity,
infrastructure development and investment.
In the context of the Gleneagles G8 Summit held in July 2005, Prime Minister
Koizumi committed Japan to holding TICAD IV in 2008 in an effort at making
TICAD the cornerstone of Africa-Japan relations. Japan has long advocated the
importance of ownership of the development process by Africa in partnership
with the international community.
At the Africa-Asia Summit in April 2005, Japan pledged to double their ODA
to Africa in the next three years. Such ODA will amount to 0.7% of Japanâs
gross domestic product (GDP). Japan is of the opinion that, based on the Asian
experiences, the key to African economic development is to foster the private
sector through the promotion of trade and investment. In line with this, Japan
hosted the TICAD Asia-Africa Trade and Investment Conference in November 2004.
For Japan, South Africa is a strategic partner in the furthering of their
Africa strategy. Japan views their support to South Africa as a gateway to the
rest of Africa and as a result both countries are exploring tripartite
co-operation on specific projects as the new frontier for co-operation between
South Africa and Japan.
Trade and Investment
In 2005, Japan was South Africaâs third most important trade partner
internationally and for several years has been South Africaâs most important
trade partner in Asia. Japan is a large investor in South Africa despite the
fact that the investment accounts for 0.3% of Japanâs outward Foreign Direct
Investment (FDI).
Japan considers South Africa a very important trading partner for two
reasons; of the total sub-Saharan regionâs GDP South Africaâs economy accounts
for 40% and South Africa is rich in natural resources, specifically gold,
diamonds, platinum and white gold. Japan sees South Africa as the gateway to
Africa and as such, opportunities in trade and investment are considerably
expanded. South Africa is a reliable source of raw materials and is seen as a
market for manufactured goods.
South Africaâs main exports to Japan in 2005 were as follows: Platinum
(35.4%), motor vehicle (23%), wood chips (10%), Aluminium (8%), Ferro Alloys
(10s%), Manganese (4%) and Citrus (1.1%). South African imports from Japan
consist mainly of machines, mechanical appliances, vehicles and measuring and
photographic equipment. South Africa exported vehicles worth more than R7
billion to Japan in 2005.
It is estimated that almost all the minerals and more than half of South
Africaâs total exports are imported by not more than 20 Japanese companies, all
of which have offices in South Africa, including Japan External Trade
Organisation (JETRO) and Japan International Co-operation Agency (JICA). There
are approximately 63 Japanese companies operating in South Africa.
Direct investment in South Africa by Japan:
* Fiscal 2002: five cases, 12,9 billion yen. (R675 million)
* From Fiscal 1993 to fiscal 2002, total: 39 cases, 95 billion yen. (R4.97
billion)
* Which include among others:
- Nissan Diesel Motors Co. (Auto)
- Mitsubishi Chemicals (Chemicals)
- Itochu Corporation (Metals â Ferro manganese)
- Sumitomo Corporation (Metals)
- Marubeni (ICT)
- Toyota Motor Corporation (Auto)
The investment has contributed in a marked degree to the creation of jobs as
well as having other down-stream results. The transfer of technology, which has
also accompanied Japanese investment, is of long term importance to South
Africa. There is a concerted effort being made to develop and co-operate in the
food and textile industry.
Trade Statistics (2002-2005)
2005
Exports: R33,156,988
Imports: R23,750,596
Trade Balance: R9,406,392
2004
Exports: R26,601,871
Imports: R20,942,096
Trade Balance: R5,659,775
2003
Exports: R24,172,021
Imports: R18,236,646
Trade Balance: R5,935,375
2002
Exports: R24,783,866
Imports: R19,122,094
Trade Balance: R5,661,772
Bilateral Economic Relations between South Africa and Indonesia
Trade between South Africa and Indonesia has expanded fast (more than 300%
since 1993) with the trade balance in favour of Indonesia. South Africaâs main
exports to Indonesia include pulp and waste paper, cotton, flat and rolled
steel and iron ingots, while its main imports are vegetable oil, natural
rubber, textiles, timber, paper, plastics, footwear, stone and plaster.
Bilateral trade with SA: SA R3,853,943 million
* Main exports to SA: Vegetable oil, natural rubber, fabrics, paper and
paperboard, furniture
* Main imports from SA: Pulp and waste paper, cotton, steel, iron ingots,
aluminium
Investment
Indonesian investment in South Africa
There has been very little Indonesian investment in South Africa to date.
The reason for this is that Indonesia is still very much a developing country,
which has not yet reached the stage of active outward investment. However, in
1997 an Indonesian company purchased ostrich farms to the value of R300
million.
South African investments in Indonesia
There is increasing investment by South African companies in the vast
mineral reserves of Indonesia, that include nickel, copper, silver, gold.
Gencor (Ingwe) is active, with Iron and Steel Corporation (Iscor),
Anglo-American, and Plessey also showing interest. Murray & Roberts has an
office in Jakarta and is hoping to obtain civil construction contracts in the
infrastructure sector. In addition, Thebe Investment has signed an agreement
with Indonesian-owned trading company PT. Prima Comexindo. One of the biggest
SA information technology companies, M-Web, has a huge investment portfolio of
USD16 billion in Indonesia.
Enquiries:
Ronnie Mamoepa
Cell: 082 990 4853
Issued by: Department of Foreign Affairs
17 April 2006
