Ministers and Deputy Ministers of the Republic of South Africa and India
The South African High Commissioner to India
His Excellency Reverend Majeke
Honourable, Hari Bhartia
President of the Confederation of Indian Industries
Ms Futhi Mtoba, President of Business Unity South Africa
Captains of commerce and industry
Distinguished guests
It is indeed an honour and a privilege to be in the presence of distinguished individuals representing some of the most important companies in the developing world today.
Our visit to your shores seeks to confirm the historic significance of our relations and an unfaltering desire and commitment to ensuring that our bilateral relations are broadened, deepened and strengthened. India is an important partner of South Africa at many levels, politically, socially and economically.
We are here on a State visit to reconfirm that assertion, and ensure that we work further to deepen the already warm relations between our two countries. I have brought along Cabinet Ministers representing such important areas as communications, trade and industry, agriculture, public enterprises, transport, and a business delegation of more than 200 companies, eager to do to business with this country.
We seek to strengthen and broaden our economic and commercial interaction with the intention of enhancing bilateral trade and investment. As you continue to interact, do that in the confidence that there is sufficient political will and support from both leaderships.
As South Africans, it is our hope that our state visit will provide the necessary impetus to assist our private sector in coordinating their initiatives with their Indian counterparts, thus creating the opportunity to influence one of the world largest markets.
We seek to jointly work with our Indian counterparts to deepen our South-South cooperation and interaction, with a view to strengthening the voice of the developing world and its capacity to address the needs of its people. By whatever measure, India’s transformation has been one of the most breathtaking in recent economic history.
In its wake it has highly influenced several countries to consider changes in their industrial and economic policies and will continue to do so in decades to come. A decade of continued growth in the midst of the recent economic crisis has left India as one of the world’s largest recipient of foreign direct investment.
Ladies and gentlemen,
We believe that in India, South Africa has an ally whose trade and investment opportunities provide the necessary synergies and complementarities in services, products and technologies. It is our conviction that these linkages will assist South Africa’s long-term capacity to effectively compete in the global economy. We have identified India as a strategic partner for South Africa with good reason. This country boasts a burgeoning middle class of approximately 300 million. India’s sustained economic growth has continued unabated at a rate of five percent over the past decade; and of course the Indian economy has grown from 250 billion US dollars in the early 1990s, to over 1 trillion US dollars, outperforming many developing economies.
Income per capita also grew at the same rate, explaining the massive increase in personal wealth. India is also the world’s 12th largest economy, with a nominal gross domestic product of more than eight trillion rand. By converting nominal gross development (GDP) to total purchasing power, it ranks fourth, but in terms of purchasing power parity per capita, or the number of goods and services each citizen can buy with his or her money, it comes in at 128th.
As all of us are aware, the global economy is experiencing unprecedented change, whereby the dynamics of international trade are spurring new markets of growth. In this era the traditional economies such as Europe and the Unites States, are being joined by the new engines of development emanating from the developing world, with countries such as India and South Africa leading the change.
In the last decade the Indian economy has undergone significant reforms and delivered unsurpassed and consistent growth. It is now poised to embark on another important growth phase, where the Made in India” tag has joined the ranks of other global producers. The presence of Indian companies has been stamped in international markets.
It is within this context that I want to talk about the opportunities that this South–South cooperation presents. South Africa recognises the fact that in order to strengthen the South African brand globally, it is imperative to invest all our efforts as a country in making sure that the environment remains conducive for investments and potential investors.
The World Bank Group’s Annual Doing Business Report for 2010 compared global regulation in 183 countries, from these global economies, South Africa ranked 34th for ease of doing business. In terms of overall competitiveness, South Africa was ranked 45th ahead of countries such as Poland and Mexico.
South Africa was also ranked 18th most attractive Foreign Direct Investments (FDI) destination world-wide, according to the 2007 Foreign Direct Investment Confidence Index compiled by the global management consulting firm, AT Kearney.
Our economic analysts back home and elsewhere in the world are of the shared view that we are technically now officially out of recession.
At this stage, we are informed that our manufacturing output in December 2009 was three percent higher than in the corresponding month in 2008 – representing the first annualised increase for 14 months. Although there remains some uncertainty about the depth and rate of our recovery, forecasts suggest GDP growth of 2,5 percent his year, 3,7 percent next year rising to 4,5 percent in 2012.
The South African Government will continue to play its part in supporting this economic recovery, while at the same time finding creative ways of facilitating economic growth. The bedrock of our government’s intervention is its commitment to an R787 billion infrastructure investment programme that will be spread over a three year period.
The economic potential of the South Africa is clearly evident, especially when one looks at the diversity of our sectors and industries. Our trade and investment opportunities for the Indian business sector lie in environmental technologies, ICT, transport equipment, capital equipments, creative industries and financial services.
Distinguished guests, ladies and gentlemen,
Our government is confident that it has achieved significant successes in the area of macro-economic stability. In this regard, the implementation of macro-economic policies has and continues to be directed at promoting domestic competitiveness, growing the economy and increasing opportunities for employment.
It is also worth mentioning that our Department of Trade and Industry has recently launched the second phase of our industrial policy – presented as a three year Industrial Policy Action Plan. This Action Plan represents a significant step forward in strengthening our efforts to promote our long term industrialisation. Our industrial policy seeks to expand production in value-added sectors to promote the creation of decent jobs.
The economic relations between our two countries are already very strong and powerful. Just last year, total trade between South Africa and India was in excess of 4,5 billion US dollars from a negligible 45 million US dollars since the establishment of diplomatic relations in 1993.
I am truly heartened that in the last few years we have seen a dramatic escalation in the participation of major Indian companies in South Africa with investment stock from India amounting to six billion US dollars.
These investments are contributing to a heightened profile, as companies such as TATA, Nalco, CIPLA, Apollo, Godrej, Genpact, Aegis, Mahindra & Mahindra, Ashok Leyland and Aurobindo Pharmaceuticals feature among the key investors in South Africa.
South African investment into India has also been growing steadily. Those who have made inroads include Tiger Brands, Airports Company South Africa and Bidvest SAB Miller, First Rand Bank, Standard Bank, Old Mutual, Balela Leisure, Anglo-American, Sasol and Nandos Group Holdings.
Given the growing trade relations, I welcome the reconstitution on the India-South Africa CEO’s Forum as an institutional mechanism for closer business interaction. I therefore challenge Indian and South African business to work towards raising bilateral trade to 10 billion US dollars by the year 2012.
Whilst our trade has been focused on the exchange of valuable commodities, raw materials and feedstock, we believe true potential benefits lie in the expansion of value added trade. The recent inclusion of products such as vehicles, automotive components and pharmaceuticals in the basket of traded goods is a positive signal of things to come.
In this regard, several areas promise exceptional returns for those businesses that are willing to take the initiative. These include fields such as mining, capital equipment, defence, aerospace, infrastructure, autos and components, energy, agro-processing and information and communication technology (ICT) to name a few. Beyond the lucrative opportunities the South African market offers, cooperation with our companies also offer unique opportunities to enter the broader African market.
Currently, South Africa is the largest investor within the African continent, with our companies having gained valuable expertise, knowledge of the business culture in the continent and the required combinations to succeed in this promising market.
The Southern African Development Community (SADC), with a market size of over 500 Billion US Dollars and a population of 200 million people, is but one of the examples of the potential in Africa. By combining expertise and identifying synergies, Indian and South African companies can establish successful partnerships. Such partnerships will not only deliver benefits to our enterprises, but also contribute to the development of the continent within the New Partnership for Africa's Development (NEPAD) framework.
Within the continent, key projects have been identified in fields such as infrastructure, energy and ICT. The demand in these areas offers significant opportunities, and in light of the Indian government’s own financial and other pledges to the NEPAD programme, should be of interest to Indian enterprises.
At this point it is also important to note the unprecedented India - Brazil - South Africa (IBSA) initiative. As a component of IBSA, the three countries are focussing on establishing a framework that would support increased trade and investment amongst the three countries. More specifically we are looking at leveraging industrial and commercial synergies towards increased global competitiveness for our respective countries. In support of this, initiatives around promotion activities, aligning regulatory environments and addressing barriers to trade are being explored.
As I conclude, I wish to reiterate that South Africa is open for business. We encourage new investments and collaborative partnerships in key areas such as ICT, transport, agriculture, services, and mining. We look forward to welcoming you into our country and working with you to ensure a mutually productive and profitable experience for the companies who invest and trade in our country.
South African companies offer exceptional partners, not only for our markets, but also the broader African continent and the world.
At this stage, let me wish you success in your business interaction.
And on behalf of all South Africans, I look forward to welcoming you and your families to our shores when you join us in celebrating the first ever World Cup on the African Continent.
I thank you!
Enquiries:
Vincent Magwenya
Cell: 072 715 0024
Issued by: The Presidency
3 June 2010
Source: The Presidency (http://www.thepresidency.gov.za/)
