Replies by President Jacob Zuma to questions for oral reply National Assembly

Question 18

Mr M G P Lekota (Cope) to ask the President of the Republic:

(a) Which (i) countries have been identified as high potential trading partners and (ii) of these countries have been visited by him accompanied by a delegation of Ministers and business people, (b) what was the selection criteria for the business delegations to each of these countries, (c) what benefits were derived in terms of job creation and poverty alleviation and (d) what was the total expenditure to the state for these official visits?

Reply:

One of our main foreign policy goals is to ensure that our foreign relations contribute to the creation of an environment conducive for economic growth and development, especially in Africa and other developing countries.

The expansion of foreign trade is a means to an end, which is to improve the quality of life of all South Africans.

It must enable us to grow our economy and contribute to the creation of decent work, improved health care and education, rural development, safer communities, social security and other priorities of this government. Business representatives are invited to state visits to encourage and promote economic cooperation between South Africa and a particular country.

The Department of Trade and Industry constitutes the business delegation in consultation with representatives of organised business in South Africa, Business Unity South Africa (BUSA).

The decision to participate in a visit lies with the businesses themselves depending on their interests. However, we also have to look at South Africa’s national interests, in particular what would benefit her people and advance the government’s domestic agenda.

Visits of this nature create investment opportunities which have a positive impact on the South African economy. The Southern African Development Community (SADC) member States, most of whose economies are integrated with that of South Africa, are our country’s major trading partners.

African countries in general, have a huge potential to become South Africa’s major trading partners, given their endowment in natural and mineral resources. The socio-political and economic reforms currently underway in Africa have created favourable conditions for South African investments in a wide range of sectors such as construction, financial services, information and communications technologies and agriculture.

To date, in Africa, we have undertaken outgoing State visits to Angola, Lesotho, Zambia and Uganda. Outside the continent we have undertaken state and official visits to the United Kingdom, Brazil, Russia, India and China.

On the visit to Angola, we were accompanied by eleven Ministers and a businessdelegation of more than one hundred and seventy people, identified by Business Unity South Africa (BUSA) working with our Department of Trade and Industry.

The sectors represented included mining, energy, electricity, construction, retail, communications, transport, and agribusiness. A number of Agreements and Memoranda of Understanding between the two countries were signed, including Memoranda of Understanding on Trade and Industry Cooperation.

During the visit to Zambia in December last year, I was accompanied by seven Ministers, two Deputy Ministers and a business delegation. In this successful visit, two Agreements and four Memoranda of Understanding were signed and we will continue to explore the great potential in economic relations.

Last month, I visited the Kingdom of Lesotho, accompanied by seven Ministers, one Deputy Minister, the Speaker of the National Assembly as well as a business delegation. Lesotho is an important neighbour of South Africa, as evidenced by the Lesotho Highlands Water Project which supplies seven hundred and eighty million cubic metres of water to the Gauteng province every year.

The Honourable Member is aware that South Africa continues to face a challenge of water scarcity and as such, South Africa is currently finalising the modalities of Phase Two of the Lesotho Highlands Water Project, which is expected to increase the supply of water to South Africa. I visited Uganda accompanied by seven Ministers and more than 50 business persons.

Amongst other agreements, a Ministerial Declaration on trade cooperation was also signed that would allow for deeper engagement and proper alignment of efforts to expand trade between the two countries.

A number of South African companies have a presence in Uganda and rely on South African expertise and products in growing their market, thus increasing employment opportunities in both South Africa and Uganda.

Uganda also has a promising oil and mining industry which is of interest to the South African industry. European countries identified as key trading partners include Germany, the United Kingdom, Italy, France, The Netherlands, Belgium, Switzerland, Spain, Sweden, Ireland, Austria, Czech Republic, and the Russian Federation.

On the visit to Russia last month, I was accompanied by eleven Ministers and over one hundred and fifty business people. The business delegation represented the sectors of banking; education; agriculture; health, energy; mineral resources; water and environment; science and technology.

Several benefits will result from this visit in the long term. The Department of Tourism had good engagements with Russia Tour Operators and Tourism Organisations to attract the growing and high spending Russian tourists to South Africa.

Extensive negotiations on the Draft Agreement on Mutual Recognition of Qualifications will facilitate education and skills development partnerships will contribute to address South Africa’s skills and competitiveness challenges, particularly in the science and technology fields.

Scholarships have been offered in the areas of nanotechnology, biotechnology, high speed computing and space engineering. Already over 60 young researchers have benefited from exchanges and research partnerships with Russia in the space research area.

A Memorandum of Understanding was concluded between the South African and Russian space agencies which allows for South African scientists and institutions to access Russian data on earth observation.

This contributes to sustainable agriculture and water management, soil and nature conservation, drought prediction and management and to the development agenda of government on the whole.

A commercial contract for the supply of nuclear fuel was concluded between Eskom and the Russian Company Tenex. This will allow for the continued supply of nuclear fuel to South Africa by Russia and will enhance and improve the operational and power generating capacity of Eskom.

Information on the highly successful United Kingdom State Visit has been presented in this House previously. We visited China last month, South Africa’s largest trading partner and a substantial investor in the country. The two Presidents co-signed the Declaration on the Establishment of a Comprehensive Strategic Partnership, which we both view as the beginning of a new chapter in the bilateral relations between the two countries.

Amongst the benefits, China has committed to work towards more balanced trade and to encourage its enterprises to increase investment in South Africa’s manufacturing industry.

 The two countries will encourage companies from each side to explore cooperation opportunities in mineral beneficiation as well as infrastructure construction projects such as the green economy, roads, railways, ports, power generation, airports and housing. Sixteen contracts were signed between South African and Chinese companies.

Saudi Arabia, the United Arab Emirates and all the countries of the Americas and Caribbean have been identified as high potential strategic trading partners. In this region, we visited Brazil in October 2009, and the President of Brazil undertook a reciprocal visit in July this year.

For the State visit to Brazil, the criteria included those companies with a presence in Brazil, those in a trading relationship with Brazil and those with an interest to establish a presence in Brazil in future.

An MoU on Cooperation in the Promotion of Trade and Investment was signed by Ministers of Trade and Industry, which is assisting us to find concrete ways to eliminate barriers to trade. Subsequently South African exports to Brazil have been improving.

Secondly, the State Visit of October 2009 assisted to create further interest in cooperation and sharing of expertise in the fields of Social Security and Social Development and other priorities.

In addition, the interaction with Brazil is a further step to strengthen relations with IBSA, the India-Brazil-South Africa initiative. The northern American countries of Canada and the United States are key and strategic trading partners of South Africa. However, I have not as yet undertaken a visit of this nature to that region. We have only undertaken visits of a multilateral nature thus far.

Japan is also a strong trade and investment partner. In three of the last five years it was South Africa’s top export destination and South Africa enjoyed a 26 billion rand trade surplus with Japan in 2008. Two way trade dropped in 2009 due to the global economic crisis and exports to Japan were overtaken by exports to China and the United States.However, South Africa still maintained a healthy trade surplus, although less than in 2008.In 2010, trade with Japan is recovering but has not yet reached 2008 levels.

We prefer to view the expenditure on these visits not as cost but as an investment in building relations that will help us meet our political, social and economic relations. It is worth noting as well that for outgoing visits, some expenses become minimal as the host country usually extends courtesies to the visiting South African delegation, meeting the accommodation and ground transport cost of the President and a certain number of delegates, as per standard international practice amongst States.

We estimate the investment in the Angola State visit to having been in the region of more than three million rand, Zambia at more than two hundred thousand rand and Lesotho to more than half a million rand. We invested more than a million rand on the Ugandan visit.

Information pertaining to the expenditure of the visits to China, Russia and India is not yet available.

Enquiries:
Zizi Kodwa
Cell: 082 330 4910

 

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