P Mlambo-Ngcuka: South Africa Italy Business Forum

9 July 2007

Deputy Prime Minister and Minister of Foreign Affairs, Mr Massimo
D'Alema
Ambassador of Italy to the Republic of South Africa
South Africa's ambassador to Italy
Members of the delegation from Italy
Distinguished members of the South African business community
Ladies and gentlemen

Introduction

It is a great honour and pleasure for me, on behalf of the people of my
country, to welcome Deputy Prime Minster D'Alema and his delegation to the
beautiful Republic of South Africa.

I understand that from here the Deputy Prime Minister and his delegation
will visit, among others, the provinces of KwaZulu-Natal and the Western Cape.
I can assure you, that you will go back home with rich and unforgettable
memories and experience that attest to the beauty of African eco-tourism and
the hospitality of South Africans.

I would like to underscore the importance of this forum as not only serving
the purpose of improving trade relations but also promoting people to people
interactions amongst our peoples.

Diplomatic relations

South Africa and Italy are best friends. Ours are tried and tested relations
that hold great opportunities for the future of both our countries. Indeed,
bilateral engagements between us have and will continue to intensify.

It is on this basis that, in the year 2003, we mutually acknowledged the
need to deepen our relations even further by signing a Memorandum of
Understanding (MoU).

The signing of the MoU served to cement a diplomatic relationship that had
already been blossoming. President Mbeki had in 2001 visited Italy, on the
occasion of the World Food Summit. The following year, President Carlo Azeglio
Ciampi also paid a State Visit to our country. These visits form the solid
foundation through which Business Unity South Africa (BUSA) and Confindustria
can consolidate their relationship.

However, the MoU has served a strategic purpose in structuring and taking
our bilateral relations to higher levels. Since 2003, the number of diplomatic
and business engagements has increased by leaps and bounds. In May the same
year, South Africans were honoured and pleased to receive a business delegation
from Italy led by the governor of the Lombadry Region, Mr Roberto
Formigoni.

It is, among others, on the basis of the foundation laid by this visit that
our business association, BUSA signed a MoU with Confindustria, an important
business player in Italy I was made to understand.

In the context of the MoU President Mbeki paid a visit to Italy in May 2005
and met with a number of Italian political and business leaders, including
President Ciampi as well as former Prime Minister Berlusconi.

Indeed, the MoU has made it possible for both our governments to meet and
consult with each other on regular basis regarding issues of mutual interest.
It is within this context that our Foreign Minister, Dr Nkosazana Dlamini Zuma,
met with her Italian counterpart, Minister Gianfranco Fini last year in
November.

These are only highlights of a diplomatic relationship that could aptly be
described as one that defies the constraints imposed by distance and geographic
space. Our meeting here today further attests to that reality.

Trade relations

In the area of trade, Deputy Prime Minister D'Alema will be pleased to know
that Italy ranks amongst our country's top 10 trading partners. We will,
therefore, understand why we value Italy so much.

For the past few years, trade between our two countries has been growing
steadily, reaching R23 billion last year. Italian companies are among those
that have taken advantage of the sound economic management of the
democratically elected government and the thriving business environment we have
created over the past 13 years.

South Africa also wishes to strengthen its role in the region, primarily
through New Partnership for Africa's Development (Nepad) and the African Union
(AU) and in this regard deepened trade relations with influential players like
Italy are paramount.

Italy also has a firm understanding of the needs of the developing world and
therefore has been able to advocate for these through its position in the Group
of Eight (G8).

South African business stands to learn many lessons from Italy, especially
in the context of Italy's very robust Small Medium and Micro Enterprises
(SMMEs) sector.

I'm told that companies such as Fiat and Parmalat are household names in the
Italian business world. These are among the many Italian companies that have
also become household names in our country, serving as living examples of the
success business story South Africa can and must tell. The number of joint
ventures between companies from both our two countries particularly in our
mining sector is encouragingly rising.

Indeed, South African companies also have a good story to tell about the
enormous business opportunities that Italy has on offer. Companies such as
South African Breweries (SAB) Miller, Sasol and Dimension Data are some of our
companies that have done very well in Italy. We are beginning to observe
encouraging signs that more and more South African companies are following the
path charted by companies such as Sasol.

The challenge is, of course, to narrow the balance of trade which is
currently in favour of Italy so as to ensure that our countries benefit
mutually from our trade relations. However, this should be done without holding
back the currently levels of investment from both our countries.

In that context, our country stands to benefit from more and more investment
from Italy. As I have indicated above, ours provides one of the friendliest
business environments in the world. South African is ranked 28 in the World
Bank Investment Climate Survey.

This is a ranking earned on the basis of a solid and good track record. The
sound macro-economic management frameworks put in place since 1994 have lead to
a steady economic growth. For the past 13 years, our economy has been
experiencing a positive growth as opposed to the 20 years before 1994.

For the past three years we have been registering an annual growth rate of
5% and creating 500 000 jobs per annum. Government is confident that we will be
able to achieve our targeted annual growth rate of at least 6% as of 2008.

Growth and Accelerated and Shared Growth Initiative of South Africa
(AsgiSA)

Infrastructure is the leading sector that is contributing to the
unprecedented economic growth that South Africa is currently enjoying. In this
sector there is a huge demand for capital goods. South Africa would welcome
collaboration with Italy the provision of these goods.

However, one of the binding constraints that limit the growth trajectory is
the deficit of skills. This is particularly prominent in the engineering sector
as well as artisans.

South Africa is also keen to work with Italy around initiatives that
increase government capacity. This would be for the greater goal of increasing
service delivery and of course reducing the bureaucratic red tape that often
hinders international business players.

In South Africa we have what is called a second economy. This economy refers
to those people of the population that have been unable to participate in the
formal economy, in other words, they are marginalised from the mainstream
economy. These are the people that SMME interventions are targeted at. As
previously mentioned, Italian business has a lot to teach South African in the
terms of SMMEs and we look forward to that collaboration.

There are a number of sectors where collaboration is feasible such as the
textile industry and especially in clothing design. Furthermore, in the
jewellery sector Italy is also renowned for its design there and South Africa
is a pole player in the raw materials of this industry.

Indeed, South Africa's future has never looked brighter than it is today. It
is for this reason that South Africans generally describe this as the age of
hope.

Our hosting of the FIFA Soccer World Cup in 2010 is another show of
confidence by the rest of the world in the organisational capacity of South
Africa. More importantly, the event holds and will certainly open up limitless
business opportunities for South Africans and investment partners from all over
the world.

I hope that the Italian government will be as ready as we are to offer
assistance to Italian companies intending to do business in South Africa.

It is true that things are not all rosy about South Africa's socio-economic
situation. A sizable proportion of our population still lives in poverty, an
unenviable legacy inherited from the paralysis and ills of the apartheid
economy. The encouraging fact thought is that the South African government has
acknowledged the challenges, studied the situation and devised practical
programmes that hold great prospects for the poor and the marginalised.

Key among the challenges we have identified is the need to fast track
economic growth by addressing identified binding constraints. In this regard,
the government has among others adopted a targeted intervention known as
AsgiSA.

AsgiSA is specifically meant to deal with the need to revamp our
infrastructure and national logistics system, train South Africans to impart
skills needed in critical areas of our economy and create jobs in order to
ensure that our people have a better life.

We are under no illusions that we can achieve all these objectives on our
own. We have accepted the reality that much as we must mobilise domestic
investment, foreign direct investment remains a critical factor in our ability
to win the war against poverty, unemployment and underdevelopment. It is for
this reason that we are encouraged by the growing levels of investment by
Italian companies in our economy and look forward to even more investment.

International co-operation and conclusion

As you know, South Africa has and continues to play an important role in
peace building and conflict resolution and peacekeeping on the African
continent. We do this driven by our consciousness of the imperative to
contribute to the advancement of the African agenda.

We are convinced that our actions will lead to an African continent where
underdevelopment will be history, political stability and democratic governance
the order of the day and economic prosperity a reachable dream.

In this regard, we are encouraged by the good co-operation we have had with
Italy, bilaterally and in multilateral context such as the European Union (EU),
the G8 and the United Nations (UN). The emphasis placed by Italy on the
importance of enhancing the institutional capacity of the AU is an objective
that has seized the efforts of the South African government since the AU came
into being.

The fact that our two countries are currently non-permanent members of the
UN Security Council is not a mere ignorable historical coincidence. It is a
strategic opportunity for our countries to advance a shared vision not only in
African affairs, but also in critical political and economic challenges facing
humanity today.

Given the deepening relations between Italy and South Africa I have referred
to through out my speech, I have no doubt that ours is a relationship that will
not only defy the constraints imposed by distance and geographic space but one
that will serve as the best example of true friends who act together in good
and bad times. I wish you success in your deliberations.

Thank you very much!

Issued by: The Presidency
9 July 2007
Source: The Presidency (http://www.thepresidency.gov.za/)