Deputy President Zuma to Participate in Kuala Lumpur World Peace Conference, Kuala Lumpur, Malaysia Saturday, 9th - Sunday, 10th August 2003

On the invitation of the Malaysian World Peace Federation, Deputy President Jacob Zuma will travel to Malaysia to participate in the Kuala Lumpur World Peace Conference from Saturday - Sunday, 9-10th August 2003.

Deputy President Zuma will participate in a Statesmen Roundtable entitled, "Reaping the peace dividend: discuss, disarm and distribute," on Saturday, 9th August 2003.

Other participants in this session are Malaysia's Minister of Defence, Mohd Najib Tun Razak; Thierry Rommel, European Union Ambassador to Malaysia; Professor Dr Hassan Muratovic, former Prime Minister of Bosnia and Herzegovina; Adolf Ogi, Special Advisor to the United Nations Secretary General on Sports for Development and Peace; Vaclav Havel, Former President of the Czech Republic; Kay Rala Jose Alexandre Xanana Gusmao, President of the Republic of Timor-Leste; Robin Cook, Leader of the House of Commons and former Foreign Secretary of the United Kingdom; Chris Patten, EU External Relations Commissioner; Javier Solana, Secretary-General of the Council of the European Union; and Ryutaro Hashimoto, former Prime Minister of Japan.

The Conference, to be attended by representatives of Governments, civil society and non-governmental organisations, will discuss among others:
· War Against Terrorism: Changing policies and mindsets in winning the peace;
· The Future is in our hands: a call to action for peace;
· Inter-Faith Dialogue: in search of common values; and
· The Quest for Peace: the way forward.

Delegates are expected to wind their deliberations with the adoption of the Kuala Lumpur World Peace Declaration.

For further information contact:
· Ronnie Mamoepa on 082 990 4853
Issued by the Department of Foreign Affairs
Private Bag X152
Pretoria
0001
5 August 2003

BACKGROUND

Bilateral Relations

Malaysia was one of apartheid South Africa's most vocal critics in Asia, and traditionally maintained close ties with the African National Congress (ANC).

Malaysia lifted people-to-people sanctions against South Africa (in accordance with the Harare Declaration at the Commonwealth Heads of State Meeting in Zimbabwe) at the end of 1991.

In 1992, Malaysia indicated that she wished to establish a Liaison Office in South Africa in order to facilitate direct contact with the South African Government. This Office would form part of the Malaysian Airline System (MAS) office in Johannesburg.

As the Commonwealth Heads of Government Meeting in Harare in 1991 had ruled out the official establishment of relations with South Africa, the Liaison Office would function until such a time as an interim Government was in place in South Africa. The Liaison Office was established towards the end of 1992.

In a statement by the then Foreign Minister, Datuk Abdullah Badawi, Malaysia lifted all remaining diplomatic, trade and economic sanctions against South Africa with effect from 25 September 1993.
Full diplomatic relations were established on 8 November 1993. The South African Embassy in Kuala Lumpur was opened on 17 January 1994, and subsequent to South Africa's re-admittance to the Commonwealth, the Embassy was renamed the South African High Commission. Ms M Mohale was appointed as South Africa's first High Commissioner to Malaysia, and she presented her credentials to the King of Malaysia on 25 July 1995.

In March 1994, Malaysia awarded the Tun Abdul Razak International Award to President Nelson Mandela. Mr Mandela received this award for his efforts in the forefront of the struggle to dismantle apartheid. The last time this award was conferred was in 1989. President Mandela's daughter, Ms Zinzi Mandela, accepted the award on behalf of the President at a ceremony in Kuala Lumpur on 10 August 1994. Similarly, Dr Mahathir received the Order of the Cape of Good Hope from President Mandela in Cape Town, South Africa on 7 May 1997.

In April 1994, the Malaysian Prime Minister, Dr Mahathir, was one of the first foreign statesmen to pay a private one-day visit to South Africa to congratulate President Mandela. The Malaysian Minister of Foreign Affairs, Datuk Abdullah, attended the inauguration of President Mandela on 10 May 1994 and held a short private discussion with President Mandela.

Political relations post-1994

Since 1994 a rapid improvement of relations occurred in all spheres, but most notably on the political and economic levels. The personal friendship between former President Mandela and Prime Minister Mahathir, Malaysia's total anti-apartheid stance over four decades and a common realisation of the importance of South-South co-operation, provided the impetus for a warm, friendly and solid relationship.

The close political relations between the two countries was illustrated by the visit in August 1995 by the Malaysian Prime Minister to South Africa. President Mandela reciprocated with a State visit to Malaysia in March 1997. These good relations were further strengthened during the visit of Deputy President Thabo Mbeki to Malaysia during the Commonwealth Games in September 1998.

Deputy President Jacob Zuma attended the Fourth and Fifth Langkawi International Dialogue (LID) in Malaysia in August 1999 and November 2002 respectively, to participate in the Malaysian initiated LID Smart Partnership concept and this has taken a Southern African-leg with the establishment of a Southern African International Dialogue.

Active High Level Visits

Ministers, parliamentarians and other high standing dignitaries from both countries have exchanged visits. Delegations from the Provinces of Gauteng, the Northern Province, Northwest and the Northern Cape, led by their Premiers, have already visited Malaysia. Numerous delegations from all the South African provinces have also visited Malaysia. Numerous visits from Malaysia to South Africa also marked the period since the onset of the Government of national Unity, and nearly half of the Malaysian Cabinet has also been to South Africa.

Expanded Representation: Penang and Sarawak

The South African Government appointed Honourary Consuls in the States of Penang and Sarawak (in June 1999) in an effort to further establish a presence outside the commercial heartland of Selangor (within which the capital of Kuala Lumpur is located).

Dr Abraham Nkomo, South Africa's third High Commissioner to Malaysia, presented his credentials to the King of Malaysia on 22 March 2002.

Agreements

Apart for an agreement of the establishment of diplomatic relations, and an air services agreement, South Africa and Malaysia signed a Trade Agreement as well as a Shipping Agreement in 1997. A Double Taxation Treaty has been negotiated and requires signing. In addition, Malaysia has approached South Africa on the possibility of concluding an Agreement on the Promotion and Protection of Investments, as well as an Economic, Technical, Scientific and Cultural Co-operation Agreement.

A joint Ministerial Commission was proposed during a meeting that Minister Dlamini-Zuma had with her Malaysian counterpart in September 2001. A draft document of the JMC was presented to South Africa during the first quarter of 2002. MOUs on Co-operation in the field of Sport and Recreation and Public Service Training between South Africa and Malaysia are also in the pipeline.

Tourism
Tourism arrivals from both South Africa and Malaysia have steadily grown since 1994. Malaysia Airlines now (as from 1 May 2002) has three instead of the initial four flights per week to South Africa. SATOUR statistics have recorded a steady increase in number of tourists to South Africa since the Asian Financial Crisis. Malaysia is a popular destination for value-seeking South African tourists. On annual basis, the mission actively participates in the premier tourism shows like the Malaysian Travel and Tour Association (MATTA) consumer show in Kuala Lumpur and the industry-orientated Southern African Tourism Mart.

Education and Culture

Since 1994, Malaysia has assisted more than three hundred South Africans in their studies that range from short but focused courses to full scholarships for degrees like engineering and information technology. Currently, there are just over 100 students from South Africa on full scholarships provided by Malaysian companies.

A number of South African universities have signed MOU's with their Malaysian counterparts and co-operation is encouraged. The concept of South Africa as an affordable education destination for international Malaysian students is being promoted.

The presence of South Africa's 250 000 Malay community has been used and should continue to be utilised to build on the historical links as well as the trade links between the two countries. The people-to-people relations in all fields, but especially in education, culture, art and sport, have been strengthening steadily.

Technical Co-operation

An important aspect of the relations is scientific and technical co-operation and the transfer of technology. Malaysia regards South Africa as one of the most advanced developing country in terms of science and technology, and for this reason South African technology is often sought after.

Economic relations with South Africa

Bilateral Trade

The process of lifting trade sanctions began when the Malaysian International Shipping Corporation (MISC) was given authority to accept South African cargo from 1 July 1993.

The Asian financial crisis had a dramatic effect on South African exports to Malaysia, which decreased by R480 million from November 1997 to October 1998 (SA exports totalled R546 million between November 1997 to October 1998). In the same period South African imports from Malaysia rose by R495 (Imports from Malaysia totalled R1769 million). The trade balance in Malaysia's favour, for this period, amounted to R1223 million. Before this dramatic reversal, the trade balance between the two countries had only slightly been in Malaysia's favour. The SA imports from Malaysia amounted to R1274 million (Nov '96 to Oct '97) whilst SA exports amounted to R1026 million.

South Africa's commercial policy toward Malaysia is focusing on trade and investment promotion. DTI's focus-specific areas are agro-forestry, dimension stone/granite, film production, petrochemical downstream, shipping/boat building and telecommunication equipment.

Bilateral Trade Relations (ZA Rand'000) (Source: DTI)
YEAR SA Exports SA Imports Total Trade
1994 348,954 748,003 1,096,957
1995 661,682 892,332 1,554,014
1996 742,534 1,076,632 1,819,166
1997 1,150,030 1,305,092 2,455,122
1998 396,181 1,780,970 2,177,151
1999 749,993 1,781,826 2,531,819
2000 1,109,222 2,062,585 3,171,807
2001 1,524,001 2,448,658 3,972,659
2002 2 010 334 3 643 829 5 654 163

South African Business in Malaysia
The high-water mark of South African business enthusiasm in Malaysia was the official launching of the Malaysia South Africa Business Council (MSABC) by President Mandela and Prime Minister Dr Mahathir in Kuala Lumpur, in March 1997.

The financial crisis has caused a number of South African businesses located in Malaysia to either curtail their staff or shut down offices in Malaysia. The following South African companies closed offices in Malaysia: Grinaker Construction Ltd., BKS and Armscor. The major companies remaining in Malaysia are Murray & Roberts, Africon, Plestel (Malaysia) Sdn. Bhd. and Rhine Ruhr Process Equipment. By January 2000, Murray and Roberts withdraw their South African representatives from Malaysia while maintaining local representatives in Kuala Lumpur. In early 2001, Denel reopened its offices in Kuala Lumpur after closing them for a year. The reopening follows on a US$49 million sale of 22 units of the 155mm G-5 artillery gun for the Royal Malaysian Army. The franchise chain Nando's introduced and subsequently expanded its fast food operations in Malaysia.

There are pockets of opportunities in Malaysia in the oil and gas industry (downstream). South African company, Polifin (40:40:20 in a joint venture with Petronas and a Dutch company) entered a US40 million dollars plastics venture in Kerteh, on Malaysia's East Coast in 1998/99.

SAFreight has recently signed is an joint venture bid with Sabah Shipyard Sdn Bhd. to build a training patrol vessel for the Royal Malaysian Navy. The value of SAFrieght take on this deal is US$ 60 million for the hull of the vessel to be built in Durban.

Malaysian Investments in South Africa

Malaysians, investing in mainly petrochemicals, telecommunications, hospitality and property markets were the second largest new investments in South Africa by 1996. It was estimated that the increase to 97,1 per cent of Petronas shares in Engen had a total value of R4 billion (US714 million dollars). Petronas divested 20 per cent ownership in Engen to Worldwide Africa Investment Holdings in support of the South African government's empowerment strategy in November 1999.

The other major Malaysian investment is the Telekom Malaysia/SBC Communication Inc., 30 per cent stake in Telkom South Africa, which was worth US1, 260 million dollars. One of the biggest private investments in South Africa by a Malaysian company is the Samrand development, a 700 ha property development project between Johannesburg and Pretoria.

The Asian financial crisis has caused a number of Malaysian companies to withdraw from their overseas commitments and consolidate at home. Besides the Petronas investment in Engen, Businessmap indicated that Malaysian interests in South Africa were marked by net disinvestment in 1998. Businessmap indicates that during 1997 and 1998, besides the Petronas and Telekom Malaysia investments, not much original currency was brought into South Africa.

There still evidence of Malaysia's involvement in Southern Africa and further afield within the continent. But there has been a significantly reduced presence of Malaysian economic activity on the continent. The latest investment was the relocation of a R30 million condom factory from Zimbabwe to Mpumalanga.

South Africa is seen an important potential ally for the Malaysian Government and business and still a springboard for Malaysia's economic and political efforts in the rest of Africa as well as South America. The challenge that has been identified is to maintain Malaysia's support and commitment NEPAD in a world that is increasingly focusing on other growth areas.