Minister Dlamini Zuma to Host Swiss Counterpart, Micheline Calmy-Rey, Pretoria, South Africa, 19 - 21 February 2004

Minister of Foreign Affairs, Dr Nkosazana Dlamini Zuma will host her Swiss counterpart, Micheline Calmy-Rey for bilateral political and economic discussions in Pretoria, South Africa from Thursday, 19th to Saturday, 21st February 2004.

The visit is aimed at:

• Strengthening the political relationship between South Africa and Switzerland;
• Consolidating economic relations and especially increased direct investment;
• Consolidating South African - Swiss trilateral co-operation in Africa utilising such frameworks as the Joint Declaration of Intent, signed during the official visit of President Mbeki to Switzerland on 10 June 2003;
• Promoting development co-operation between Switzerland and Southern Africa;
• Obtaining formal Swiss support for NEPAD; and
• To enrol Switzerland as an important international partner and co-ordinate multilateral co-operation on issues of mutual interest.

Present day relations between South Africa and Switzerland are sound and cordial. Following major achievements in the establishment of democracy, Switzerland granted South Africa special status on the Swiss foreign policy agenda as one of the most important areas for Swiss interests outside Europe.

In recent years, relations have been consolidated by various high-level visits, and annual Working Group meetings between both Departments of Foreign Affairs that have proved useful in strengthening bilateral relations and trilateral co-operation in technical areas such as de-mining, conflict management, human security and development co-operation in the rest of Africa.

The relationship between both countries was further consolidated with the official visit of President Mbeki to Switzerland on 10 June 2003 during which a Declaration of Intent providing a framework for trilateral co-operation in Africa in such areas as governance, humanitarian assistance, economic empowerment, de-mining, conflict prevention and private enterprise development was signed.

Several other examples also exist where Switzerland and South Africa effectively co-operated in a new partnership, including small weapons control and mine clearing; Swiss financial and personnel contributions to the early warning system on conflicts developed by the ISS; cooperation with the Truth and Reconciliation Commission; Swiss-SA co-operation in the Arusha conference for Burundi, partnerships between universities, the promotion of culture by Pro Helvetia in Cape Town and general development co-operation since 1994.

Due to Switzerland's unique international position and roles in promoting peace, dialogue to ensure stability, and a focus on humanitarian issues, it is actively involved in pursuing these issues on the African continent.

The promotion of peace, humanitarian initiatives and conflict resolution is an integral part of Swiss foreign policy in general and with regard to Africa in particular.

Economic Relations

Switzerland remains a very important foreign direct investor in terms of new investment in South Africa with foreign direct investment (FDI) in South Africa since 1994 amounting to R2,7 billion by the end of 2001.

In terms of total investment, Switzerland ranked as sixth largest foreign direct investor in South Africa in 2002. South Africa ranked as twelfth largest foreign investor in Switzerland in 1999, the 3rd largest after Japan outside the EU and US.

A large number of Swiss companies have considerable operations in South Africa, with many also utilising South Africa as their base for doing business with the rest of Africa, and especially Southern Africa. South African subsidiaries and branches of Swiss companies employ around 22 000 people throughout the country and represent well-known concerns such as Nestle, Novartis, Sulzer, Hoffmann La Roche, UBS, Credit Suisse, Winterthur International and Schindler. In total, between 250 and 300 Swiss companies are represented in South Africa.

Switzerland is one of South Africa's main trading partners with an annual trade turnover of around R7,2 billion in 2002 (up from R5,8 billion in 2001). Bilaterally, South Africa is an equally important trading partner for Switzerland, reportedly the most important trading partner on the African continent.

Exports from South Africa to Switzerland amounted to some R2,5 billion in 2002 (up from R1,7 billion), and imports to over R4,7 billion (up from R4 billion).

South African imports from Switzerland (January to December 2002)

Machinery and mechanical appliances, electrical equipment etc R2,172m
Products of chemical or allied industries R1,411m
Optical, photographic, surgical instruments, etc. R 474m

South African exports to Switzerland (January to December 2002)

Nat/cultured pearls, pre + semi-precious stones and metals R 1,395m
Base metals and articles thereof R 413m
Prepared foodstuffs, beverages, tobacco etc R 207m

European Free Trade Area (EFTA)/ SA Customs Union (SACU)

In May 2003, negotiations commenced between South Africa, Switzerland, Norway, Iceland and Liechtenstein on a free-trade agreement between South Africa and the European Free Trade Area (EFTA). The trade deal is designed to allow South African companies easier access to EFTA markets through reduced tariffs on goods and services imported from South Africa.

Swiss Business Hub in SA

Swiss President Couchepin indicated during President Mbeki's visit that Switzerland is considering the creation of a "business hub" in South Africa as a springboard for covering the Southern African region. A "hub" is a professional organisation established solely for the promotion of Swiss business interests. The hub would be part of a global Swiss network to promote foreign trade. Currently, 14 Swiss business hubs are operational worldwide.

The concept for South Africa provides for a platform that would include a number of economic instruments that Switzerland is already applying in South Africa, eg investment and import / export promotion.

Host institution and location of the hub are elements still to be determined. The Swiss Parliament is currently reviewing the concept of trade promotion internationally and the resources allocated to it.

Swiss Development Cooperation

Swiss development assistance to South Africa is estimated at approximately Sfr12 million (approximately R80 million) in 2003 (same as 2002).

Before 1994, the Swiss Development Co-operation (SDC) supported non-governmental organisations in South Africa committed to fostering a democratic society based on equality. To express its support for the crucial transition process under way in South Africa, the Swiss Government decided in 1994 to substantially increase its development cooperation assistance with a "Special Programme for South Africa" which was scheduled to run from 1994 to 1999.

The Special Programme focused on land reform, education and democracy/human rights. In the area of land reform, support was given to those NGO's that worked with victims of Apartheid. Between 1994 and 1999, a total of Sfr80 million was put into the Special Programme (approximately Sfr60 million from the SDC and Sfr20 million from the Swiss Department of Foreign Affairs' Political Department III/Peace Promotion. The State Secretariat for Economic Affairs (Seco) contributed an additional Sfr10 million to promote the black private sector through partners such as Msele Nedventures, Horizon Equity for the training of black professionals, and Lugisa for technical assistance.

In August 1998, Switzerland decided to extend the Special Programme for South Africa until 2004. The main purpose of the second phase of the programme was to accelerate development by promoting social justice, reducing inequality, diminishing internal conflicts and strengthening democracy. Another objective was to promote interaction among SADC countries by fostering regional projects. The SDC budgeted about Sfr35 million for the Special Programme 2000-2004.

Further to the above programme, the Swiss State Secretariat for Economic Affairs is encouraging the development of small- and medium-size enterprises and has since November 2002 also engaged in the creation and funding of a Trade Law Centre for Southern Africa set up in the Faculties of Law at the Universities of Stellenbosch and Namibia. A total amount of Sfr10 million has been set aside for the next three years for this purpose.

In May 2003, the Swiss SDC indicated their commitment to finance projects under the Mutual Learning Agreement between the cities of Tshwane and Basel. These projects are mainly concerned with the development of community centres in previously disadvantaged communities and takes place against the background of Local Agenda 21.

In 2000, the Swiss Federal Department of Foreign Affairs (EDA) and the African Centre for the Constructive Resolution of Disputes (ACCORD) signed a Trust Fund Agreement on "Towards an African Renaissance: Constitutionalism in Africa - the establishment of an Expert Advisory Steering Committee on Constitutional challenges and conflict resolution in Africa". The project ran from 2000 until 2002 and received EDA financial support for the execution of the project to the tune of US$ 815,762.

Establishment of a Joint Swiss Development Trust.

The Trust was launched on 15 January 2001. Ten large Swiss companies have contributed Sfr5 million to the Foundation and the SDC has matched the funds with an additional Sfr5 million. The contributions by the SDC will be made till the end of 2005. The proceeds from the Fund have been used for primary school development and capacity building projects involving young unemployed people.

The SDC's 1995-2004 program comprises the following sectors: governance

(training justice personnel, training government personnel in recently decentralized entities of the state administration), education/training (training teachers and school administrators, curriculum development), land issues (policy development, advice to land claimants). About CHF 8 million/year have been earmarked for this program.

The special Program for South Africa will as from 2005 be regionalised and transformed into a SADC Program: The future regional program will include South Africa and should support the ongoing integration of the SADC region. Most likely sectors will be natural resources management, governance, HIV/AIDS.

The Swiss Foreign Ministry Section for Peace Policy and Human Security aims to strengthen Africa's capacity to find African solutions to crises and conflicts. Accordingly, Switzerland focuses on conflict analysis, policy development and capacity building to combat small arms proliferation, as well as training in constitutionalism, labour-dispute settlement, training for parliamentarians in Southern Africa.

Switzerland finances an early warning program (Africa Security Analysis Program) at the Institute for Security Studies (ISS). In addition, Switzerland financed a program in constitutionalism at ACCORD, the African Center for the Constructive Resolution of Disputes. ACCORD has set up and manages a pool of international/African specialists in constitutional law, which includes Prof. Nicolas Haysom, from South Africa. The program is tailored for dealing with constitutional reforms by providing e.g. experts in constitutionalism, conducting research activities and organizing seminars on specific constitutional questions. ACCORD has programs running in Sudan, Lesotho, Mozambique, Burundi and Tanzania. The ACCORD program's capacities have not yet been fully exhausted. South Africa may be interested in making more systematic use of the program.

A joint Swiss/ILO project to promote dialogue between social partners (government, trade unions and employers' organisations) aims to create institutions for the peaceful settlement of labour disputes. It is headed by Charles Nupen from South Africa. The program was started and successfully completed in South Africa and was quickly expanded in the region to include Namibia, Lesotho, Botswana, Swaziland and Zimbabwe. It started in Mozambique and Angola in 2003.

Issued by Ronnie Mamoepa on 082 990 4853.

Department of Foreign Affairs
Private Bag X152
Pretoria
0001

17 February 2004