Deputy President Mlambo-Ngcuka to visit Japan and Indonesia

Tshwane - South African Deputy President Phumzile Mlambo-Ngcuka, supported by Deputy Foreign Minister Aziz Pahad, will pay a working visit to Japan and Indonesia scheduled from Wednesday - Thursday, 19-20 April and Friday - Tuesday, 21-25 April 2006 respectively.

The visit by Deputy President Phumzile Mlambo-Ngcuka to Japan and Indonesia comes within the context of South Africa's priority to strengthen North-South and South-South relations for increased market access, trade and investment.

In this regard, the visit is also aimed at popularising South Africa's Accelerated and Shared Growth Initiative (AsgiSA) and Joint Initiative for Priority Skills Transfer (JIPSA) while investigating areas of co-operation and skills transfer between South Africa and Indonesia and Japan.

In addition, the visit to Indonesia comes a year after the historic Afro-Asia Conference that commemorated the Bandung Conference of 1955. At the 2005 Afro-Asia Conference, leaders of African and Asian countries committed themselves, through the New Africa-Asia Strategic Plan, to consolidating economic relations between both continents that adequately reflected the strong socio-political links between Asia and Africa.

Working Visit to Japan

Deputy President Phumzile Mlambo-Ngcuka will hold discussions with Prime Minister Koizumi during her visit to Japan. Deputy President Mlambo-Ngcuka is also scheduled to pay a courtesy call on Crown Prince Naruhito who is the eldest son of Emperor Akihito.

Discussions will focus primarily on how Japan can contribute to the successful implementation ASGISA and JIPSA.

The aim of the visit is also to consolidate and strengthen the existing cordial political relations between South Africa and Japan.

Deputy President Mlambo-Ngcuka will also hold discussions with the:

• President of the Japan International Co-operation Agency (JICA) Sadako Ogata with a view to popularising and seeking support for AsgiSA and JIPSA. Discussions are likely to focus on empowerment of South Africa's second economy, providing human resource development support to JIPSA and trilateral co-operation initiatives;
• Chairperson of the Japan External Trade Organisation (JETRO) Osamu Watanabe during which discussions are likely to include increased market access between Japan and South Africa;
• Governor of the Japan Bank for International Co-operation (JBIC) during which discussions will focus on the Enhanced Private Sector Assistance (EPSA) for Africa in partnership with the African Development Bank (AfDB);
• Vice-Chairperson of Toyota and South African Honorary Consul to Japan Mr Nakagawa during which discussions are expected to focus on private sector involvement with the recapitalisation programme of Further Education and Training institutions in South Africa;
• President of the House of Councillors Mrs Oogi who is also a member of the SA-Japan Parliamentary Friendship League. The League has played an important role in strengthening relations between the two countries. Discussions are expected to include the enhancement of Japan's relations with the Pan-African Parliament under the auspices of the Tokyo International Conference for African Development (TICAD);
• President of the Sanko Steamship Company and Kenji Kanda, President of the Kanda Shipbuilding Company;
• Business executives from Keidanren (Japanese Chamber of Commerce)

Deputy President Mlambo-Ngcuka will depart from Japan on Friday, 21 April 2006 ahead of her working visit to Indonesia.

Working Visit to Indonesia

Deputy President Phumzile Mlambo-Ngcuka is expected to hold bilateral political and economic discussions with her Indonesian counterpart Vice President Jusuf Kalla in Jakarta, Indonesia on Monday, 24 April 2006.

Issues on the agenda are expected to include, among others:

• The status of bilateral political and economic relations between both countries;
• Co-operation between SADC and ASEAN;
• Reflection on the New Africa-Asia Strategic Plan - developments since April 2005 and the way forward in the consolidation of economic relations between Africa and Asia;
• Developments in Africa including the consolidation of institutions of the African Union and Asgi-SA and JIPSA;
• Suggested areas of co-operation between both countries including mining, energy, telecommunications, infrastructure, SMMEs and tourism;
• Global governance including World Trade Organisation discussions and the comprehensive reform of the United Nations; and
• Other issues of mutual interest including the situation in the Middle East.

While in Indonesia, Deputy President Phumzile Mlambo-Ngcuka is also expected to pay a courtesy call on Indonesian President Susilo Bambang Yudhoyono and Chairman of the Parliament Agung Laksono, present a lecture at the Indonesian Council of World Affairs and hold discussions with representatives of the Indonesian Chamber of Commerce and Industry.

Deputy President Mlambo-Ngcuka is also expected to visit Solo in Central Java and Makassar in South Sulawesi.

In Java Deputy President Mlambo-Ngcuka will meet with the Governor Mr Mardiyanto and the Mayor of Solo Joko Widodo, hold discussions with the Java business community, visit handicraft and batik centres and meet with SMEs that support the tourism and industry.

In South Sulawesi, Deputy President Mlambo-Ngcuka will meet with the Governor of South Sulawesi and Mayor of Makassar, hold discussions with political and religious leaders of South Sulawesi, visit the Centre for African-Asian studies at the University of Hasanuddin, visit handicraft centres and meet with SMEs that support the tourism and industry.

Deputy President Mlambo-Ngcuka is expected to return to South Africa on Wednesday, 26 April 2006

Background

Bilateral Economic Relations Between South Africa and Japan

Japan's economic policy toward African development taken in its entirety is directed within the Tokyo International Conference on African Development (TICAD) process which was first held in 1993. TICAD has led to the implementation of projects aimed at increasing African human resource capacity, infrastructure development and investment.

In the context of the Gleneagles G8 Summit held in July 2005, Prime Minister Koizumi committed Japan to holding TICAD IV in 2008 in an effort at making TICAD the cornerstone of Africa-Japan relations. Japan has long advocated the importance of ownership of the development process by Africa in partnership with the international community.

At the Africa-Asia Summit in April 2005 Japan pledged to double their ODA to Africa in the next three years. Such ODA will amount to 0.7% of Japan's GDP. Japan is of the opinion that, based on the Asian experiences, the key to African economic development is to foster the private sector through the promotion of trade and investment. In line with this, Japan hosted the TICAD Asia-Africa Trade and Investment Conference in November 2004.

For Japan, South Africa is a strategic partner in the furthering of their Africa strategy. Japan views their support to South Africa as a gateway to the rest of Africa and as a result both countries are exploring tripartite co-operation on specific projects as the new frontier for co-operation between South Africa and Japan.

Trade and Investment

In 2005, Japan was South Africa's third most important trade partner internationally, and for several years has been South Africa's most important trade partner in Asia. Japan is a large investor in South Africa despite the fact that the investment accounts for 0.3% of Japan's outward Foreign Direct Investment (FDI).

Japan considers South Africa a very important trading partner for two reasons; of the total sub-Saharan region's GDP South Africa's economy accounts for 40%, and South Africa is rich in natural resources, specifically gold, diamonds, platinum and white gold. Japan sees South Africa as the gateway to Africa and as such, opportunities in trade and investment are considerably expanded.

South Africa is a reliable source of raw materials and is seen as a market for manufactured goods.

South Africa's main exports to Japan in 2005 were as follows: Platinum (35.4%), motor vehicle (23%), wood chips (10%), Aluminium (8%), Ferro Alloys (10s%), Manganese (4%) and Citrus (1.1%). South African imports from Japan consist mainly of machines, mechanical appliances, vehicles and measuring and photographic equipment. South Africa exported vehicles worth more than R 7billion to Japan in 2005.

It is estimated that almost all the minerals and more than half of South Africa's total exports are imported by no more that twenty Japanese companies, all of which have offices in South Africa, including JETRO and JICA. There are approximately sixty-three (63) Japanese companies operating in South Africa.

Direct investment in South Africa by Japan

• Fiscal 2002: 5 cases, 12,9 billion yen. (R675 million)
• From Fiscal 1993 to fiscal 2002, total: 39 cases, 95 billion yen. (R 4.97 billion).
• which include among others:
  Nissan Diesel Motors Co. (Auto)
  Mitsubishi Chemicals (Chemicals)
  Itochu Corporation (Metals - Ferro manganese)
  Sumitomo Corporation (Metals)
  Marubeni (ICT)
  Toyota Motor Corporation (Auto)

The investment has contributed in a marked degree to the creation of jobs as well as having other down-stream results. The transfer of technology, which has also accompanied Japanese investment, is of long term importance to South Africa. There is a concerted effort being made to develop and co-operate in the food and textile industry.

Trade Statistics (2002-2005)

Bilateral Economic Relations between South Africa and Indonesia

Bilateral trade statistics (Rand'000 - source DTI)

Trade between South Africa and Indonesia has expanded fast (more than 300% since 1993) with the trade balance in favour of Indonesia. South Africa's main exports to Indonesia include pulp and waste paper, cotton, flat and rolled steel and iron ingots, while its main imports are vegetable oil, natural rubber, textiles, timber, paper, plastics, footwear, stone and plaster.

Investment

Indonesian investment in South Africa

There has been very little Indonesian investment in South Africa to date. The reason for this is that Indonesia is still very much a developing country, which has not yet reached the stage of active outward investment. However, in 1997 an Indonesian company purchased Ostrich farms to the value of R300 million.

South African investments in Indonesia

There is increasing investment by South African companies in the vast mineral reserves of Indonesia, that include nickel, copper, silver, gold. Gencor (Ingwe) is active, with Iscor, Anglo-American, and Plessey also showing interest. Murray & Roberts has an office in Jakarta and is hoping to obtain civil construction contracts in the infrastructure sector. In addition, Thebe Investment has signed an agreement with Indonesian-owned trading company PT. Prima Comexindo.

One of the biggest SA IT companies, M-Web, has a huge investment portfolio of USD16 billion in Indonesia.

Issued by Ronnie Mamoepa on 082 990 4853

Department of Foreign Affairs
Private Bag X152
Tshwane
0001

17 April 2006