Deputy Minister Sue van der Merwe Addresses an Australian Trade and Investment Seminar
Melbourne, Australia: Deputy Minister Sue van der Merwe, supported by South Africa’s High Commissioner to Australia, Mr. Lenin Shope, participated in the 3rd Annual Trade and Investment Seminar held in Melbourne. The seminar, attended by officials of the Department of Trade and Industry (SA), Mpumalanga Economic Growth Agency (MEGA) and South African Airways provided a good forum for interaction with Australian businessmen and women on issues of trade and development between South Africa and Australia.
In her speech, the Deputy Minister said South Africa has built a rights based constitutional democracy, progressive in its protection of human rights, and committed to the dynamic pursuit of equal opportunity and the redressing of inequities of the past. She said our country is commitment to building a developmental economy that is able to serve the needs of the people of our country and be the engine of economic development for our region and the continent beyond. She highlighted that South Africa has a modern economy operating within a well-regulated fiscal and financial framework supported by sophisticated financial institutions and developed infrastructure.
The Deputy Minister emphasised that South Africa has established partnerships throughout the world; reduced government’s direct role in the economy; promoted private sector investment and competition; significantly reduced tariffs and export subsidies; loosened exchange controls; cut the secondary tax on corporate dividends; and improved enforcement of intellectual property laws.
Representing the Australian Government, Mr. Brian Tee, Parliamentary Secretary for Public Transport in Victoria said Australia and South Africa have a shared heritage, be it in cricket, rugby and a Commonwealth history. He called on both countries to use this common heritage to establish our trade and investment relations, at a time when South Africa is Australia’s largest trading partner in Africa – with bilateral trade valued at A$3bn. The other areas where the State of Victoria is strong at includes ICT, biotechnology and food processing. Coincidentally, on this day, he said a
Johannesburg-Melbourne Virgin Australia flight was being inaugurated – a clear indication that there is a growing business interest from both countries.
The Deputy Minister said South Africa experienced its first recession in 17 years, but strong institutional regulation ensured that we did not see the same shocking financial institutional collapse that precipitated the crisis. Despite this and through the strength of our public finances, she said we managed to invest heavily in critical infrastructure, as a key driver of economic recovery and the strengthening our social security support system. Through effective and conservative management of our fiscus over the past decade, she said South Africa managed to have a low level of public debt, enabling us in the process to sustain public spending and invest in our future prosperity.
Although we are now officially out of recession, the Deputy Minister informed the seminar that, as a country, we still have an unacceptable wealth gap, unemployment plagues our communities and our economy still need to be further diversified. She indicated that although South Africa is still committed to a market oriented economy, the current economic reality has served to reinforce our country’s belief that we cannot rely on markets alone, and that economic growth and prosperity must be supported by an appropriate policy environment. In this regard, she spoke about the need for microeconomic policies that support expansion in targeted areas; the need to develop our downstream industry and develop further partnerships.
The Deputy Minister informed the audience that South Africa has recently launched its second phase of a three year Industrial Policy Action Plan. Such a policy, the Deputy Minister said, will lead South Africa to focus beyond its traditional strengths in commodities and non-tradable services, to expand production in value-added sectors with high employment and growth multipliers. Further that our Industrial Policy Action Plan rests on a number of cornerstones to address these and other constraints that inhibit our efforts to build a more sustainable economic growth and development path. Through our Development Finance Institutions in South Africa, the Deputy Minister said our country will provide increased funding to expand and diversify the country’s industrial base, prioritizing heavy investments strategic sectors such as transport and electricity generation.
The Deputy Minister called on Australian companies and investors to expand their involvement in South African industries such as metals fabrication, capital and transport equipment, green and energy saving industries and agro-processing. She indicated that further government support will also be enhanced in traditionally successful areas such as automotives and components, medium and heavy vehicles; plastics, pharmaceuticals and chemicals; bio-fuels; forestry, paper, pulp and furniture and Business Process Outsourcing.
In her speech, the Deputy Minister said South Africa is one of the most sophisticated and promising emerging markets in the world, with a unique combination of a well developed business services support and a dynamic investment environment with many global competitive advantages and opportunities. She said our country is the new economic frontier that offers a gateway into the vast untapped markets of the African continent. Furthermore that we have the largest and most sophisticated economy, i.e. our GDP is 25% of that of the entire continent. In this regard, she said South Africa recognizes that it has an obligation to play a leading role in the development of our SADC region and continent.
With South Africa having a reliable telecommunication, rail, ports, road infrastructure, these could be used to distribute goods and services throughout Southern Africa. In the context of SADC, the Deputy Minister informed the audience that this economic regional community of 14 countries has a registered market of 170 mil people worth US$ 360 bn. When Angola and the DRC eventually join, SADC will have 77 mil people more and an additional market ofUS$ 71 bn.
In conclusion, the Deputy Minister extended an invitation for Australians to visit South Africa during the FIFA World Cup, saying the event has provided a significant impetus to our country’s infrastructure development. More than that, she said the soccer festival will also showcase South Africa to the world and highlight our incredible natural beauty and modern infrastructure.
NB: The Deputy Minister leaves for Sydney this evening, where she will support the Mission’s 2010 World Cup Promotional programme and on Friday will speak at a seminar at the Sydney University.
For more information contact the Chief Director for Public Diplomacy, Mr. Saul Kgomotso Molobi on 082 940 1647 or email him at molobisk@dirco.gov.za
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