Notes following Briefing by Deputy Director-General Ambassador Jerry Matjila re: IBSA, Media Centre, Union Buildings, Pretoria, Sunday 14 October 2007

Ambassador Jerry Matjila

Good morning and thank you for coming to this briefing.  I thought that this morning I would deal with the substance issues around the IBSA and to brief you on what will happen during this process.

First of all, I prepared a slide presentation of which you will receive copies.

I thought I would take you through IBSA and where we are in the process.  What is important is the geo-strategic position between India and Brazil and that is where we see a major advantage for South Africa – that we are at the centre of the three countries.

Regarding India, we speak of a country with 1.1 billion people.  According to the World Bank India has a GDP of US$806 billion.  This is very significant.  India is a global player in terms of ICT and other global products.

Regarding Brazil, the World Bank says the GDP of Brazil is US$ 882 billion.  This is the 2005 statistics.  Brazil has a population of 186 million people.  It is very developed in terms of services and the automotive and agriculture sectors.  And then it has the second largest black population after Nigeria.  This is very significant.

Our own economy: US$242 billion in GDP, 47 million people according to 2005 statistics.  We are a mining economy.

So these three countries have over 1.3 billion people.  So this is very significant as a combined market.  And almost US$2 trillion if you put the three together.  This is very substantial.  The statistics illustrate these are very significant countries in their three sub-regions and are major players in their sub-regions.

In terms of trade between South Africa and Brazil, 2002 statistics illustrate a slight improvement.  We still have to a lot of work to enter the Brazilian market.  It is very apparent that we have to work very hard.  We therefore require reliable connectivity in terms of shipping and air links.

With India, our two way trade has crossed the US$ 2 billion mark.  Once more, it does show that there is a huge potential in the Indian market and I think both countries are working very hard to ensure value added trading relations.

The two way trade between the IBSA countries, between South Africa, Brazil and India combined amounts to approximately US$ 30 billion in 2006.  So we are very optimistic that this forthcoming IBSA Summit will highlight the opportunities available in each market.

The background of IBSA: it was conceptualised between 1999 and 2000 when President Mbeki wrote letters to the Heads of State of India, Brazil, China, Mexico, Nigeria, Egypt and Saudi Arabia and proposed the formation of the Group of 8 of the South.  This is the origin of this project.  President Mbeki then followed this up with telephone calls and more and more discussions ensued.  In the end, it was agreed that we should begin with India and Brazil in 2003.

What is common about these three countries is their very vibrant democracies, common views on major global issues and we are substantial players in our respective sub-regional economies. 

The project has developed into something that many developing countries have begun to envy.  The Heads of State meet twice a year, the Foreign Ministers meet quite often, there is a lot of activity that has been going on.  My colleagues and I have had 10 meetings as the IBSA Focal point.  We have exchanged ideas with our colleagues regarding views on the common benefit for each of our countries.  We have noted that this grouping gives a lot of substance to South-South dialogue and co-operation.  It gives us a critical mass with which to engage in global debate and dialogue.  This is very significant because you cannot ignore the voices of these three countries put together when you discuss global issues.

And, when you say this it is very important because there is a lot of synergy between the three countries.  Above all, this grouping addresses a combined population of 1.3 billion people with the economies totally US$ 3 trillion.  So we can create and establish mechanisms to ensure that indeed, there is a benefit for these economies.

We can create a maritime highway from India to South Africa as a hub, back to Brazil.  We can also create an aviation hub from South Africa to India.  This maritime highway is an issue we are vigorously pursuing given the huge trade that flows around our shore.  80% of the world’s trade flows around our shores and the Indian subcontinent has a huge trade, as does Brazil and Latin America.  We really want to re-position South Africa to be centrepiece of this new aviation and maritime highways.  There is so much people to people engagement in the IBSA project, more especially the three countries, in terms of human resource development and technology transfer we can complement each other.  Above all, we want to explore the opportunity of employment and job creation for our people.

The other engagement we have and are going to have is with the G-8 and G-8 processes on global issues.  Both countries are adamant there is a need for reform of the United Nations.  We are linking our efforts and working very hard to ensure the next round of Doha Trade Talks do succeed.  And there will be an exchange of ideas during this meeting on the issues of the MDGs and how we can work together to ensure the Doha Round is a success.

I talked about the major sectoral activities we are planning to engage on.  Almost four major government departments of the three countries, not less than 17 ministries in the three countries are talking to each other.  This is unprecedented in the present global political situation. 

We have established many working groups meeting from Monday.  We have also established many sectoral working groups.  We are going to be launching two working groups in South Africa, viz. one on climate change and one on human and urban settlement.  We are preparing to launch one on local government, water affairs, business, public works and home affairs, so we will launch five more working groups in India.  At the end of 2008, it will be possible that 26 government departments and ministries will be talking to each other on broad issues.

We are also looking increasingly closely at the issue of the IBSA Fund and the impact of it.  I think that in 2007 the Heads of State and Government will agree we should have a project in Burundi and HIV and Aids.  This is very important.  Burundi has just recovered from war.

I think we will also be having a programme in East Timor on capacity building.

We think that the US convened Conference on the Middle East in November will bring some movement to the Palestinian situation.  We hope to launch a capacity building project to help the Palestinian government carry out its functions and responsibilities.

We have just had a meeting in Delhi with the Ministers.  The Ministers are the executives of IBSA.  The Ministers of Foreign Affairs of India, Brazil and South Africa are the ones that ensure that major decisions are taken and conveyed to the Heads of State and Government.

We will for the first time see a meeting of the Parliamentary Forum.  This is a new development and parliamentarians from India and Brazil are beginning to arrive in South Africa from today.  They are going to have their own session on Tuesday 16 October 2007.  They are going to exchange issues and discuss how their respective parliaments can assist the IBSA processes.

In an hour’s time, the Woman’s Dialogue is beginning.  We have about 100 women in Sandton from Brazil and India.  They will meet to discuss the gender inclusive macro-economic framework.  This is very significant given that both of us are developing countries where so much work is being done by the women.  They will be discussing capacity building, skills development, a gender labour management programme, co-operatives and macro-economics.  It will be two-day meeting.  This report will then be presented to the Heads of State and Government on the 17 th October.

The same thing will be done with the Parliamentarians.  For the first time the outcomes of their report will be presented to the Heads of State and Government.

We have a journalist forum because we believe we need this forum for the journalists.  They met in Delhi a month ago.  We have established an IBSA editors forum so we continuously exchange ideas on this.  However, we thought we should exchange journalists.  As you are aware, we are hosting journalists from India and Brazil for a week.  They have been visiting South Africa because we thought we should expose our journalists to each other.  The same thing will happen when we go to India next year.  South African and Brazilian journalists will visit India and the same with Brazil.

The other important forum that has begun work today is the civil society forum.  We believe it is very important to include civil society in processes and to not leave them behind.  We felt they should exchange ideas of various issues including development, poverty alleviation, etc.

The academics will also meet in Sandton from Monday to Tuesday.  We have Brazilian and Indian academics who have already arrived.  Some are arriving this morning.  They will talk about major global economic and social imperatives of the three countries and the world.

We will also look very closely at the challenges of connectivity and to engage on economic growth and development to ensure greater research.  We thought our universities and researchers must meet to begin to imbue our own people with credible information.

We will also have a business forum.  We have close to 100 South African businesspeople, 60 from India and 20-30 from Brazil participating in this Forum.  So we will have the businesspeople meeting tomorrow.

We really thought we should make a major backstop with the Business Summit where we will have to talk a lot about energy and climate change.  Regarding energy, we are trying to move towards companies with a focus on biofuels and clean energy in order to address these high costs of energy in the three countries.  We have to move into the alternative fuels market.

South Africa is the leader in the mining industry amongst the three countries.  We have to move towards beneficiation.  On Monday the energy sector will engage in a research workshop.  Sasol and PetroSA is taking the lead on this matter in the energy sector.  We have an advantage in the area of technology and coal to liquid and gas to liquid fuels.  Both India and Brazil are looking towards this.  About 40% of Brazilian fuel comes from biofuels.  So there will be a dedicated two day seminar on this matter specifically.

Another specific matter we will deal with is a workshop on maritime and aviation issues in order to investigate this matter of implementing aviation and maritime super-highways between South Africa, India and Brazil.  We have decided to have our operators and officials in this meeting in order to remove whatever obstacles might be there.  As I said earlier on, we are very close to sign a shipping co-operation agreement between the three countries.

ICT is a very important sector so there will be a workshop on this matter.

These are some of the meetings that will be held in the Sandton Convention Centre.

On Wednesday 17 October 2007 we will have the Ministers of India and Brazil together with Minister Dlamini Zuma meeting at the Union Building to evaluate where matters stand.

At 10h00 that morning the Summit will take place at the Presidential Guesthouse.  For this Summit we hope that a number of trilateral agreements – shipping, ICT, energy.  In Brasilia we signed the agreement on aviation co-operation.  That is why we have this dedicated focus on aviation and maritime.

We are also working a lot on agriculture and co-operating in ICT.  We have finalised agreements on public administration, we this weekend finalised an agreement on irrigation.  Social development is almost final.  We are working on cultural co-operation.  With energy, we hope that we can conclude this agreement upon arrival of the Indians.  And an agreement on customs and tax matters is almost finalised.  These are some of the very concrete issues on which we will work.

We thought we should concentrate more on business-to-business co-operation in the preparations for the Summit.  As government, our role is to create an amiable atmosphere in which business can operate.  We have to work on this co-operation.  So we are thankful that we have almost 180 business people from India and Brazil with us for the next four days.  We thought they could sit with the Trade Ministers of India, Brazil and South Africa on Thursday.  As you know, the business people will sit with the Heads of State and Government at 11h00 on Wednesday 17 October 2007 and report to them and discuss with them the challenges as well as the opportunities present in each of the three countries.  That is one of the centre pieces of this dialogue.

We are also trying to identify those impediments from our side that if dealt with appropriately can fastrack economic co-operation.  We will also see in this seminar, more movement on the free trade arrangements.  They have been meeting over the past few weeks between the three countries.  They have really moved to now being able to table proposals.  The initial obstacles have been overcome in this round.  We see the three regions talking.  It was talking between South Africa and India, South Africa and Brazil, India and Mercosaur.  We will now be able to see the triangle closing and when the triangle closes we will see movement towards greater sub-regional arrangements in terms of Mercosaur, SACU and India proposals.

All in all, we are expecting approximately 300 visitors from India and Brazil to South Africa.  We will move on the morning of the 17 th October to the Presidential Guesthouse

Thank you

Questions and answers

Question Ambassador what would be the issues that would be discussed on the bilateral level between India and South Africa?

Answer On the afternoon of Wednesday 17 October 2007 President Mbeki and Prime Minister Singh will have bilateral discussions on conclusion of the IBSA Summit.

As you know, in November 2007 we will have the India-South Africa Joint Bilateral Commission co-chaired by the Foreign Ministers of India and South Africa.

As you know, the Heads of State and Government have been discussing how to strengthen the dialogue between India and South Africa.  First of all, we have set ourselves a target on trade that we believe we can move towards, US$3-4 billion two way trade.

Secondly, to encourage investments in both India and South Africa.  I think we are doing very well.  We are seeing Indian and South African companies moving into each others countries. 

think the Heads of State and Government will continue discussions began at the G-8 Summit on issues of UN reform, nuclear non-proliferation and nuclear energy.  I think these will be the key issues discussed between South Africa and India.

Question Ambassador, can we expect an agreement between India and South Africa to streamline the visa regime to fastrack this trade and investment movement into South Africa?

Answer Indeed, we have moved since the Brasilia Summit.  For example the Indians also complaining about transit visas.  This has now been abolished, for South Africa or indeed any other SADC country.

Secondly, they also complained about the duration of work permits for South Africa.  We have now increased this from 2 to 4 years.

Thirdly, a complaint was raised about the turn around time for the issuance of visas in both Mumbai and New Delhi.  We are now increasing capacities to deal with the visa regime.  We are working closely with various Indian Commerce of Industries.  There are also about 4500 Indians seeking political asylum.  Some have applied to South Africa for business reasons and eventually apply for political asylum.  So we clearly have to, both India and South Africa, to ensure that bona fide businesses are not inconvenienced.  At the same time, we have an interest to ensure that people do not misuse the opportunity to get visas quickly to come and overstay in South Africa.

Question Ambassador, there have been some concerns that developing countries, including India and Brazil (inaudible)

Answer Fortunately, I have been involved in the Doha Trade negotiations for many years.  In our participation, I have always seen that both India and Brazil are as enthusiastic as South Africa to conclude these negotiations.  The three countries are the leading countries in the G-20.  In Hong Kong in December 2005 we formed this NAMA.  We did this because it was very important to ensure the Round is concluded as quickly as possible.  In the centre of the Round is the issue of development.  Developed countries who are slightly advantaged should not overlook and undermine the need for the development round.  And then the question was when there is movement on subsidies including external support for subsidies then you have to go to the NAMA co-efficient formula to see what variables need to be put into place to ensure the developed countries especially the United States and EU should reduce subsidies substantially especially on export.  Then developing countries must show flexibility and open up.  It is a really delicate balancing act.  There is a feeling in the EU and US that they have moved and are now waiting for Brazil, India, Mexico and South Africa to move.  The G-20 says you have not moved substantially in terms of NAMA issues and therefore more movement is required.  We understand there is some rethinking in the EU to put more proposals on the table to accommodate the issues around external support for agricultural subsidies.  I know that Brazil, India and South Africa have also moved to show flexibility in terms of industrial market access.  So I think we are all looking for additional movement from the US and EU and I think that will trigger movement from the major developing countries in terms of industrial and other processes.  The major issue is going to be around services.  I think there is going to be some flexibility.  We do not expect the least developing countries like Lesotho, Botswana, etc to follow suit if India, Brazil and South Africa make some concessions.  We don’t expect the US and EU to demand the same response from the weaker countries.  This is where the challenge lies with developing countries: who will open and who will not?  We believe we should protect the most vulnerable from the pressure of opening up their markets from the EU and US.

Question Ambassador, are there any plans to develop co-operation in nuclear energy since India and South Africa have advanced capabilities in this regard?

Answer As I was saying earlier on, there is a discussion taking place on the broader field of energy from fossil fuels to other sources.  There is a discussion that is looking at every area including nuclear energy for civilian use, wind energy, biofuels, solar energy there is a whole basket of issues at which the three countries are looking.

You know we have this ambitious target in South Africa that by 2025 we will have 20-40% of our energy from nuclear sources.  This is very ambitious.  I see the same ambitions from India and Brazil so there are growing possibilities we can explore wind and solar energy, biofuels.  We can also begin to move into these areas.

You will see a commitment in the declaration where you will read, the three countries wholly promotes the utilization of nuclear energy for peaceful purposes.  That is what you will read in the Declaration that will be adopted by the Heads of State and Government on Wednesday 17 October 2007.  there will then be the possibility of us increasingly working together to advance in this area.  We also say, we do so bearing in mind the position and regulatory framework of the IAEA.  We will not exceed these regulations.  We will remain open so that there will be no suspicions as we embark upon this road.  This is a common understanding I hope we will reach during this Summit.  There is an affinity towards biofuels and there is nothing stopping us from looking at nuclear energy for peaceful purposes.

Issued by Department of Foreign Affairs
Private Bag X152
Pretoria
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14 October 2007