Speech by President Thabo Mbeki at the South Africa-Denmark Business Meeting, 7 June 2000

Honourable Prime Minister,
Distinguished participants,
Dear friends:

I would like to take this opportunity once more to thank the Prime Minister for inviting me to visit Denmark, thus providing us with the opportunity once again to discuss the further strengthening of the relations between our peoples and countries. Since our liberation from apartheid rule in 1994, we have benefited from the exchange of high-level political, business and other visits between our two countries. These have included successful visits to our country by Her Majesty the Queen as well as the Prime Minister and President Nelson Mandela to your country.

We were also pleased that the Europe/South Africa Investment Conference was held in Copenhagen last October and look forward to the visit to our country later this month of a high profile Danish business delegation that will accompany the Minister of Development Cooperation, Mr Jan Trojborg.

We can, of course, say much more about the full scope of the relations between our countries which, in addition to the political and economic, extend to other areas. These include the promotion of gender equality, support for our Truth and Reconciliation Commission, and other matters such as the environment, culture and sport and generous development co-operation.

And yet more can be said about the close co-operation between us on multilateral questions, including our continuing negotiations with the European Union, the work we did jointly to promote the adoption of the Treaty Banning Anti- Personnel Landmines and the urgent global challenge of peace, stability and development in Africa.

As South Africans we are very pleased indeed to note that the relations between our governments, countries and peoples can truly be described as excellent.

I am particularly pleased that, as we agreed soon after South Africa’s liberation in 1994, these relations have and are developing on a people-to- people basis and not merely as government-to-government relations.

I must also make the point that we consider it very appropriate that our first meeting with the Nordic Heads of Government will take place in Denmark, which, as we have tried to indicate, has contributed greatly to h!elp us construct South Africa’s post-apartheid international relations.

A major challenge this new South Africa continues to face is to achieve higher rates of economic growth and development, to reduce the level of unemployment and to eliminate poverty.

To address these challenges, we have engaged in a very extensive process of the restructuring of our economy, decisively to break away from the status quo imposed on it by successive apartheid regimes.

Accordingly, among other things, we have:

worked to remove the barriers isolating us from the global economy through such measures as the reduction of tariffs and the progressive removal of foreign exchange controls;
removed agricultural subsidies for commercial agriculture;
encouraged the modernisation of the economy especially by promoting the growth of manufacturing and exports from this sector as opposed to the exports of primary products;
sharply reduced the budget deficit and consistently pursued the objective of maintaining fiscal discipline;
worked to improve the economic and social infrastructure such as telecommunications;
continued with the work to restructure the state corporations, which includes partial or complete privatisation; and,
built a stable, consistent and transparent legislative, policy and regulatory framework which enables all economic actors, both domestic and foreign, to take their decisions in an atmosphere of certainty.
Some of the positive results of this continuing process of economic reform are reflected in the fact that, among other things:

the economy is expected to grow at more than 3 per cent this year;
the rate of inflation is at its lowest levels in many years;
foreign exchange reserves are at their highest level in two decades;
the balance of payments is in a healthy state; and,
our economy withstood the Asian economic crisis of 1998 very well, demonstrating the resilience it has developed as a consequence of the structural reforms we have been carrying out.
We must also make the point that we have also paid close attention to the challenge we continue to face to improve the quality of life of the millions of poor people in our country, who are mainly black, who suffered greatly from oppression and exploitation by the system of white minority rule.

Accordingly, we have ensured that social spending was not negatively affected by the process of economic restructuring, elements of which we have mentioned.

Consequently, over the last six years, we have, among other things:

engaged in a massive housing programme targeted at benefiting the poor in our society;
provided clean water and modern sanitation for millions of our people;
expanded the health infrastructure to ensure primary health care for those who were denied the exercise of the right to health;
worked to open up educational and training opportunities for all our people, both young and old;
brought electricity and modern telecommunications to millions of our people;
expanded the welfare and social security system to bring in the majority excluded by the apartheid system;
sought to transform the labour market to remove the rigidities created by apartheid and to create a situation of equity, equal opportunity, an end to super-exploitation and the complete abolition of all discrimination based on race, gender and disability; and,
striven to address the critical challenge of job creation by implementing a community based public works programme and promoting the development of small, medium and micro enterprises.
You are familiar with the fact that after protracted negotiations, a bilateral Trade and Development Agreement was reached between ourselves and the European Union. This will have a very beneficial effect on our economy as it will facilitate the entry of both agricultural and industrial products in the EU markets.

Our 14-member state SADC will also conclude its own negotiations soon to approve a Trade Agreement which will lead to the establishment of a free trade area with a population of 150 million people.

We have also begun negotiations with Brazil to conclude a bilateral trade agreement between our two countries. This will be an important stepping stone towards initiating other trade negotiations between SADC and Mercosur.

Similar negotiations will also begin soon between ourselves and Nigeria. Already, the rest of Africa constitutes an important trade and investment partner for us, a development that will further be enhanced by the agreement between Nigeria and South Africa.

Discussions are also pending with China and India.

We are also working to ensure that South Africa acts as a hub, the meeting point of trade and other flows in three directions. These would be from South Africa north into Sub-Saharan Africa; from South Africa east into Asia; and from South Africa west into Latin America.

The recently approved United States Africa Growth Act has also increased the possibility for us further to access the US market. Our Minister of Trade and Industry has already held discussions with the US Secretary for Commerce and various US importers to take advantage of these new opportunities.

The principal point I am trying to emphasise is that it clearly make very good sense for business to exploit the fact of the geographic location of South Africa to access various substantial markets, and not only the South African market.

Recognising this, for example, all three German automobile manufacturers are already producing motor vehicles in South Africa, destined for export markets as far afield as the US, the UK, Australia and China, to say nothing of the rest of Africa.

These processes are of course facilitated by the fact that South Africa also has a very well developed economic infrastructure encompassing such areas as transport, telecommunications and energy, a world class banking system as well as the stable and transparent overall policy framework we have already mentioned.

New measures have also been put in place to attend to the important matter of the development of the skills of our working people to ensure that they have the capacity to participate in the modern economy on a competitive basis.

Recently, we also reached an agreement with a number of the world’s leading information technology corporations. As a result of this, their most senior executives will work with us further to speed up our efforts to ensure that we do not fall behind the rest of the world as a result of being on the wrong side of the digital divide.

We have also discussed this matter with the Prime Minister and the Danish Government to draw on your experience in building an information society.

We are convinced that our country offers exciting economic opportunities and is gearing itself properly to participate in the irreversible process of globalisation.

I am also convinced that we should also focus on a matter that is important to us - the issue of the further strengthening of the trade relations between Denmark and South Africa and attracting further Danish investment into the South African economy. It is clear that both our governments and business people can do more to encourage larger trade flows between our two countries, among other things, taking into account the fact of the bilateral South Africa-EU trade agreement.

I would also like to take this opportunity to express our appreciation to AP Moller for its investment in the shipping company, Safmarine, as well as other Danish companies that have invested in such sectors as pharmaceuticals, information technology, machinery, medical equipment and construction.

I trust that the visit to South Africa later this month will provide an opportunity for Danish business people to look at other investment opportunities.

As a Government, we are more than ready to assist all interested Danish business people to establish themselves within the South African market as long term corporate citizens. The relations between our countries and peoples were immensely strengthened by the common struggle we waged to end the system of apartheid.

I am convinced that firm base of friendship and co-operation provides us with an important platform from which we must proceed to meet the challenge of building a mutually beneficial partnership and contributing to the evolution of a global community of nations in which all would enjoy democracy, peace and prosperity.

Thank you.

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