Speech delivered by the Deputy President, Mrs Phumzile Mlambo-Ngcuka, on the occasion of the Official Visit to Indonesia addressing Members of the Indonesian Council on World Affairs (ICWA)

Your Excellency, Vice President Muhammad Jusuf Kalla,
Ministers and Deputy Ministers from both governments,
Your Excellencies,
Members of the diplomatic community,
Senior officials from both governments,
Business community representatives,
Distinguished guests,
Ladies and gentlemen;

On behalf of the government, the people and the President of the Republic of South Africa allow me to convey my special thanks to Vice President Muhammad Jusuf Kalla for the kind invitation to pay an official visit to Indonesia.

As South Africans we are deeply honoured to be in the presence of our Indonesian friends and we believe our visit to your country will be most productive at the level of strengthening our ties at both a political and economic level.

Our visit here was further strengthened during his Excellency, Muhammad Jusuf Kalla to South Africa. Our people still remember that visit. Our visit was elevated above an ordinary bi-national by our head of State; it is now a strategic partnership.

This confirms the convergence of views between our countries regarding issues of global, political and economic importance. We agree on the need for a fair and equitable distribution of the benefits of globalisation and on the importance of making an impact on the lives of millions of people internationally who continue to live in conditions of deprivation and poverty.

We have to work even harder to make this strategic partnership a reality and concretise plans for economic corporations to increase trade and investment for both our countries. The proposed flagship project could see Indonesians and other Asian countries ready to taking connectivity with Africa to greater heights.

We are looking forward to the Indonesian trade delegation that will visit South Africa in May led by the Minister of Trade and Industry.

South Africa also offers great opportunities for collaboration in Research and Development (R&D) many universities are global leaders in many fields such as anthropology, technology, mining, science and mineral beneficiation. All this offer exciting opportunities for collaborations with our institutions of high learning and students while at the same time offering unique tourism experience.

We are glad that our Minister of Science and Technology Mosibudi Mangena made excellent contact during his visit here and we are quite confident that concrete plans on scientific and technology research will emerge.

On the economic front we seek greater co-operation with business at many levels.

(1) Small business in Indonesia is much advanced.

  • With South Africa hosting the 2010 Soccer World Cup this co-operation can materialise around joint ventures between small businesses or souvenir manufacturing in South Africa, among other areas.
  • As part of our Accelerated and Shared Growth Initiative for South Africa (AsgiSA), we would like to see a significant contribution to the Gross Domestic Product (GDP) from small, medium and micro enterprises (SMMEs), as part of sharing of the economy. We note that Indonesia derives 40 percent of their GDP from SMMEs this is an area of collaboration both government and business to business as there are lot of lessons for South Africa.

It is important to highlight that we welcome the participation of the Indonesian companies and that further discussions need to happen on a clear defined mechanism for co-operation including attending to Intellectual Property Rights matters together with FIFA and SAFA and AsgiSA imperatives of increasing job creation and manufacturing in South Africa.

(2) Our country has adopted a strategy for AsgiSA, which is aimed at accelerating the pace of economic growth to a minimum of six percent by 2014 and halving unemployment.

Our economy in the last 12 years has grown consistently at an average four percent of the GDP and at this point we are around 4.5 percent.

Some of the indicators for our economy has grown over the last decade are:

  • We have received credit rating from reputed international agencies like standard and poor and Moodley of a Triple B Plus (BBB+)
  • Our deficit as a percentage of the GDP has been reduced from eight percent in 1994 to 0.6, in 2006;
  • Our inflation rate has come down from 10 percent in 944 to 3.8 percent in 2006.
  • Foreign Direct Investments (FDIs) inflows are at their strongest at the moment, driven by strong business confidence e.g.

    (i) Absa - Barclays deal,
    (ii) Vodacom deal just to mention a few of the international companies who have invested in South Africa.

South Africa is globally recognised for its leading role in cutting edge technology and innovation especially in the areas of:

  • Gas to liquid fuel conversion and
  • Coal to oil conversion.

South African institutions like Mintek and Council of Scientific and Industrial Research (CSIR) are also leaders in mineral technology and scientific research respectively.

Because of the fiscal discipline that we have applied since 1994 South Africa has experienced strong economic growth; we feel we are poised to provide universal access to basic services that were around 30 percent in 1994. Now over 60 percent of our population have clean water, 70 percent have access to electricity and the government has provided over 10 million poor people with homes.

The growth in the economy cannot be managed with our current infrastructure so in AsgiSA we need massive investment in infrastructure to deal with backlog and future demand.

Our investment aims to unlock private sector investment by creating efficient logistics for goods, service and people.

Investment is going to the following areas:

  • R370 billion over the next three to five years will be spent in infrastructure development in companies like:
  • Eskom national power/electricity supplier is allocated R93 billion,
  • Transnet responsible for developing our ports and rails is allocated R40 billion,
  • South African Airways national airline will spend R8,5 billion to develop its infrastructure,
  • Water infrastructure will be allocated R5,2 billion,
  • Also the Airports Company South Africa (ACSA) will receive an allocation and the rest will go towards Social infrastructure.

Key sectors that will be given attention include tourism, Business Process Outsourcing (BPO), bio fuels, mineral beneficiation, agriculture and agro-business, forestry, paper and pulp, textiles and clothing and the creative industries as well as second economy interventions aimed at ensuring that our economy is inclusive and benefits all.

In trade if we look carefully at all angles we can see opportunities. We acknowledge that the single greatest impediment to South Africa's shared economic growth and development as well as private investment programmes is our shortage of skills at all levels such as engineers, scientists and financial-personnel, project managers, information technology (IT) specialists and skilled technical employees such as artisans and information technology technicians and local government technicians and other managers that are critically needed as the economy moves into high gear and for service delivery.

One of the fundamental pillars of Joint Initiative for Priority Skills Acquisitions (JIPSA) is the contribution of the Department of Foreign Affairs and embassies in sourcing and attracting scares skills for international community to assist government to train in foreign academic institutions and for international placements where South Africa can train people through placements in foreign private companies and government as well as government related institutions.

Ladies and gentlemen,

In conclusion I would like once again to sincerely thank Vice President Muhammad Jusuf Kalla and the Indonesia people for the kind invitation bestowed on my delegation and I. May the special friendship between our countries and the goodwill between our people continue to thrive as we work towards achieving our shared vision of creating a better world for all.

I thank you!

Issued by: The Presidency
24 April 2006


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2003 Department of Foreign Affairs, Republic of South Africa