Address by His Excellency President Jacob Zuma at the World Trade Centre Business Club, Sao Paulo, 8 October 2009
Business Representatives from South Africa and Brazil,
Ladies and Gentlemen,
Thank you for this opportunity to say a few words on the occasion of this South Africa Brazil Roundtable Business Forum. We have brought with us from South Africa a delegation representing 45 companies interested in expanding both trade and investment relations in Brazil. The areas of interest include sectors such as energy, information technology, mining, finance, infrastructure and pharmaceuticals. Since the dawn of the democratic dispensation in 1994, South Africa has achieved a level of macroeconomic stability not seen in the country for 40 years. This can be attributed to a host of factors, including policies seeking to promote domestic competitiveness, growth and employment, and increasing the outward orientation of the economy. It is also a consequence of capable economic management, a sound regulatory environment, and responsible use of public resources. After many decades of isolation, South Africa was rapidly absorbed into the Global Economy. This brought new opportunities for trade, investment, technological development and skills transfers. It also posed a number of challenges. After years of having been shielded from external competition, South African products and services now had to hold their own in the global marketplace. Over a decade later, we can say with confidence that the South African industry has responded well to these challenges, and has made good use of the opportunities. This has created the space for South African business to look for new prospects further afield. For decades, South Africa‘s main trading partners have been the countries of the North. As with the rest of Africa and much of the developing world “South Africa has primarily been an exporter of raw materials to Europe and North America. That has now started to change. Africa is beginning to explore the potential for trade and investment among countries of the South. More than ever before, the nations of the developed and developing world are considering how best to work in concert as Africa's partners. In addition to the ties being forged through gatherings like the Africa-South America Summit which was recently held in Venezuela Africa is finding new partners among the emerging economic powerhouses of the South. Countries on the continent have established trade and investment cooperation framework arrangements with countries from Asia and South America. This is not surprising as Africa has a tremendous future, and offers tremendous opportunities for investors across the globe. South Africa continues to vigorously promote intra-African Trade and Investment. This is why South Africa is now among the biggest investors in sub-Saharan Africa, in sectors such as Mining, Electrical power, Financial Services and Telecommunications. The amounts invested by South African companies in other African countries totalled an annual average of 1.4 billion US dollars since 1991. In a similar vein, Brazil is the driving economic force for the South American continent. This makes the relationship between our two countries important not only for the advancement of our own national interests, but also for the broader development of the regions in which we find ourselves. This relationship can only further stimulate dynamic engagement between South America and Africa. South Africa and Brazil should undertake more collaborative projects. We should use our respective positions as entry points into each other’s continents. We have an historic opportunity. We must seize it. Ladies and Gentlemen,
There are now some signs of a recovery in the global economy, making the case for stronger South-South trade and cooperation even more compelling. But more than that, the global economic crisis has underlined the need for a fundamental reconfiguration of the Global Economy. The crisis has exposed the economic practices of the developed world to be unsustainable. In their response to the crisis, they have departed dramatically from the policies they had long prescribed to the developing world. Faced with the collapse of their economies, they suddenly became inward looking, using public funds to bail out failing industries and reviving protectionist tendencies. It is clear that they can no longer claim to have a monopoly on economic wisdom. Developing countries are not to blame for this crisis, yet they are suffering the greatest impact. It is in their interests that international trade increases. They are most in need of access to credit and continued investment. This crisis has sharply raised questions about how the Global Economy should be structured. It calls for a new global economic order, one in which the countries of the South assert their collective interests. Developed countries should no longer able to dictate the terms of Global Economic Activity. The development of South-South economic relations should be at the core of this realignment of economic forces. Groupings like IBSA, which brings together India, Brazil and South Africa, should serve as an anchor for building these relations. The most dynamic emerging economies of Brazil, Russia, India and China are leading a structural shift in the Global Economy in which developing countries are enjoying a rapidly growing share of world trade. We are convinced that through purposeful engagement we can negotiate new types of mutually beneficial developmental agreements with key countries of the South. In 2008, bilateral trade between South Africa and Brazil reached 2.52 billion US dollars, which is an increase of 10% over the previous year. South African exports to Brazil have been growing at a steady rate for the past six years. In 2008 there was a remarkable increase of 48% in the value of South African exports to Brazil. This amounted to a 25% reduction in the trade deficit, bringing it to less than one billion US dollars. But there is still room for improvement. There is clearly great potential for South African products to find markets in Brazil. In this regard the envisaged launch of the Brazil - South Africa Business Forum will further strengthen trade and investment ties between the two countries.
Ladies and Gentleman,
This Government, which began its term of office in May this year, has identified five core priorities for the next five years. These include:
creating decent work; ensuring all children have access to education of a high standard; ensuring all South Africans have access to affordable, quality health care; developing our rural areas, ensuring food security and accelerating land reform; and, combating crime and corruption.
As we undertake this work, there is much South Africa can learn from the experiences of Brazil. Brazil has in many ways faced and overcome similar challenges. We are particularly keen to see Brazilian and South African companies exploring the many opportunities that arise out of Government’s commitment on these areas. We have observed in Brazil the role that economic activity has played in the pursuit of developmental goals. The country is a pioneer, for example, in the development of a home-grown pharmaceutical industry. This has had a profound impact on the country’s efforts to improve the health of its people. We urge South African companies to learn from such examples, and to seek partnerships with Brazilian companies to exploit the many opportunities that now arise. As an open economy South Africa welcomes new investment and collaborative partnerships in key areas of trade and investment. There are many areas in which South Africa is uniquely poised to deliver real competitive advantage. Our Department of Trade and Industry, which is represented here, and our provincial investment agencies, all look forward to facilitating mutually rewarding business relationships. This is part of our effort to enhance growth and enable our economy to meet its full potential. I would therefore like to extend a warm invitation to you to become part of a country that is Alive with Possibility! We believe that working together we can do more to meet both the national challenges of our two countries and our common global challenges. In this context, our business component must play a key role.
I thank you.