Speech by Minister of International Relations and Cooperation, Mme- Maite Nkoana-Mashabane, on the Occasion of the opening of the “doing business with India” Conference, Sandton, Thursday, 23 July 2009
H.E. Mr RK Bhatia, High Commissioner of the Republic of India to South Africa;
Mr Hari Bhartia, Vice President, Confederation of India Industries
Deputy Governors of the Reserve Banks of both India and South Africa;
CEOs and other high level representatives from the respective Indian and South African Business Communities;
The sponsors of this Business Conference;
Excellencies from the Diplomatic Corps;
Senior Officials from Government;
Ladies and Gentlemen;
It always gives me great pleasure to participate in any occasion that involves India because, as you may be aware, I served there for five and a half years of my diplomatic career as High Commissioner. The warmth and hospitality accorded to me by the Government and people of India made my stay a memorable one. I am, therefore, at home in this Conference that is aimed at strengthening business ties between Indians and South Africans. This gathering here today should, indeed, build on the success of the recently concluded Indian Premier League Cricket Tournament (IPL 2) which was a concrete demonstration of what our peoples can achieve in their work to strengthen the bond of friendship between our two countries.
I am hopeful, with the great minds that are here today at this Conference, that you will emerge out of this event with measures that will help our two countries build new partnerships and pursue joint business interests that will cover a wide spectrum of business sectors that are represented here today. Your effort will in no doubt enhance the efforts of our two countries to navigate the current global economic and financial crisis.
Fortunately, our friendship and good relations have a long history and are grounded in the many things we share in common. Many of our compatriots are of Indian origin. India itself has among its citizens people of African descent. We know, both of us, the experience of living under colonial rule, fighting the system, defeating it, and eradicating its legacy.
We should recall here the words of our icon Rolihlahla Nelson Mandela – whose 91st birthday we have just celebrated – when he addressed a luncheon hosted by Prime Minister Narasimha Rao during his first visit of January 1995 to India as South Africa’s first democratically elected president:
For those who did not know history it might seem strange indeed that there should only now be a meeting of the heads of the governments of two countries held so closely by bonds of sentiment, common values and shared experience, by affinity of cultures and traditions, and by geography.
But history decreed that our peoples should be kept apart by the very same tyranny which divided South Africa and oppressed the greater part of its people. Now that we are free at last, and with your help, there is much that our governments must urgently attend to so that relations between our peoples can flourish as they always should have done. The way is now open for our countries to enter without constraint and to the full extent of their potential into mutually beneficial co-operation
Since that visit relations between our two countries have more than flourished as Nelson Mandela had anticipated. Your Conference is the continuation of our commitment to ensure that the only divide between us is the Indian Ocean that nature has put between us without the intension of dividing our people.
Bilateral trade between South Africa and India has continued to grow since the establishment of diplomatic relations following South Africa’s democratisation, but there is still vast untapped potential and many opportunities exist for expanding this commercial relationship. Currently, India is South Africa’s largest trading partner in the South Asian region and indeed one of its top ten trading partners globally. Total bilateral trade volumes between South Africa and India amounted to a significant R37.4 billion in 2008 and continue to grow over an ever-increasing range of business sectors.
The South African private sector, however, needs to work much harder towards further exploring and exploiting export opportunities and increasing market penetration for South African products into the Indian market, to properly take advantage of India’s massive market of 1,1 billion people and its impressive ongoing economic growth. This reality about India as a trading partner should never be underestimated. During the 2008/9 financial year - for the 1st time in history - the Indian economy crossed the US$ 1 trillion GDP threshold. The purchasing power of the Indian middle class of over 300 million citizens and an ambitious US$ 500 billion infrastructure development programme, to be rolled out in the near future, are making India an attractive option for global exporters and investors alike who want to expand their business horizons. Although real GDP growth is forecast to slow to 5 per cent in 2009/10, from an estimated more than 7% per cent in 2008/09, the Indian market - as an engine for global economic growth - remains incredibly attractive.
I am pleased to say that India’s investments in South Africa have recently grown remarkably in quantity, size as well as diversity through companies such as Tata, Mahindra, Aegis, Ranbaxy, CIPLA, ICICI and the State Bank of India within industries such as ferro-steel production, information and communication technology, vehicle industry, call centres, banking, pharmaceuticals, tourism and hospitality, to name but a few. In this regard, please allow me to refer to the following two recent examples of Indian investments in South Africa that deserves particular mentioning:
The Indian Group Tata is adding a chain of luxury five-star hotels to its multibillion rand investment in South Africa, of which the new R 500 million, 176 room Taj Palace Hotel in the St George’s Mall in Cape Town is due to open in early December this year. According to reports, the Taj aims to have a large footprint in South Africa and this move is in readiness for the expected exponential growth in South Africa’s tourism industry as the potential biggest employer after the 2010 Soccer World Cup. The next hotel to be built will be at the Melrose Arch in Johannesburg and the company is already looking for a site in Durban. In addition, the Taj intends to start its own hotel school soon and will take about 30 apprentices per year. South Africa welcomes such an opportunity to build local capacity and to transfer skills and expertise to young South Africans.
The second example is that of the Mumbai-based company Aegis that has bought out the privately owned South African call centre operator CNN as part of Aegis’s grand plan to create a target of 5,000 new jobs and invest R500 million in South Africa over the next three years. CNN has operated for seven years in South Africa but struggled to win foreign contracts as some large international firms are too risk averse. However, an Indian company has now demonstrated that it is confident enough about this investment in South Africa and Aegis intends, as its local business grows, to possibly open further centres in Durban, Cape Town and Port Elizabeth. Aegis also plans to manage calls on customer acquisition, service and retention, product inquiries, account billing, technical support and debt collecting.
Ladies and Gentlemen
South African companies with investment interests in India include inter alia SAB Miller (majority interest in Mysore Breweries), Tiger Brands, the Airports Company SA (ACSA) & Bidvest (upgrading Mumbai Airport), Murray & Roberts, Sasol (coal-to fuel projects), First Rand Bank, Standard Bank, Old Mutual, Anglo-American, Balela Leisure and Nandos Group Holdings. By comparison, in spite of investments by these South African companies in India, our corporate sector is yet to take full advantage of opportunities that the Indian economy presents. It is hoped that this Conference will help dispel some of the myths associated with doing business in India, as well as to highlight the potential for the further expansion of commercial ties between our two countries.
Both our countries have recently concluded general elections and our respective Governments should, therefore, share the joint desire to promote new priorities of our elected administrations, particularly in the area of enhancing foreign trade relations for economic development and creating a better life for our peoples.
This Conference is an indication that our corporate sector is committed to making sure that agreements we sign as Governments realise in full in their intended objectives.
Ladies and Gentlemen
We have taken a view in South Africa that we are not an island situated somewhere at the tip of Africa – that we are part of this great mother continent. As such, I am hopeful that your initiative will enhance the cooperation between Africa and India and give momentum to our resolve to implement the Africa-India Framework for Cooperation that emerged out of the Africa-India Forum Summit of 2008.
Our two countries have not escaped the impact of the current global crisis which, as you know, is about food that many of our people need to feed their families; the climate change threatening the future of our planet; energy resources that are not as abundant as we once thought; and the collapse of the global financial system that impacts on our wallets, our shelter, the cars we drive, and the food that must be put on the table.
For this reason, our Governments realise the importance of South-South cooperation and of combining our collective strengths within multilateral fora such as the G8 +5, the G20 and the India-Brazil-South Africa Dialogue Forum (IBSA), to demand equitable participation by emerging economies in global decision-making processes, particularly in terms of mitigating the negative effects that this financial crisis has on the lives of so many of our people who were not directly responsible for its creation.
It is our view that South-South cooperation will contribute to the speedy recovery of the world economy. Fortunately, both South Africa and India have strong, well-regulated financial and banking sectors and were therefore, to a large extent, spared the worst of the sub-prime hangover. Yet, we have been hit hard by the indirect impact of this global recession on our economies and numerous financial and other measures had to be taken to minimize the fall-out as we struggle to adapt to the dramatic changes in the global business environment.
It counts in our favour, however, that there is a shared history between South Africa and India and a great convergence of views on international issues of importance that guide us in our joint effort to advance the global Agenda of the South.
Ladies and Gentlemen
South Africa and India are looking forward not only to a very productive, interactive and fruitful business Conference here in Sandton today, but also to a State Visit by President Jacob Zuma to India next year to further cement our excellent bilateral relations. This visit will be followed by a Joint Ministerial Commission (JMC) during which government-to-government interactions over a broad spectrum of issues will take place with a view to further deepen and expand bilateral relations.
In addition, the year 2010 is the year of the Commonwealth Games in India and the FIFA Soccer World Cup in South Africa. It is also the commemoration of the 150th year since the arrival of the first Indians in South Africa, which should be an excellent opportunity to celebrate. I believe that South African Indian cultural, religious and political leaders have already formed a steering committee to start planning for the event that should, once again, reaffirm the strong historic bonds of friendship and shared history between our two nations.
In our commemoration of the 150th year since the arrival of the first people of Indian origin in South Africa we will also pay tribute to many compatriots of Indian origin who fought in the struggle against white minority rule in this country. One such Indian is Dr Yusuf Dadoo whose centenary we will be celebrating in September this year. Dr Dadoo was the embodiment of what Mahatma Gandhi had in mind when he challenged a group of South African Indian students in February 1939, when he said:
"I am hoping that some day from among the youths born in South Africa a person will rise who will stand up for the rights of his countrymen domiciled there, and make the vindication of those rights his life`s mission”.
This mission that Ghandi spoke about to the students and the dream that Mandela had about the relations between our two countries, continue to inspire us to this day. I am confident, Programme Director, those participants at this Conference will also draw their inspiration from the words and dreams of our two great leaders. I therefore wish you all a very successful Conference whose outcomes should help strengthen business relations between our two countries and put us on course on our path towards a better life for our peoples.
I thank you,