Gulf Region

Islands in the Straits of Hormuz area: Easing of tension between the Emirates and Iran through high-level visits

Any tension in the Straits of Hormuz region has a direct bearing on South Africa’s economic security since most of South Africa’s oil emanates from areas to the north of this obligatory passage to and from the Gulf. Iran and the UAE are still attempting to settle their dispute over the Abu Musa and Greater and Lesser Tunb islands situated inside the Straits and the Oman-controlled Musandam peninsula. The Arab League and the GCC support the claims of the UAE in this dispute. The dispute provoked increased regional tension in March and April 2001 when it became known that in addition to arming the three islands, Iran was in the process of colonising the islands with a transfer of Iranian citizens to them. In July 2001 three of the Emirati President‘s sons visited Iran to congratulate President Khatemi on his re-election victory. On 6 August 2001 one of President Khatemi’s closest aides, Mohammed Abtahi, the Head of the Presidential Office, visited the Emirates’ President Sheikh Zaid bin Sultan Al-Nahayan to convey a personal message of goodwill from the Iranian leader. These two visits were important from a regional security point of view since they brought about a marked improvement of relations between Iran and the UAE. The Iranian Foreign Ministry observed "We are witnessing cordial relations between the two countries". Discussions about the islands have yet to be held.

Iraq and Kuwait and the continuing Anglo-American air strikes on Iraqi territory

Contrary to the previous Arab Summit held in Amman which failed to settle ongoing tensions between Iraq and Kuwait, the last Arab League Summit held in Beirut in March 2002 showed a significant improvement in relations between the two rival neighbours. The Arab leaders welcomed the Iraqi leadership’s decision that it will no longer continue to threaten the existence of its neighbour, the State of Kuwait.

South Africa, as Chair of NAM, has an interest in King Abdullah II of Jordan’s arbitration efforts between Kuwait and Iraq. Apart from Saudi Arabia and Iran, South Africa also sources its crude oil supplies from Kuwait.

The situation remains tense as American and British fighters continue to carry out raids on targets inside Iraqi territory. A more serious consequence of these raids is the increased concern of Kuwait’s Arab neighbours about their own security. The British and American insistence that the raids will continue is beginning to generate signs of concern in Kuwait’s neighbour Saudi Arabia.

Iran faces the Challenge of Political Liberalisation: Widening Split between the Conservatives and Reformers

Thirteen years since the death of Ayatollah Ruhollah Khomeini, the founder of the Islamic Republic of Iran, the reformers (led by President Mohammad Khatami) and conservatives (led by Ayatollah Khamenei) are still struggling to interpret his legacy for their political gains. President Khatami believes that the "enemies of democracy" (the conservatives) are threats to the Islamic Republic and as such are in contradiction with the Imam’s (Khomeini) legacy. The conservative backlash to thwart President Khatami’s liberalisation of the state and society still continues and has recently significantly increased. The conservatives see Khatami’s reform as a means of "polluting" their religion (Islam) by introducing what they view as Western values and ideas. The judiciary and the institutional organs of state are at the forefront of the conservative opposition against changes in the Iranian society and have jailed several dissidents, newspaper editors and even MPs.


Problems for South African meat exporters to the Gulf: the beef ban

Between March and April 2001 the Governments of the Kingdom of Saudi Arabia, the United Arab Emirates, Qatar, Kuwait and Bahrain imposed a ban on the importation of meat and dairy products from Africa, including South Africa, in view of fears of Foot and Mouth disease.

As a continuation of the ban on Africa will negatively affect livestock exporters, the South African Government has actively lobbied the Governments of these Gulf countries to rescind their import bans. This has been motivated by the European Commission’s re-acceptance on 14 February 2002 that meat imports from South Africa, except from those localised areas still under restriction, were acceptable.

On 21 May 2002, the Ministry of Agriculture and Fisheries of the United Arab Emirates (UAE) issued a Ministerial Decree which lifted the import ban on South African livestock, meat and diary products. This means that the UAE will resume its import of cattle, sheep and goats from South Africa. The ban was lifted after confirmation was received from the International Epizootic Office in Paris that livestock in South Africa is disease free.

The lifting of this ban by the UAE would have major and positive implications for the meat and dairy industry in South Africa especially if the other countries in the Gulf would follow suit. Negotiations are proceeding between South Africa and the remaining Gulf Co-operation Council countries to have the ban lifted as soon as possible. Those include Saudi Arabia, Qatar, Kuwait and Bahrain. So far South Africa has lost R1 billion in revenue as a result of these import bans on South African red meat products.

Kingdom of Bahrain

The State of Bahrain was converted into a Kingdom in early 2002.

Since succeeding his father in March 1999, the present ruler of Bahrain, King Hamed Bin Issa Al-Khalifa has embarked on a program of liberalisation, which culminated in the referendum of February 2001. In that referendum, 98% of the electorate voted for a new Charter which promises a freely elected parliament for the first time in 25 years. The immediate changes include the abolition of oppressive security laws, which were principally passed to quell opposition activity among the island’s Shiite majority. In May 2002, Bahrain held Municipal elections. These elections were significant because for the first time in the history of Bahrain, women were also allowed to vote. Parliamentary elections are envisaged to be held in autumn 2002.

Bahrain also achieved diplomatic and juridical success in March 2001 when the International Court of Justice in the Hague awarded it the gas-rich Huwar archipelago and Qi’tat Jaradah island, ownership of which had hitherto been contested by Qatar.

Although South Africa established its first resident embassy in the Gulf in Manama in 1993, it presently has no permanent resident representation on the island. Bilateral trade is limited. A Consular Agent in Manama promotes South Africa’s interests. South Africa, however, hopes to attract Bahraini investments in sustainable development projects.

Islamic Republic of Iran

The 6th South African-Iranian Joint Commission took place from 3 to 6 February 2002 in Tehran under the joint chairmanship of the Iranian Minister of Foreign Affairs, Minister Kamal Kharazzi and the South African Minister of Foreign Affairs, Minister Nkosazana Dlamini Zuma. The South African Minister of Foreign Affairs was accompanied by the Minister of Health and a South African delegation consisting of the Departments of Trade and Industry, Arts, Culture Science and Technology, Environmental Affairs and Tourism and Minerals and Energy.

South African private sector companies representing the petrochemical industry, railway engineering sector and the mining sector also attended. The activities of the Joint Commission were conducted in two working groups, the first dealing with political and social matters and the other with economic issues.

The Joint commission concluded with the signing of two documents, the first a Memorandum of Understanding in the field of Health signed by Minister Tshabalala-Msimang and the second a Joint Communiqué signed by the two Foreign Ministers calling for closer co-operation between Iran and South Africa, the easing of trade restrictions between the two countries, establishment of reciprocal trade promotion centres and a diversification of the current trade situation.

Visit by the Executive Mayor of Tshwane

The Mayor of Tshwane, His Worship Father Smangaliso Mkhatswa visited Iran from 15 to 17 March 2002. The Mayor was leading a delegation of 5 members that included members of the Mayoral Committee business development.

The South African delegation was hosted by the newly elected Mayor of Tehran, Dr Malek-Madani and over the course of three days investigated various fields of possible co-operation between the two municipalities. The members of the Mayoral Committee also held fruitful discussions with the Iranian Chamber of Commerce, Industry and Mines. The Mayor of Tshwane extended an invitation to the Mayor of Tehran to visit South Africa as soon as his programme permits.

The visit was concluded by the signing of a MOU that will see Tshwane and Tehran become Sister Cities during the visit of Mayor Malek-Madani to South Africa.

State of Kuwait

Kuwait has long enjoyed political stability due mainly to the long-standing political legitimacy of the ruling Al-Sabah royal family. This situation survived even the devastating Iraqi invasion of 2 August 1990 and its occupation by Iraqi forces up to February 1991. It is thanks to this structural stability and its financial power that Kuwait, despite its relatively small surface area, has considerable influence both in the region and in multilateral forums such as the GCC, the OIC and the Arab League. Kuwait has established a noble reputation for its generosity in matters related to aid assistance and humanitarian relief, not least vis-à-vis Sub-Equatorial Africa.

South Africa and Kuwait maintain good relations, as evidenced by the fact that in July 2000 the two countries entered into a Bilateral Consultations Agreement which obliges both Governments to meet at least once annually to discuss a number of topics of mutual interest.

The balance of trade between South Africa and Kuwait has remained in the latter’s favour, principally due to the fact that Kuwait has joined Iran and Saudi Arabia as a major supplier of South Africa’s liquid energy needs.

Kuwait has shown a serious commitment to assist South Africa in the further development of its infrastructure. The Kuwait Fund for Arab Economic Development ( KFAED ) has offered South Africa a "soft" loan of upward of R240 million for the provision of basic social services to the less developed areas of the country. This is an issue that requires finalisation.

To encourage trade and investments between the two countries, the Governments of South Africa and Kuwait are negotiating an Avoidance of Double Taxation Agreement. This process was been given an additional boost when the two countries initialled a Reciprocal Promotion of Investments Agreement in October 2001. A South African Department of Trade and Industry delegation visited Kuwait from 3-5 May 2002 to commence negotiations on the conclusion of a Bilateral Trade Agreement.

Former President Nelson Mandela visited Oman, Bahrain and Kuwait from 13-16 April 2002 at the invitation of the three Heads of State. Sheikh Jaber Al-Mubarak Al–Hamad Al-Sabah, the Deputy Prime Minister and Minister of Defence of the State of Kuwait is due to visit South Africa from 14-20 July 2002. It is envisaged that the Memorandum of Understanding on Defence Co-operation between the Republic of South Africa and the State of Kuwait will be signed during his visit.

Sultanate of Oman

For the past two decades Oman has enjoyed political stability and prosperity under the leadership of Sultan Qaboos. Oman enjoys a positive profile multilaterally, presently holding the Chair of the Indian Ocean Rim/Association for Regional Co-operation (IOR/ARC). Oman has consistently adopted a strategic approach to its foreign policy and together with Qatar it assisted the process of rapprochement between the two regional super-powers, Saudi Arabia and Iran.

South Africa and Oman enjoy good but limited interaction in their relations due to the fact that although Oman has a resident Commercial Office in South Africa the latter has no equivalent representation in the Sultanate. Bilateral trade between the two countries is limited and valued at a total of only some R30 million in 2000. Both countries hope to alter this situation through trade promotion ventures including a visit to South Africa of the Omani Chamber of Commerce and Industry. An Honorary Consul, Mr Said Amran Ameir Al-Harthy, promotes South Africa’s interests in Oman.

Republic of Yemen

South Africa and Yemen enjoy good relations and in 2000 these were strengthened further by the finalisation of a Civil Aviation Co-operation Agreement.

Yemen has a resident Embassy in South Africa but South Africa has no equivalent representation in Yemen. Bilateral trade has still to take off- in 2000 its total value was some R70 million. In December 1999, South Africa appointed an Honorary Consul, Mr Hassan al Zubieri, with a view to the further development of trade relations.

Kingdom of Saudi Arabia

Saudi Arabia is a monarchy, which has been ruled by the Al-Saud Royal Family since it was founded by King Abelaziz Al-Saud.

During a visit to the Kingdom in 1997, former President Mandela stated that the South African Government considered the Kingdom of Saudi Arabia as a strategic partner. This policy position has been re-iterated by President Thabo Mbeki and forms the basis of South African/Saudi relations. During his 2000 "State of the Nation" address President Mbeki re-iterated that he considered the Kingdom of Saudi Arabia to be a partner in his vision of the African Renaissance and as a member of the " G-8" of the South".

Bilateral economic and technological relations look promising. Apart from the growth in bilateral trade, which increased from R 251 million in 1994 to R 15,95 billion in 2001, there has been extensive growth in technological exchanges. South Africa was instrumental in assisting Saudi Arabia to counter an outbreak of Rift Valley Fever by providing the Kingdom with experts and vaccines to neutralise the disease.

A Saudi-owned company is a partner in the Cell-C mobile phone service provider in South Africa. Recently, Saudi Arabia’s Ministry of Education has embarked on a process of restructuring the Kingdom’s education system and it has requested the South African Ministry of Education to furnish it with information regarding South Africa’s education system of all grades. South Africa and Saudi Arabia are also in the process of finalising a number of outstanding agreements. These agreements will regulate the promotion and protection of investments, avoidance of double taxation, military co-operation, and co-operation in the scientific and technological fields. Negotiations between South Africa and Saudi Arabia are still continuing regarding the lifting of import ban on South African livestock, meat and dairy products.

United Arab Emirates

The United Arab Emirates, which consists of a federation of seven emirates, has since its establishment in 1971, experienced political stability and economic growth under the presidency of His Highness Sheikh Zayed bin Sultan Al Nahyan.

The South African Government regards the United Arab Emirates as a significant partner of South Africa in the Middle East, which could play an important role in the realisation of the projects of the New Partnership for Africa’s Development (NEPAD) for sustainable development, poverty relief, democratisation and good governance in Africa.

The UAE has over the last six years consistently featured in South Africa’s top five regional trading partners and is host to 30 South African private sector companies. Bilateral trade on 2001 totalled R 2.09 billion.

State of Qatar

The State of Qatar became fully independent on 1 September 1971. Qatar is one of the most influential countries in the Gulf Region because of its abundance of natural gas and crude oil resources. Since Amir Sheikh Hamad bin Khalifa Al-Thani came to power in 1995, Qatar has generally followed an increasingly independent foreign policy which enabled it to play a role in the détente between Iran and the Gulf States. In March 1999, elections for the Municipal Council of Doha were held which were the first elections to be held in Qatar. Women were permitted to vote and to contest the elections although no female candidates gained a seat on the Council.

A South African Company, Sasol Synfuels, has entered into a US$ 800 million commitment with Qatar Petroleum for the construction of a gas-to-liquids plant at Ras Laffan Industrial City in Qatar. It is envisaged that Qatar Petroleum will own 51% of the project and Sasol 49%. Sasol hopes that this 34 000-bpd plant, which is expected to be operational in 2005, will be the first of a series of such projects in the Gulf. The Qatari Government has indicated that that this project will allow Qatar Petroleum to participate in the developing markets for environment-friendly fuels. The importance of Sasol’s investment was underscored during the State Visit of His Highness Sheikh Hamad bin Khalifa Al-Thani, the Amir of Qatar, to South Africa from 14-16 May 2002.

The importance of the developing trade and economic relations between South Africa and Qatar was underscored during the State Visit of His Highness Sheikh Hamad bin Khalifa Al-Thani when an agreement on economic, commercial and technical co-operation and an agreement on the reciprocal promotion and protection of investments were signed. The two governments also signed a Memorandum of Understanding (MOU) on Diplomatic Co-operation.

The Governments of South Africa and of Qatar have agreed to open resident Embassies in Pretoria and in Doha as soon as possible Currently, South Africa’s Ambassador to Abu Dhabi is accredited to Qatar and the Qatari Ambassador to Cairo is accredited to South Africa on non-resident basis. The opening of Embassies will strengthen the two countries’ diplomatic and economic relations. Bilateral trade in 2001 totalled R 265 million.

In November 2000, Qatar assumed the chair of the Organisation of Islamic Conference (OIC) for three years. Thus while South Africa is the chair of the Non-Aligned Movement (NAM), Qatar will be an important interlocutor on the Middle East Peace Process and on international security concerns about countries in the Middle East. Qatar’s assuming of the chair of the Gulf Co-operation Council (GCC) in November 2002, could facilitate co-operation between the GCC and the Southern African Development Community (SADC). Qatar is also expected to play a significant role in the implementation of the sustainable development and poverty alleviation projects of the New Partnership for Africa’s Development (NEPAD).

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