Opening remarks by Minister JT
Minister In the Presidency Planning
Monitoring and Evaluation at the South Africa Russia business roundtable
Sheraton Hotel, Pretoria
14 November 2017
Your Excellency, Mr Yuri Trutnev,
Deputy Prime Minister of the Russian Federation
Honourable Minister Alexander
Honorable South African
Members of the Russian Business
Captains of Industry representing
South African Business
Distinguished Guests, Ladies and
Good afternoon, and welcome to this landmark Roundtable
Discussion between South Africa and Russia.
Earlier this year, the Republic of South Africa and the
Russian Federation marked the 25th anniversary of the establishment of formal
diplomatic relations between our two countries. I was struck by the fact that
bilateral relations between our two countries were established as far back as
28 February 1992.
Of course, it is necessary and important for us to
congratulate ourselves on this landmark achievement. But, we must also pause
and ask ourselves some tough questions: have we succeeded in translating our
very meaningful diplomatic relationship into lucrative trade, investment and
economic opportunities for our businesses and our people, generally speaking?
If not, why not?
South Africa and Russia share various common values. It is
for this reason also appropriate that we should note the fact that our amicable
diplomatic relationship recently coincided with the conclusion of a 90-day
mutual Visa Waiver Agreement for ordinary passport holders. This agreement was
meant to give greater impetus and leverage to increased business-to-business as
well as people-to-people contact. It envisaged as an outcome increased and
exponentially better prospects for two-way economic trade and growth between
our countries. I am pleased, that indeed, this has been good news for South
Africans visiting Russia.
So, let me dare to ask again-what is holding us back? It is
my sense that, at this stage, despite
a long history of good relations between South Africa and Russia, our mutually
rewarding yields are at significantly lower levels than anticipated. In
terms of our current trade patterns, total
trade between South Africa and Russia increased from ZAR5b (Five Billion rand
in 2012 to almost ZAR8b (Eight billion rand) in 2016. Major South African
exports include fruits and nuts, manganese ores, beverages, spirits and
vinegar, wine, electrical machinery and equipment.
I am of course eminently aware that to date, our two
countries have signed over 40 bilateral agreements in various areas of
cooperation, including in Science and Technology, Defence, Mining and Mineral
Resources, Energy, Agriculture and Justice.
Again, some of the tough questions we must ask is that we
honestly and frankly reflect on progress with deepening and accelerating our
bilateral trade relations. For this must translate into greater trade
opportunities, higher investment and faster economic growth. And this will
require the development of meaningful public-private partnerships. We must
serve to energise practical co-operation to boost our development. We simply
have to find better vistas of opportunities in the pursuit of the task of
growing and strengthening the relations between both our countries as well as
our industries, businesses and citizens.
Let me reiterate that
South Africa and Russia have an excellent relationship dating back many years.
It dates to a time when the former USSR supported our people in the virtuous
cause of fighting for the liberation of South Africa. This support was based
and pivoted on a historic mission: Russia agreed to host many of our cadres,
allowed them to study and also agreed to train combatants during the dark days
of the liberation struggle. The hospitality of the Russians left an indelible
and impressive mark on our collective minds. It is therefore no accident nor
aberration that many of us, South Africans, continue to have the highest regard
for present day Russia.
We must now seek to
convert this bilateral cooperation and friendship to focus on the pulling of
key economic levers in areas such as, for example, technology, construction,
mining and mineral exploration, energy, infrastructure, skills development,
agriculture, railways, R&D as well as trade and economic cooperation.
In this regard, indeed,
the establishment of the South Africa – Russia Business Council further
reinforces the efforts to strengthen economic and trade relations between the
two countries. Mr Ndaba Ntsele has joined us and I look forward to hear some of
his thoughts on how we progress and accelerate our efforts.
Distinguished guests, you too, as business are important
players and partners in our quest for building stronger and more sustainable
economies and a better life for our peoples within the BRICS family. I need not
to remind you - we meet against the backdrop of developmental challenges
resulting from the downturn in the global economic order. Our discussions must
thus be informed by those challenges too.
The difficulties we face in South Africa, for example, can
in part be directly attributed to our status as commodity exporters. We are
thus affected by the decline in the demand for our raw materials and negative
resultant price decreases. Hence, our own domestic growth patterns have
displayed growth that unfortunately does not accurately reflect our true growth
In terms of our lodestar, the National Development Plan
(NDP), Vision 2030, we remain fully committed to and focussed on addressing the
structural challenges that have affected the performance of the domestic
economy and its ability to respond to our developmental challenges. We are
focussed too on creating a growth enhancing economic environment, create jobs,
reduce inequality and catalyse transformation. We underscore the fact that this
is about developing partnerships between government and business. We come to
this Business Round Table with 3 primary goals:
- We wish to unlock
development and inclusive economic growth;
- We wish to promote
value-added trade amongst yourselves and South Africa; and
- We want to promote
investment into our productive economic sectors.
It is my view that focusing on these goals would enable us
to facilitate greater trade, investment and industrialization which is a key
part of addressing common challenges facing us including unemployment,
inequality and poverty.
We have made much progress with the formulation of key
blueprints including the BRICS Strategy for Economic Partnership and the
subsequent Roadmap, which clearly articulate practical areas of cooperation
across all disciplines. In this regard, Russia has been a reliable ally and
I therefore wish to encourage our Captains of Industry, big
and small, some of whom are in the audience today, to take ownership of
ensuring that you build the necessary relations, partnerships and ties - as you
are intended to be the ultimate beneficiaries of the strategic partnership
between our respective countries.
I have to draw your attention to an important recent
development - the recent launch of the Africa Regional Centre (ARC) of the New
Development Bank in South Africa. The launch of the ARC further demonstrates
the commitment towards providing access to capital for infrastructure projects
in Africa and other developing countries. Let me re-iterate South Africa’s view
that the New Development Bank must be more welcoming to emerging and developing
markets and to Africa in particular, and assist us in taking forward our
developmental agenda. We look forward to seeing progress in the funding of infrastructure
investment in energy, transport, water and other productive sectors which
currently impedes our competitiveness in the broader global landscape.
That, admittedly, leaves room for greater harvesting of
opportunities. In as much as South Africa is endowed with natural resources, it
is critical that we have in place beneficiation programmes that support our
We also wish to remind our friends, and we count Russia
amongst them, that given the history of institutionalized racism in South
Africa, we continue to work hard to reverse the impact on the economy. South
Africa has thus set for itself a plan of action towards the attainment of
radical socio-economic transformation. This means that all business
partnerships will be expected to include more than before, participants from
the black majority, who had been excluded in the ownership, management and
control of the economy during the apartheid era. South Africa offers
opportunities currently in many areas as we seek to reignite economic growth.
There must be an increased focus on industrialization, mining and
beneficiation, agriculture and agro-processing, energy, small, medium as well
as micro enterprises (SMMEs), attracting investments, growing the oceans
economy and tourism. This must be linked to our programme of developing black
Let me also reiterate that Africa remains a continent of
great opportunity with lots of potential. Africa’s household consumption and
business spending are both growing strongly, offering companies a $5.6 trillion
opportunity by 2025, according to the latest McKinsey Report. Thus, if Africa’s
manufacturers were to produce more to meet domestic demand from consumers and
businesses, and work with governments to address factors hindering their
ability to produce and export goods we could change our collective destiny for
the better. Africa is thus the current frontier for growth and prosperity and
the opportunities from an investment perspective are limitless. And, as South
Africa, we straddle the gateway to the rest of the continent.
I would like to extend my best wishes for this South Africa
– Russia Business Round Table. I hope it is the first of many. You have our
government’s full support, as we explore ways to work together and to build
brighter futures for our people.
I thank you!
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Tshegofatso.Modubu@dpme.gov.za / 083 276 0786 or Mmabatho Ramompi on 076 4803513 or Mmabatho.Ramompi@dpme.gov.za
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Issued by the Department of Planning, Monitoring and Evaluation (DPME)
15 November 2017