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Opening remarks by Minister JT Radebe

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 Galushka

Honorable South African Minister’s

Ambassadors, Representatives, Directors

Members of the Russian Business Delegation

Captains of Industry representing South African Business

Distinguished Guests, Ladies and Gentlemen                                     

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 potential.

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 partner.

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 industrialization policy.

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 industrialists. 

Distinguished guests

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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Issued by the Department of Planning, Monitoring and Evaluation (DPME)

15 November 2017


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