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Date
: 25/09/2003
Source: The Presidency
Title: J Zuma: Madrid Chamber of Commerce and Industry, Spain
ADDRESS BY DEPUTY PRESIDENT JACOB ZUMA TO THE MADRID CHAMBER OF
COMMERCE AND INDUSTRY, Madrid, Spain, 25 September 2003
The President of the Madrid Chamber of Commerce and Industry
Members of the Business Community
Distinguished Guests
I am honoured and grateful to be meeting with you today, given the
warm relations between our two countries.
This interaction with the business community today indicates the
potential that exists to further deepen the economic relations
between our two countries.
We are meeting during an exciting period in our country, as we are
preparing to celebrate the 10th Year Anniversary of our
Democracy.
When we look back to the dark period of apartheid oppression and
isolation that we have gone through, we feel proud but yet humbled
by the progress we have made over the last ten years.
The legacy of apartheid left various socio-economic imbalances, as
well as deep and painful memories. In 1994, when the people of
South Africa ushered in a democratic dispensation, they decided to
put the past behind them.
We began to work for reconciliation and to start building a better
and prosperous life for all South Africans.
We believe we have done incredibly well so far. At a political
level we have consolidated democracy and achieved political
stability. In addition, we have made great strides with regards to
meeting basic needs and improving the quality of life of all our
people.
For example, millions of black South Africans who did not have
homes, water, electricity and other basic needs, now have access to
these, in only nine years of the new democratic order.
We are certainly aware that we still have a long way to go before
we can say we have achieved all our objectives. But we have made a
good beginning.
We are speaking to you today because we believe the international
business community can play a key role in helping us to achieve
economic growth through foreign direct investments.
As we move towards the end of the first decade of freedom, we
proudly carry the message to the world that South Africa is alive
with opportunity.
We say this with the belief that we offer a perfect investment
climate for the international business community for many reasons
and allow me to share some of these with you briefly.
The South African economy has since 1994 been through a process of
structural transformation.
The country implemented macro-economic policies that sought to make
the economy more outward orientated to participate in the global
economy. We also sought to promote domestic competitiveness, growth
and employment.
In our monetary policy we have adopted inflation targeting and
agreed on an inflation band of 3% to 6%. Inflation targeting allows
for a positive real interest rate, which is to be used as a policy
instrument to control domestic inflation.
Furthermore the exchange rate is allowed to fluctuate at
competitive levels with minimal intervention from the Reserve Bank.
The government is committed to an open capital market, with no
exchange control restrictions on foreign investment and the gradual
relaxation of exchange controls on residents.
A number of trade agreements we have concluded with key regions
since 1994 also make our country attractive as an investment
destination.
These include the following:
* The signing of a free trade agreement with the European
Union
* A protocol amongst the fourteen countries of the Southern African
Development conference, which includes the establishment of a Free
Trade Area by 2008
* World Trade Organisation membership
* Preferential market access to countries such as Japan,
Switzerland, Russia, Norway and Canada through the Generalised
System of Preferences
* Increased preferential market access to the United States a
result of the African Growth and Opportunity Act.
We are also developing bilateral trade relations with markets in
Africa, Latin America and Asia. These offer vast export
opportunities to South Africa because of their rapid growth. We are
currently in the early stages of trade talks with countries in
these regions, such as Brazil and India, with a view to negotiating
bilateral free trade agreements.
Domestically, we have also had to undertake specific strategies to
address some key performance areas for equity and growth. These
include Black Economic Empowerment, which seeks to correct past
imbalances in the ownership of the economy.
Historically, the economy was designed to be owned and controlled
by White South Africans only.
The Black Economic Empowerment policy is aimed at bringing about
significant increases in the numbers of black people that manage,
own and control the country's economy. It also seeks to decrease
income inequalities.
We believe that the implementation of an official Black Economic
Empowerment strategy provides clarity and certainty with regard to
government's future actions.
Our strategy will ensure that more people are brought into the
economic mainstream, thereby spreading and increasing the size of
the economy. Black empowerment offers many opportunities for
investors who wish to go into partnership with emerging
businesses.
Ladies and gentlemen, our country's development cannot be divorced
from that of the African continent. We are therefore actively
involved in the programmes for the regeneration of the African
continent, especially the News Partnership for Africa's Development
(NEPAD), one of the programmes of the African Union.
The NEPAD programme is designed to make the dream of an improved
quality of life a reality for Africans. It is not only a vision on
paper, but offers concrete development projects, for example in
transportation, telecommunications, water and energy.
While our continent faces numerous challenges, it must be
acknowledged that African leaders have set the continent on a
sustainable development path.
There is a promotion of democratisation and respect for good
economic and political governance, and prioritisation of the ending
of conflicts and wars. South Africa is actively involved in
resolving conflicts in the Democratic Republic of Congo, Burundi
and other countries. You would also have noticed the urgency with
which African leaders move to address political instability and
violence, for example in Liberia, Cote d'Ivoire and other
countries.
Ladies and gentlemen, we continue to seek productive business
partnerships with the developed world. At the Cancun WTO
Ministerial Meeting, which ended a week ago, South Africa as a
member of the G20 played a leading role.
While we were disappointed that no decision could be reached, we do
believe that major progress was made in bringing to the notice of
the North that the developing world will no longer be bullied into
agreeing to rules that are to its disadvantage.
Given the challenges we still face on the economic front, South
Africa is pleased to have strong development partners within the
European Union, such as the Kingdom of Spain.
Our two countries signed an Agreement on the Promotion and
Reciprocal Protection of Investments, which came into force in
1999.
In terms of this, I invite and encourage all the businesses
represented by the Madrid Chamber of Commerce and Industry to
invest in South Africa to gain from the significant competitive
advantages we offer, both in our country and the region.
Let me reiterate that in the first decade of our freedom, we have
indeed managed to beat the odds. Despite the legacy of apartheid
distortions, we have created a new nation, full of vibrancy and
alive with opportunity. We have created the right political, social
and economic climate to make us a favourable investment
destination.
We are also actively involved in continental programmes for the
revival of Africa, which will make the entire region ripe with
opportunities for our development partners.
Our Embassy in Madrid, our Department of Trade and Industry, and
other departments in South Africa stand ready to provide you
assistance with your investment plans.
We look forward to welcoming you to our beautiful country.
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