South African Minister of Trade and Industry Alec Erwin warned yesterday that the global economic downturn and uncertainty, with delays in investment decisions, falling consumer confidence in major markets, volatile oil prices, and increased costs of doing business due to tightened security are adverse factors that the country would have to contend with this year.

“It is critical that we consider the ramifications of these events, including the war in Iraq, for our own efforts to reconstruct and develop our economy,” Erwin said during the Department of Trade and Industry’s (DTI) budget vote in Parliament.

Erwin pointed out that of great concern was the potentially lasting damage that may have been done to multilateralism as a means of global governance and achieving common goals.

“Interdependence and multilateralism are cornerstones of global peace and prosperity. The undermining of international rules and norms is one of the most disconcerting aspects of recent events,” he added.

He said that the implications are manifest in several important areas, including the Doha development round of trade negotiations; the New Partnership for Africa’s Development (Nepad) and the market access negotiations between the Southern African Customs Union (Sacu) and the US.

“We are hopeful that Sacu’s negotiations with the US remain on track. Negotiations will commence in May and technical work has already been done to prepare us for what will be a tough, but ultimately beneficial, process,” he said.

Commenting on the war in Iraq, Erwin warned that another consequence of the conflict was that the attention of developed nations – and flows of development assistance and investment – may turn away from Africa and from Nepad.

He stated that Nepad was critical to the successful economic development of the African continent, and its successful implementation was based upon innovative partnerships between African nations and the rest of the world.

“While we must not allow world attention to be diverted from this enormous task, we must realise now more than ever that Africa’s future lies essentially in its own hands,” he explained.

Erwin noted that, at the Doha Ministerial of the World Trade Organisation (WTO) at the end of 2001, in the aftermath of the September 11 attacks on the US, multilateral trade talks were acknowledged as a primary mechanism for pursuing global equity and development.

“Unfortunately, the Doha development round is at an impasse. There have been no resolutions to a range of issues critical to developing countries, such as TRIPS and Public Health and many implementation issues,” he said.

“The refusal by the US to agree to a mechanism that would allow countries to legally import medicines for public health reasons under compulsory licences is posing severe constraints to developing countries that cannot afford the cost of expensive drugs.

“A further point of tension is that at the end of March there was no agreement on how to advance the negotiations on agriculture – perhaps the most crucial issue for developing countries and indeed for the success of the development round”.

Erwin slammed “rich and industrialised” nations for failing to demonstrate leadership and for putting the multilateral process in jeopardy. He said that the Doha development agenda needs to be put back on track and the major powers bear a disproportionate responsibility to do so.

“Concluding the Doha Round negotiations is crucial to supporting continued growth in the world economy and without this there will be no development for the majority of the world’s people. This is a profound problem that should be the real focus of humanity’s attention at present,” he stated.

“South Africa will not shirk its leadership responsibilities and will argue these points vehemently at the forthcoming WTO Ministerial to be held later this year in Mexico”.

However, Erwin said the global uncertainties were not cause for South Africa to change its course, but should continue on the path towards growth, employment and equity.

He said the DTI’s strategy is set out in its medium-term strategy framework (MTEF).

“Our priorities for the MTEF period fall into several categories: new policies and legislation to give greater direction and certainty to enterprises and other economic actors, simple regulations to guide certain economic activities, more financial support to enterprises, more information about economic opportunities, and new partnerships to bring about greater outcomes than we achieve by working alone,” Erwin stated.

He revealed that, during this year, the DTI is to formulate and publish policies and strategies on consumer protection generally and consumer credit in particular, on the development of cooperatives, and would update its small-enterprise development plan.

“In addition, the implementation of the DTI’s Integrated Manufacturing Strategy will be elaborated and customised development strategies for priority sectors will be formulated. We will shortly start work on the simplification of South Africa’s tariff regime. The new International Trade Administration Commission, to be officially launched in June, will administer this important process,” he said.