Issued by: Office of the President
19 May 1998
BILATERAL RELATIONS
South Africa and Switzerland established diplomatic relations in 1952. South Africa has an Embassy in Berne and a permanent Mission to the United Nations as well as a Consulate General in Geneva. Ambassador, Ruth Mompati, was accredited in October 1996.
Bilateral relations are excellent and have intensified in the last few years following the establishments of a democaratic Government in South Africa which created a solid foundation for a further cooperation. A series of high level meetings have highlighted the desire of both countries to deepen relations. The Swiss Minister of Foreign Affairs at the time and current President of Switzerland. Mr Flavio Cotti, visited South Africa in October 1994. President Nelson Mandela together with both Vice-Presidents - Mr Mbeki and Mr De Klerk - were received by members of the Swiss Confederation. The Swiss President for 1996, Mr Delamuraz, visited South Africa to take part in the official opening of UNCTAD IX followed by highest level meetings with the South African Government. The presence of important South African delegations at the World Economic Forum in Davos and the Forum of Crans-Montana were recent occasions to renew and broaden bilateral contracts. President Mandela visited Switzerland officially on 3 September 1997 and held discussions with Swiss President Koller as well as the Vice-President and Foreign Minister Cotti. The new Swiss development programme in South Africa is a concrete testimony of the readiness of Switzerland to contribute to the reconstruction and development process.
ECONOMIC RELATIONS
Bilateral economic relations are sound and will certainly benefit in the future from the conclusion of the Uruguay Round of GATT/WTO as well as from the signing in 1995 of a bilateral investment protection agreement. A double taxation agreement was concluded as early as 1968. The Swiss Government has also decided to include South Africa with effect from 1 March 1997, in the list of the beneficiary countries of the Swiss preference scheme by granting preferential treatment in the form of exemption from import duties in most cases and by a wide range of products covered (most industrial and many agricultural goods).
South Africa is by far Switzerland's most important trading partner on the African Continent and had an overall trade volume of CHF 953 million in 1997. The Swiss trade statistics, which exclude gold ingots, show a decreasing commercial surplus in favour of Switzerland. Inn 1997, the value of Swiss goods imported into South Africa reached a level of CHF 558 million against CHF 395 million of South African exports to Switzerland. South African statistics provide a different picture, as these include gold as a traded commodity. On this basis, Switzerland becomes the fifth main market (1996) for South Africa.
In the field of investment, Switzerland is an important partner for South Africa. According to the latest data available, Switzerland ranked fifth among foreign investors in 1994, after Great Britain. United States, Germany and Netherlands. By the end of that year, the cumulative value of Swiss direct investments in South Africa was estimated to be slightly under 3.5 billion Rand. No exact figures are available about direct investments pledged since 1994. Based on a recent study of the Industrial Development Corporation it is estimated that about 1 billion Rand of new investments have been undertaken by Swiss firms after the 1994 elections and Switzerland ranks sixth for foreign direct investment flows in South Africa.
About 300 to 400 Swiss companies are represented in South Africa. Most of Switzerland's major firms and multinationals have subsidiaries or branches in the country. These include Nestle, the big two of the Swiss chemical and pharmaceutical industry - Novartis Group (recent merger of Ciba-Geigy and Sandoz) and Roche - as well as ABB, Buhler, Schindler and Sulzer in the engineering sector. In the service sector, the three biggest banks - Credit Suisse First Boston, Union Bank of Switzerland - are represented, as well as Danzas, Kuoni, SGS, Winterthur and Swiss-Reinsurance. In all, Swiss owned companies employ 25 000 people in South Africa. The number of tourists has risen considerably in recent years.
DEVELOPMENT COOPERATION
In 1996, Switzerland established a cooperation programme to contribute to the promotion of human rights and democratisation in South Africa. This support was channelled exclusively through NGOs. To express its support to the crucial transition process under way in South Africa, The Swiss Government decided in 1994 to substantially increase its development cooperation assistance in the next few years. This commitment was formalised with the signing of a Memorandum of Understanding in October 1994. An amount of CHF 60 million (approximately R200 million) has been earmarked for development activities in the fields of education/human resource development as well as land reform and land use. A further CHF 20 million is available for activities in the field of democratisation and conflict resolution. While a part of the aid was provided to the Government for projects developed in the context of the RDP (Reconstruction and Development Programme), South African NGO's remain important partners and beneficiaries Swiss development assistance.
Bilateral co-operation with the South African Government was initiated in 1994 with a support of CHF 4 million to the upgrading of the Ibhayi Township of Port Elizabeth, a Presidential Lead Project of the RDP. An additional agreement covering CHF 4 million has been signed in 1997 to continue support for the urban upgrading in Port Elizabeth. In the field of education a grant of CHF 2 million to the Tertiary Education Fund (TEFSA) for University Student loans was made available. A second grant is planned. The consultation and publication of the draft of the new Constitution was supported with CHF 1 million. Switzerland made a substantial contribution to the Truth and Reconciliation Commission (TRC). In addition, financial assistance is given to pilot-activities in the field of tenure reform and the decentralisation of land reform facilitation services of the Department of Land Affairs (CHF 3.3 million).
Further funding of Government programmes is directed through International Organisations: ILO/Department of Labour for the Commission for Conciliation, Mediation and Arbitration (CCMA), UNDP for provincial management capacity building. South African NGO's in various fields, such as human rights, democratisation, education and land reform received broad support and funding.
Apart from the assistance programme managed by the Swiss federal Department of Foreign Affairs, the Swiss Government is providing financial support to the private sector in South Africa through a programme of the Swiss Federal Department of Economy. The objective is to support the development of private enterprises, in particular owned by entrepreneurs from historically disadvantaged groups. Local financial institutions are the main partners for the implementation of this programme, for which a total amount of approximately CHF 12 million (about R40 million) will be provided over the next few years. Additional areas of cooperation which flow from discussions between the President 1997 have been identified which include: building; capacity building with regard to preventative diplomacy and conflict mediation.